The impact for all electric two-wheelers, which
are imported mostly from China, is that it will lead to price escalation that
will be passed onto customers.

For Okinawa
Autotech, a fledgling maker of electric two-wheelers, that started making
products a couple of years ago, sales were humming along steadily with numbers
of 45,000 units a year and projections of reaching 100,000 in sales by this
year.
Suddenly, the
squeeze of components and parts from China started after the coronavirus
outbreak along with stricter norms enforced under FAME 2 by the Centre.
Now,
Jeetendra Sharma, the company’s managing director (MD), claims that other than
battery, everything is locally made and admits that those projections stand
corrected.
"We
expect to see sales of anywhere between 50,000 and 60,000 by March-end,” Sharma
says.
Okinawa,
which makes a range of more than half a dozen products that start as low as Rs
60,000, has production capacity at 90,000 units per annum at its new plant in
Alwar, Rajasthan.
It has been
among the more aggressive players in the electric two-wheeler space with
different variants across both low-speed and high-speed vehicles.
Sharma’s big
plan is to launch an electric motorcycle with a top speed of 120 km.
However, that
has also been postponed till Diwali as opposed to the June-July time-frame set
earlier.
Under the
government’s national mission on electrification of vehicles (FAME 2), the
industry has seen sales of 280,000 units that are dominated by two-wheelers and
three-wheelers but there is every indication that a contraction has begun and
will be there for a while.
Saket Mehra,
partner, Grant Thornton Advisory, says it’s time consuming to make ones own
electric vehicles from scratch.
He adds that
many small companies have, over the last eight years, tried to make a go of
such products but did not succeed.
He says, “In
the current market, the entire two-wheeler projections are being redone.
"The
impact for all electric two-wheelers, which are imported mostly from China, is
that it will lead to price escalation that will be passed onto customers.”
Sullaja Firodia
Motwani, a two-wheeler veteran and founder of Kinetic Green Energy & Power
Solutions, which makes green three-wheelers and small vehicles, says that speed
is an integral part of performance for any two-wheeler.
“When you
make bikes or scooters that are slower than 60 km per hour, it becomes a
challenge to go uphill, overtake on long roads, carry two people and so on,”
she says.
“In addition,
making bikes with bigger electric engines that perform well without vibrations
has not been easy in the past for indiginous players, although that is slowly
changing,” adds Motwani.
Any long-term
slowdown in two-wheeler sales will not bode well for the national plan to
electrify India's vehicles, which are vastly dominated by two and
three-wheelers, she says.
She goes on
to say that in five to 10 years, a large chunk of two-wheelers - with ICE
motors - will be replaced by EVs. China’s EV-related sales is less than 50 per
cent when usually during post the Chinese New year, it’s at its highest.
So, there
will be a possible 10 per cent to 12 per cent price hike for the electric
two-wheeler industry.
“Even a price
change of 5 per cent can make a big difference to sales because customers at
that segment are highly price sensitive,” says Mehra.
Ather Energy,
which makes electric scooters and runs a 300-man R&D centre out of
Bengaluru, has two scooters - the Ather 450 and the pricier Ather 450 X -
launched in January and will start production in July.
Most
two-wheeler makers rely on China and import knock-down units and powertrains,
says Tarun Mehta, Ather’s co-founder.
What are
Ather’s investors looking at, given the market changes?
“When
something like what is happening right now (coronavirus outbreak) happens, we
start to focus on products, customers and our existing technology.
"We
won’t introduce new products for at least two years,” he says.
He adds that
in the next five years, the company expects at least 25 per cent of the
scooters to go electric.
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