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A low-to-mid speed scooter also uses a 1.3 kilowatt (KW) battery in comparison to a high-speed variant, with an average battery size of 2.5 KW. Using a smaller battery, say EV experts, also makes battery-swapping a more viable option, in addition to stationary charging. Munjal claims that smaller batteries can be easily carried and replaced by the customer if they run out of charge. Swapping batteries is especially useful in business-to-business (B2B) operations, like delivery and logistics, where shorter and predetermined point-to-point commutes make up a majority of trips.

A B2B use case, says Chattopadhyay, may give Hero new opportunities. If consumer sales don’t take off, Hero will have excess production capacity, which can become a supply base for shared mobility companies like Ola, which plan to introduce electric two-wheelers within their shared mobility options.

According to information sourced by The Ken, in 2019, Hero had been in talks with Bengaluru-based micro-mobility company Bounce to manufacture a line of electric scooters for their fleet. But discussions quickly went south, says a top official at Hero, when the OEM realised that their low-speed variants could undergo extensive damage because shared mobility vehicles struggle in Indian road conditions.

Mirroring China

Bounce’s fleet-based operations may not be the ideal fit for Hero’s scooters, but Munjal remains bullish. He’s seen this trend play out in major EV markets such as China and the US. In China, for instance, low-cost electric scooters single-handedly spurred the growth of the low-speed EV segment, alongside smaller, electric cars. These scooters flourished in areas like the Shandong province, which alone has more than 100 e-scooter manufacturers who produced a total of 2.19 million vehicles between 2009 and 2017. These low-speed variants are especially important in areas with poor public transport.

The low-speed scooters, which are only a shade sturdier than e-bikes, don’t require registration or license plates. One can literally ride them out of a showroom without so much as a helmet. But grafting that pattern onto the Indian EV industry is going to be a huge challenge, says Jitender Shah, who owns the Pune-based eponymous EV company Jitender.

“Indian cities don’t have demarcated lanes for traffic moving at different speeds, unlike China or the US. Low-speed scooters could clog up congested cities further,” says Shah. Urban India already has some of the slowest roads in the world. An analysis of 300 arterial roads in India shows that a 10 kilometre stretch in Kolkata, Bengal, takes 39 minutes to cover, almost double that of Singapore and London. Introducing more slow-speed vehicles on the road, argues Shah, will contribute to the gridlock.

In addition to congestion, low-speed electric scooters can also be highly unsafe, if their maximum speed of 25 km/hour is stretched. In fact, the Chinese government is now threatening the low-cost, low-speed commute segment with stricter regulations, which is likely to impact their sales.

Sound familiar?

Shah is keen to avoid jumping through the policy hoops. That’s why he has recently invested Rs 200 crore ($27.8 million) in upgrading his low-cost product line to a high-performance one. “FAME-II should ideally have a cascading subsidy, split between electric scooters of different speeds,” says Shah. It would give every type of EV player a fighting chance, he adds.

The government, having doubled down on higher speeds, is in no mood to relent.

Life in the fast lane
The government’s reluctance to include low-speed EVs within FAME-II, says Chattopadhyay, stems from their discontent with the traditional auto industry, who initially played hardball. That’s why newer OEMs, with a tech-led focus, replaced the incumbents at the lobbying table.

While this may have given companies like Ather a slight edge over its traditional rivals, D’Silva claims that it’s just a matter of practicality.

“Low-speed scooters, with a top speed of 25 km/hour, will sputter if they have to climb flyovers. Accelerating quickly and zipping across traffic signals is also going to be difficult,” says D’Silva. She argues that petrol two-wheelers have already set a higher bar.

“When you can get better performance and speed with a petrol scooter, at the same cost, who is going to make the switch?” says D’Silva. On average, the cheapest petrol scooter costs around Rs 42,000 ($584), comparable with Hero’s Optima Plus EV, which is priced at the lower end of the spectrum at Rs 36,073 ($502).

So why has demand for a similarly priced EV been anaemic? Chattopadhyay believes it’s because the government has shifted the burden of generating demand to OEMs. “Instead of investing in large scale charging infrastructure or manufacturing of EVs, the FAME-II policy indicates that growth will come from better speed and performance metrics on EVs,” says Chattopadhyay.

“We don’t have a product other than electric. So the price point is key. Niche markets will always remain. For some companies that makes more sense. We are targeting the mass market,”

NAVEEN MUNJAL, MANAGING DIRECTOR, HERO ELECTRIC

The approach, he adds, is lopsided, because it doesn’t really focus on the entry-level commute—the segment that Hero’s relying on to grow.