Electric bike-makers queue up to set shop

If current trends are to be believed, the AC Neilson prediction that light electric vehicles (LEVs) have the potential to touch two lakh units by 2008 could well be an understatement.

The Automotive Research Association of India (ARAI) has confirmed that since the beginning of January this year, at least 12 companies have applied for certification to ply their electric two-wheelers on Indian roads. A majority of them plan to source parts from China and Taiwan.

Since the bikes are restricted to a maximum speed of 25 km per hour, they do not require any registration, a clause which is being lapped up by auto manufacturers who source vehicle parts from abroad and assemble the units in India.

"A large number of electric vehicle prototypes has been received for ARAI certification this year with two or three of them having the potential to acquire certification of more than a speed of 25 km or 250 watts," said Shrikant Marathe, director, ARAI.

Currently, there are around 20 electric two-wheeler manufacturers in various parts of the country, prominent among them being Gujarat-based Indus, which is a division of Electrotherm Industries, Maharashtra-based Ace Motors and the recently launched Hero Electric, which is a tie-up between the Hero group and Ultra Motors from the UK.

In spite of higher end prices, where a bicycle-like model costs around Rs 15,000 and goes up to Rs 35,000, electric vehicle makers are banking on the advantage of zero fuel consumption and negligent maintenance costs.

The most attractive proposition for electric two-wheeler manufacturers is the low capital requirements. Apart from one or two companies, who plan to manufacture the electric vehicles from the scratch at their plant, most promoters are required to make an investment of less than Rs 10 crore, which includes manufacturing facility and material import cost.

Interestingly, most of the electric two-wheeler sales have happened in rural markets. Early mover Indus with its Yo bikes sold around 12,000 units by the end of 2006 and is targeting sales of 60,000 units in 2007 on the strength of growing rural dealers.

On the basis of a study commissioned by the company and conducted by a research organisation, the demand for electric vehicles could touch 1 crore vehicles by the end of the year 2011, said Avinash Bhandari, director, Electrotherm.

Another emerging player in the electric two-wheeler segment, Ahmedabad-based Ashapura Trade and Transport, which launched its brand of electric two-wheelers recently under the brand name 'Power' bikes in collaboration with a Chinese company this year, is confident that electric vehicles will find favour with people of diverse income groups and backgrounds.

"In six months, we have managed to set up a dealership network of 30 in Gujarat and are venturing into newer markets in Rajasthan, Haryana and Madhya Pradesh on the back of growing demand especially from schoolgoing children and women and also from distance commuters in rural areas," said Deepak Mehta, marketing manager, Ashapura Trade and Transport.