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Hindu Business Line: Revolution@25kmph

Halfway between the ubiquitous bicycle and pricier motorcycles, electric vehicles are slowly and steadily winning over the rural consumer with their affordability and fuss-free features.

Every morning, in Coimbatore’s Kurudampalayam village, more than 80 battery-operated vehicles go door to door collecting garbage. In this all-woman exercise, one woman drives the Ampere vehicle, while another picks up the waste, neatly segregated as bio-degradable and non-degradable. They make a second round of collection in the evening. The electric vehicles are charged on alternate nights, which costs ₹12 per machine and lasts for a run of up to 50km. No licences are required to operate them.

In Uttarakhand’s Haldwani, Anuradha Samant hops on to her Hero Electric bike every morning for her ride to Pantnagar, 25km away. A researcher at the GB Pant University, she also uses her bike to travel long distances within the campus and to agricultural fields as part of her study. Her electric bike has freed her from unreliable public transport. Nor does she have to worry about refuelling in an area where petrol pumps are scarce.

It is this sense of freedom and convenience that has captivated residents in not less than 30 villages in Uttar Pradesh’s Hardoi district. Farmers, grocers, laundrymen and even students are hiring electric bikes from OMC Power. The bikes, which the company charges overnight at its micro-grids, are proving a boon to small farmers for ferrying vegetables and spices to the market once a fortnight.

“I get three times the price for my produce in Lucknow than in Hardoi. Every 10 days I rent a bike, which has enough space to load my vegetables for sale in Lucknow,” says farmer Adheer Singh.

As big cities embrace the convenience of metro rails and radio cabs, villages and small towns struggling without reliable and cost-effective transport are finding an unexpected ally in electric vehicles (EVs) — both two-wheeled and three-wheeled.

Slow-and-steady attraction

An overnight charge keeps the vehicle running for 60-70 km. Used daily for a 50km ride on average, the battery lasts almost a year. Most important of all, you don’t need a driver’s licence for EVs as their maximum speed does not cross 55kmph.

Used to pedalling on dusty roads, the average user in these parts is usually satisfied with just 25kmph, say domain experts. Bhanumathi Mani, who sells tea to factories on the outskirts of Coimbatore, will readily agree. For close to 20 years her tea business remained unprofitable as she struggled to cover distances on her bicycle. Until 2008 when an Ampere electric bike changed the fortunes of her business, and life. So much so that she managed to send her sons to good colleges.

It is users like Mani and Singh that electric vehicle makers in India are targeting. “Rural is the most significant segment for us. The users there start with entry-level products and their needs are basic. They move within a small area and electric vehicles are a very useful product for them,” says Sohinder Gill, CEO of Hero Electric, the largest maker of electric two-wheelers in India.

For OMC Power’s founder and CEO, Anil Raj, the electric bike is an opportunity whose time has come. Every home in rural India has a bicycle, which costs around ₹3,000. A moped, on the other hand, is priced upwards of ₹25,000. An electric vehicle is halfway between, and is sure to find acceptance among rural customers, for whom cost is the final barrier, he says.

Freedom from petrol

The scarcity of petrol pumps in rural areas and rampant adulteration also work in favour of electric vehicles. “The petrol station on the highway near our village always sold adulterated fuel. It damaged the engine of my motorcycle, leading to frequent repairs,” says DP Gupta, a resident of Mainpuri tehsil in UP. He switched to an electric bike two years ago and is more than happy with the decision.

Electricity is subsidised in large parts of rural India. It costs ₹5.5 to recharge a low-speed (maximum 25kmph)scooter to run 70km. If Gupta used a petrol-driven vehicle instead, his cost would be ₹70 for the same ride.

Even though the battery needs to be replaced annually, at a cost of about ₹12,000, an electric vehicle results in a yearly saving of over ₹10,000.

Yet another advantage of EVs is the near-zero maintenance cost. Petrol engines have parts that rub against each other. If dust gets in, the engine fails — a near-constant hazard on dusty rural roads. “Electric bikes are like a ceiling fan. If it fails, it fails in the first five days, otherwise not in 20 years,” explains Gill.

Sputtering on policy

While EVs have been around in India for some years now, their market growth has not been consistent due to fluctuating government policies. In November 2010, the Ministry of New and Renewable Energy announced up to 20 per cent incentives on the sale of EVs. That meant the manufacturer would provide customers a discount of up to ₹4,000 for a low-speed electric two-wheeler and ₹5,000 for a high-speed vehicle. The manufacturer later claimed the amount from the government. This gave the industry a huge push and it grew by 200 per cent in FY2012.

However, the subsidy was subsequently withdrawn, leading to a sales slump, and many dealerships shut down.

Budget 2015 has given the sector a renewed push. The subsidy for a low-speed electric scooter is now ₹7,400, while for high-speed two-wheelers it is ₹9,500. However, the caveat that the scheme, in the first phase, will be applicable only in cities with a population exceeding 10 lakh has left rural users in the lurch. “The government should not put these constraints,” says Hemalatha Annamalai, CEO and founder of Ampere Vehicles.

In the meantime, the manufacturers are focusing on reducing costs and improving the life of the vehicle for end-users. Ampere is indigenising the production of key components and even hopes to locally manufacture the bike’s motor by the year-end, says Annamalai. The batteries are currently imported under a technology tie-up with a foreign player, but she hopes to make these in India as well over a period of time.

From its initial focus on Tamil Nadu, Karnataka and Kerala, Ampere will expand later this year to Andhra Pradesh, Telangana and Puducherry.

Gill says that apart from the government subsidy of ₹7,400, his company is giving an additional discount of ₹3,000 to price the entry-level product below ₹20,000. “After the budget announcement, there is renewed interest in electric two-wheelers,” he says, pointing out that 4,000 vehicles were sold in April alone.

Borrowed ride

OMC is betting on two models to target the price-conscious rural customer. The first involves offering its brand new electric bike on rent, while in the second it will retrofit an existing bicycle into an electric vehicle.

“I am excited about the retrofit market as every house has a cycle and a retrofit kit costs less than $100 (₹6,000). We import directly from manufacturers,” says Raj.

His company is seeing a good response to its electric-bike rentals, currently on a trial basis, at ₹150-200 depending on duration of use. “We are further fine-tuning the bikes. We expect to go commercial in September this year,” he says. OMC will begin by offering the rental service at 25 of its power plants.

The rural drive

The electric bike companies are trying to customise models to improve their utility in rural areas, which is their emerging market. Hero Electric’s Maxi is a hit with shopkeepers, milkmen, newspaper vendors, hawkers and farmers. With a wide platform between the rider’s legs, the model also has a swappable battery in a box with a handle. “It allows entrepreneurs to drive day and night, as they can buy another set of briefcase battery for replacement,” says Gill.

Ampere wants to be a one-stop-shop for rural commuting, businesses, delivery and garbage collection needs. Focusing on rural and semi-urban markets, the company is enjoying a significant market share for its electric scooters, electric cycles, load carriers and low-cost mobility products for textile workers.

With continued government support, the fledgling industry is confident of taking on the rough and dusty roads on its ride deep into the hinterland.


Written by Rashmi Pratap for Hindu Business Line

Read original article: “Revolution@25kmph

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