India is the world’s third-largest exporter of cycles, but what about electric cycles? The growth in cycle exports has been driven by a robust component ecosystem in the country. Aditya Oza, Co-Founder and CMO of EMotorad, discusses how India can establish dominance in the electric cycles sector.
Q. Is it true that India exports more electric cycles than it sells domestically?
A. Yes, that’s true. India’s electric cycle manufacturing units export on a larger scale than they sell domestically. Selling products internationally requires significant certifications for different regions, which can be costly. However, there is a discrepancy in market reports for India due to the lack of registration requirements for electric cycles, leading to underreported data.
Our main markets are the European subcontinent and India, with a presence in Australia, Japan, and the UAE.
Q. Discrepancy in market reports! Can you share some insights from your data?
In our first year, our revenue in the Indian market was around Rs eighty to hundred million, and this year we are on track to reach 35000 units sold domestically. While our export numbers are slightly higher, the Indian market has shown significant growth. However, market reports often underestimate the size of the industry; for example, a 2020 report stated a market size of 2 million USD, which is much lower than our actual sales figures.
Q. Why isn’t the electric cycles space picking up pace in India? Are you doing something about it?
A. We are already taking the necessary steps, but a crucial factor is market awareness. Major Indian companies like Tata and Reliance have entered this space and need to focus on educating the public about the use cases of electric cycles. India tends to follow Western trends with a delay, and in places like Japan, Amsterdam, and the USA, electric cycles have become a significant mode of transportation.
We need to shift the perception of cycles in India. Previously, there was a status symbol attached to larger vehicles, but electric cycles are changing that narrative. To truly bring this to the masses, we need more companies to invest in raising awareness and promoting the benefits of electric cycles. The early signs of adoption are there, but a collective effort is required to accelerate this growth.
Q. Do you see any challenges in the component ecosystem, particularly with batteries, chips, and other electronics required for electric cycles?
A. Yes, the component ecosystem, especially for electronics, poses a challenge. India has a strong mechanical component supply chain, thanks to our long history of bicycle manufacturing. However, the electronics side is a different story. Most research and development in India have focused on larger electronics, like those for electric scooters, leaving a gap in the market for electric cycle components.
To address this, we have had to develop our own drive train technology in-house, as relying on third-party suppliers wasn’t feasible. This has been our most time-consuming challenge, but it’s also allowed us to innovate beyond just electric cycles.
Regarding battery cells, like other EV companies in India, we’re waiting for domestic production to ramp up. Currently, a ‘Made in India’ battery typically means assembling imported cells. We are hopeful that steps taken by renowned companies will soon lead to a more robust supply chain for battery cells.
Q. Do batteries for electric bikes differ from those for electric scooters and motorcycles, aside from size?
A. There are several key differences. Firstly, batteries for electric motorcycles may require coolants due to increased heat generation, which is not the case for electric bike batteries. Secondly, electric bike batteries are designed to be more easily chargeable, like a mobile phone, while electric scooter batteries are often too heavy for this convenience. Some models use two-part batteries to address this issue, with one part chargeable in a parking area and the other removable for charging at home. Additionally, the core technology remains the same, but the chemistry and output requirements differ. Electric bike batteries may assist with pedaling, while also powering other components like displays, which requires a different output compared to scooter and motorcycle batteries.
Q. Are there any specific components where you see potential for development in India?
A. While we would prefer less competition in the components we manufacture, I see significant opportunities in batteries and mechanical components. International demand for batteries from companies like LG, Samsung, and Panasonic is high, and currently, these are imported from Korea, Japan, and China. For mechanical components, brands like Shimano are in demand but don’t manufacture in India. Setting up manufacturing plants for these components in India could lead to the development of strong Indian brands, contingent on quality and price points.
Q. Do you see an export opportunity for components of electric cycles, and how significant could this opportunity be?
A. Yes, we definitely see a significant export opportunity for electric cycle components. As we scale up our production, we aim to open component exports to countries where we are not present as a brand. Our R&D team has developed components, such as the entire drivetrain, that have potential for export. We’re exploring partnerships with manufacturers who currently source components from neighbouring countries, aiming to replace them with our technology-driven components. We’re particularly focused on exporting motors, motor controllers, and colourful displays for various EV products.
Q. Where do you see more adoption of electric cycles, in ‘India’ (tier one and tier two cities) or ‘Bharat’ (tier three, tier four, and beyond)?
A. We see adoption happening in both ‘India’ and ‘Bharat,’ though the reasons for buying and challenges faced are different in each segment. In ‘India,’ electric cycles are seen as lifestyle and health products, while in ‘Bharat,’ they are viewed as practical, cost-saving solutions. Both regions offer massive opportunities, but ‘Bharat’ has a larger population, which presents a bigger market for us. As we evolve, we aim to continuously innovate and meet the changing needs of our consumers.
Q. How do you address the competition from low-speed Chinese scooters in the Indian market, especially in rural areas where consumers might prefer these scooters over electric cycles due to price?
A. The adoption of low-speed Chinese scooters has decreased significantly as consumers become more aware of their limitations and durability issues. While they still pose competition due to their low price, we believe that the quality, warranties, and brand value we offer will hold up against them. Additionally, major players have reduced their imports of these scooters. We are also working on product development to target this segment with better alternatives. Ultimately, we believe that informed consumers will choose quality and reliability over short-term cost savings.
Q. What factors have contributed to your rapid growth in the Indian market?
A. There are several key factors. Firstly, we launched our product at a higher price point than our competitors, around 50,000 rupees, which differentiated us and sparked curiosity. As we scaled, we were able to reduce our prices to around 25,000 rupees. Another crucial aspect is dealership adoption. Dealers have significant influence in our market, and we’ve ensured to provide value to them through excellent service, instant placements, and after-sales support. We also offer a 12-hour video call service to ensure customer satisfaction.
Q. In the next three years, do you anticipate selling more cycles in India or exporting more cycles internationally in terms of numbers, not revenue?
A. In the next three years, it is going to be a close race between our domestic and international sales. Our Indian market has caught up significantly in the last three years, with our market share reaching over 60% during last year’s Diwali season. However, our international team is also very confident, especially with our new facility set up to boost production. While I see international sales taking a slight lead, our team in India has done an exceptional job, and we hope to see more players enter the Indian market to further drive adoption.
