What is the potential size of the global electric cycles market? As electric cycles gain popularity in the US, the UK, and many European countries, do India-made electric cycles have a competitive edge? Also, is there potential in the component ecosystem? Atulya Mittal, Founder of Nexzu Mobility, discusses with EFY’s Mukul Yudhveer Singh
Q. What is Nexzu Mobility, and why start with electric cycles?
A. Nexzu Mobility was started about seven years ago when the electric mobility space was ripe for the market. Unlike the West, India is transitioning to light vehicles, so we chose to start with electric cycles. After careful consideration, we concluded that this category offers India the greatest potential to make an impact on the global markets.
Q. Would ‘that impact’ also include components for electric cycles?
A. Electric cycles are the consumer-facing product, but there are segments that are not consumer-facing, which we don’t often mention. While the structural components differ, the electric powertrain components for mopeds, electric scooters, and electric motorcycles are similar.
Essentially, electric cycles serve as a beachhead for Nexzu Mobility. This beachhead will enable us to expand into all aspects of the value chain concerning EVs, including powertrain parts, battery packs, technology, electronics, and more.
Q. Does this mean expansion into consumer-facing verticals as well?
A. Yes, expanding the consumer-facing vertical with new segments and products is part of our vision. Simultaneously, providing technology and components to our peers is also integral to our strategy.
Q. But the electric cycle market in India is still in its nascent stage!
A. Indeed, there are only a few adopters of electric cycles in India, and there is a need for greater awareness and definition of the category. Our current objective is to educate the market about EV cycles.
Q. What about the global electric cycles market?
A. Globally, this market is substantial. The US sells over a few million electric cycles annually. Germany’s last fiscal year saw two million units sold, while the UK is approaching a million units in its electric cycles market size. For us, the opportunity lies in making India the world’s electric cycle manufacturing hub. In doing so, we aim to compete with our neighbouring countries that have taken an early lead in this space.
Q. What is the plan of action from here?
A. We are in advanced discussions within the ecosystem, exploring powertrain components, battery components, and battery packs. While I cannot disclose much about our industry peers, Nexzu is gearing up for significant activity. We will manufacture these solutions for our consumption and for our peers within the network.
Q. What is the conversion cycle for components in this segment?
A. The conversion cycle for a component is much longer than that for a B2C product. It involves modifications, design, engineering changes, and more. However, this time frame will be shorter as we have already utilised many of these components and technologies in our products.
Q. What does the term ‘electric cycle factory of the world’ entail?
A. Establishing such a factory requires a large ecosystem. Brands that retail the best electric cycles, motorcycles, or scooters do not manufacture everything independently. They rely on collaboration with various partners throughout the supply chain. The concept of a supply chain originated from the automotive industry, and we are building on that by setting up all the necessary aspects of the supply chain.
Q. Is this where the ‘EV Park in Gujarat’ comes into the picture? (FYI – Nexzu is setting up an EV Park in Gujarat)
A. Absolutely! We have found that the cluster approach is most effective in the automotive industry. One of the best ways to accelerate this movement in the country is to establish infrastructure for component manufacturers to facilitate plug-and-play.
Q. Has work on this front started?
A. We initiated discussions with the government late last year. The agreement is to develop a smart industrial city dedicated to manufacturing EVs, and the master planning for this is underway.
Q. Hero has a large electric cycle park in Ludhiana. EMotorad is making significant plans in the components business, and there are more such players. Is there room for this many players in the vertical?
A. We have witnessed numerous players enter and exit this vertical over the last couple of years. There is considerable consolidation happening, and the vertical is now left with a maximum of four serious players. The demand in India, coupled with global demand, is significant enough to accommodate many more players than we currently have. Despite what Nexzu, Hero, or EMotorad does, the pie will only continue to grow. The space where we compete with each other is limited; instead, we all contribute to enhancing India’s reputation in the electric cycles and other lightweight electric vehicles segment.
Q. Is there a low-hanging fruit in the light electric vehicle market?
A. There is ample opportunity in the cargo and logistics segments. Many brands we interact with daily employ over half a million people who use two-wheelers for deliveries. The economics are unfavourable, whether it’s the high capital expenditure for EVs or the high operational costs for ICE two-wheelers. We are working to address these challenges.
Q. Five years from today, will you sell more in India or more outside India?
A. India’s population is approximately 1.4 billion, while the rest of the world’s population is around 6.5 billion. With these numbers in mind, our aim is to sell more outside India. In the Indian market, we aspire to be the leading electric cycle brand, targeting 50% of the electric cycle market share.
Q. What is the current market ratio?
A. The electric cycle market in India is currently minuscule. We need to grow by a factor of 100. We have engaged in discussions with the central government and various state governments, all of which are eager to see this market expand four to five times every month. The importers of electric cycle containers have exited the market. These factors combined create an environment for further market growth.
Q. Will you be partnering with players from India for this significant shift in the electric cycle market?
A. Yes, partnerships are crucial moving forward. We recently invested in a startup called Revo for powertrain solutions. Additionally, we have excellent partners within the supply chain who are assisting us in designing and manufacturing solutions.
Q. Are you also considering technology transfer from outside India to India?
A. Some electric vehicle companies within the electric motorcycle domain, commercial electric vehicles, and others have gone bankrupt. Our observation is that they were not designing for our market. For India, innovation needs to happen within India! I don’t believe there are any groundbreaking technologies for light electric vehicles that we must import into the Indian market.
Q. What’s the next step for you?
A. We have established a separate organisation named Lixir for the battery pack business. Furthermore, we will soon announce more details about the components business. We are exploring LFP and NMC, and we are also working on sodium ions. Additionally, we are designing battery packs that will incorporate a combination of sodium-ion and lithium-ion technologies.
