“In Cities Like Muzaffarnagar, Consumers Prefer Low-Speed EVs”

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How are electric vehicle sales faring in India’s Tier-3 cities? Are low-speed Chinese scooters impacting the sales of legacy OEMs? Pankaj Kumar Gupta, a distributor for PureEV and Zelio E-Bikes, highlighted the challenges encountered in less urbanised regions to EFY’s Aryaman Raghuvanshi.


Q. What are your views on electric two-wheelers (E2Ws) in India?

A. Electric two-wheelers (E2Ws) are seen as a key element in urban EV adoption in India, offering benefits over traditional ICE vehicles. Yet, their popularity doesn’t reach Tier 3 cities, or ‘Bharat,’ where specific challenges slow their uptake. Despite growth in urban areas, expansion into Bharat remains limited. Overcoming these challenges is essential for manufacturers to meet the varied needs of these markets.

A major challenge in the electric automotive industry is the lack of standardisation in spare parts, leading to extended vehicle downtime due to delays in ordering, receiving, and installing replacement parts.

Q. What led you to enter the electric vehicle (EV) market?

A. Our transition into the EV market was influenced by our prior experience as a Honda ICE two-wheeler (2W) dealership. We observed that rising fuel costs significantly impacted our customers, who sought more cost-effective alternatives to traditional 2Ws. The success of electric three-wheelers (E3Ws) and vehicles like E-Rickshaws highlighted the potential of low-speed electric two-wheelers (E2Ws). Recognising their affordability and environmental benefits, we decided to introduce these EVs to our consumers as a superior option.

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Q. What is the preferred type of vehicle among consumers in cities like Muzaffarnagar?

A. In cities like Muzaffarnagar, consumers generally prefer low-speed vehicles. This preference is primarily driven by safety concerns, especially among parents of school-going students. Additionally, the affordability of low-speed vehicles, which typically cost between 50,000 to 65,000 rupees without the added expenses of registration and insurance, makes them an attractive option. These vehicles are particularly appealing to students as they do not require a driving licence or helmets.

Q. What can be done to increase adoption of high speed EVs?

A. There is a need to educate the public about the benefits of high-speed vehicles. People in these cities seek to maximise the utility and return on investment from their vehicles. To increase the popularity of high-speed vehicles, it is crucial to address concerns related to their pricing and the cost of battery replacement.

Q. Can you provide an estimate of the monthly sales volume for these vehicles?

A. Currently, due to a somewhat sluggish market, we are selling between 15 to 20 vehicles per month. However, I anticipate a significant increase in sales in the upcoming months. As awareness of the benefits of these vehicles grows, I foresee rising interest among consumers, particularly due to the substantial cost savings they offer. Based on these factors, I expect our monthly sales to double in the near future.

Q. What are the primary challenges in operating your dealership, particularly for electric vehicles (EVs)?

A. One of the most significant challenges in running an EV dealership is the need for trained professionals who can promptly diagnose and resolve vehicle issues, minimising downtime. However, a critical pain point is the availability of parts. Even if technicians are well-trained and knowledgeable about EV components, they can often not address problems if the necessary parts are unavailable. This issue is more pronounced in EVs compared to internal combustion engine (ICE) vehicles.

Q. Is it the same with the ICE vehicle dealership that you operate?

A. OEM and third-party spare parts are readily available in service centres for ICE vehicles. In contrast, EVs often require parts to be ordered directly from the OEM, leading to delays. The spare parts network for EVs is less developed, and there is a lack of standardisation in the EV ecosystem. This challenge will likely diminish over time as the number of EVs on the road increases, leading to a more extensive service and spare parts network.

Q. What impact do you anticipate larger OEMs like Honda or Hero will have when they enter the EV market?

A. The entry of established OEMs like Honda or Hero into the EV market will likely have a significant impact. These companies already possess the necessary networks and capital to enter the EV business successfully, and they are strategically timing their market entry. Companies like OLA and Ather have gained a certain market share primarily because larger players like Honda have not yet entered the EV market.

Q. Will the confidence in E2Ws increase as legacy OEMs enter the market?

A. The entry of such reputable brands brings a sense of reliability and confidence in the after-sales experience. These brands have an extensive nationwide service network, instilling trust in consumers that they can receive service even in smaller towns. Once these brands enter the market, there will likely be a 60% shift of consumers towards them.

Q. How will the entry of legacy OEMs into the electric vehicle market impact dealership operations?

A. Introducing established OEMs into the electric vehicle (EV) sector is expected to significantly enhance dealership operations. Dealerships will benefit from smoother and more profitable business processes as they work with brands with well-established reputations and systems. This shift is particularly advantageous because it addresses critical issues currently faced by dealerships, such as the availability of spare parts and after-sales services. With OEMs’ extensive and robust networks for servicing and spare parts distribution, dealerships can offer more reliable products and support, thus improving the overall EV ecosystem.

Q. Could you share your insights on the benefits of E2Ws compared to traditional ICE vehicles, especially considering your experience in selling both types?

A. Electric two-wheelers (E2Ws), especially those equipped with sealed maintenance-free (SMF) batteries, are priced between `50,000 to `60,000 and come with a one-year warranty. Models with lithium-ion batteries, offering a three-year warranty, are priced around 100,000 rupees. These prices are increasingly competitive when compared to traditional ICE vehicles. Over time, E2Ws are more cost-effective due to lower operational costs, as they eliminate the ongoing expense of fuel required by ICE vehicles. Additionally, from a financial perspective, the savings on fuel and maintenance can offset the initial cost of an E2W, effectively allowing the vehicle to pay for itself. Besides the economic advantages, the environmental benefits of reducing emissions make E2Ws a more sustainable choice.

Q. How do you anticipate the recent discontinuation of the FAME subsidies will affect sales?

A. The FAME subsidies have played a crucial role in promoting awareness and demand for these vehicles in the market, which has also contributed to a reduction in their costs. In my opinion, a sustainable demand has been established, regardless of whether subsidies continue. While the removal of subsidies might initially impact sales slightly, I believe that the sales figures will eventually rise even more due to the inherent advantages and growing market acceptance of these vehicles.


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Aryaman Raghuvanshi
Aryaman Raghuvanshi
Aryaman Raghuvanshi is a Journalist at EFY. His passion is to explore the future of mobility, which gets him to cover latest technologies shaping the future of automobiles and EVs. But, at times he writes on broader technologies too. LinkedIn: https://www.linkedin.com/in/aryaman-raghuvanshi-2431b7153

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