India’s biggest electric-scooter maker has called for the nation to end sales of gasoline-powered two-wheelers by 2027 to speed up a switch to clean vehicles that has fallen behind other countries like China.
“2027 would be a good time for new sales to be 100% electric,” Naveen Munjal, managing director of Hero Electric Vehicles Pvt., said in an interview. “If we leave it to market forces then things come along at their own pace and the transition will be much slower than what it could be.”
India’s shift to electric vehicles has been hampered by high prices and a lack of charging infrastructure. Whereas China accounts for 97% of the world’s e-scooter fleet, they make up less than 1% of total sales in India, according to BloombergNEF. Replacing gasoline two-wheelers is key to tackling some of the world’s most toxic air because they are more polluting than cars, yet comprise 75% of the 296 million vehicles on the nation’s roads as of 2019.
A stricter mandate for electrification will force local automakers to make the switch faster. Hero MotoCorp Ltd., the world’s largest maker of motorcycles, will launch its first e-scooter by March 2022. Bajaj Auto Ltd. plans to start deliveries of its Chetak electric scooter by the second quarter of next year and will set up a unit to make electric and hybrid models. TVS Motor Co. sells just one electric model, named iQube, in New Delhi and Bangalore, and plans to expand to 20 more Indian cities.
“Once the goals are in place, companies will start planning backwards in terms of the supply chain, re-skilling, infrastructure requirements and financial implications,” Munjal said. “The whole ecosystem begins to fall in place once you know what goals are.”
Founded in 2007, Hero Electric is competing with startup Ola Electric Mobility Pvt. and Hero MotoCorp, a separate company whose chairman is Munjal’s uncle.
Ola Electric, backed by SoftBank Group Corp. and Tiger Global LP, is building the world’s largest two-wheeler factory, and last week sold about 6 billion rupees’ ($82 million) of e-scooters on the first day orders opened.
Hero Electric is planning to invest 7 billion rupees to expand its capacity fivefold to 500,000 units annually. The New Delhi-based company is installing charging stations across India to improve the EV ecosystem and plans to expand its international presence by exporting to Europe and Latin America, Munjal said.
“We’ve got enough and more ammunition in our backyard to utilize,” he said. “With more competition coming in, the market is going to explode and we are going to be there to take advantage of that.”