07 August 2008

Indian Consumers Try Electric Vehicles as Petrol Prices Soar

Tens of Thousands of Indians Buy Battery-Powered Transport

Electric Scooters Could Take Half of Market

"The near-term potential market for electric vehicles in India is five million per year," says battery-powered-scooter entrepreneur Anil Ananthakrishna, Chairman and CEO of Ekovehicles Private Limited of Bangalore. China already produces 10 million yearly and India will be rapidly catching up. Petrol-powered 2-wheel vehicles sell 10 to 12 million units per year in India, so use of electric vehicles could significantly cut fossil fuel consumption over time.

Ekovehicles e-bikes
Mr. Ananthakrishna has been developing and commercializing electric 2-wheeler technology for more than 30 years. Recent increases in the price of gasoline have boosted interest in battery-powered vehicles in India. Ekovehicles sold 15,000 vehicles over the past two years, and hopes to sell as many as 60,000 in 2008. It is rapidly expanding manufacturing capacity and introducing new models.

Ekovehicles is seeking venture capital investment to expand its marketing, distribution, research and manufacturing capacity and to enter additional markets outside India. Two battery companies have already invested.
There are about 65 million scooters on India's roads. Even if some consumers upgrade to cars like the Tata Nano , others will upgrade from bicycles or buses.

Consumers Care About Cost, Not Environment

traffic in India
Although Ekovehicles' products look just like gasoline-powered competitors, and cost about the same, they have much lower fuel costs. Commuting to work on a petrol-powered scooter costs about 50 rupees per day in fuel (US$1.20 or €0.75). Bus fares are 10 rupees each way, and public transit is woefully inadequate in most Indian cities. Electricity to recharge vehicle batteries for a similar trip costs around 4 rupees per day, and in many cases electricity is subsidised or unmetered.

Cost savings is the main selling point of electric vehicles in India. There are government programs both at the federal and state level to subsidize electric vehicles for their environmental benefit (tax exemptions and the like). But consumers do not yet attribute much value to positive environmental impacts. The primary direct benefits are to health, since electric vehicles have no street-level emissions, a particular advantage compared to competing 2-stroke vehicles. If electricity generation in India can increase use of renewable energy sources such as solar, waste-to-energy, and wind, electric vehicle emissions will decline correspondingly. Nuclear power could also contribute to reducing the carbon intensity of transportation if electric vehicles become a significant part of the transport mix.

Additional information of electric scooters in India here .

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