How to advance from premium to mass?

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Kaushik Madhavan, VP of Mobility at consultancy and Market research firm Frost and Sullivan, agrees. “I do see that now, and that is exactly what Ather is doing because they are creating the brand first,” he says over a phone call. “Because the way images are built will definitely have an impact on their market as well.

So Ather will also introduce, in the near future, a mass-market product which will be positioned much below their existing models.” Media reports suggest Ather is working on 125cc rivaling scooter, as well as a motorcycle.

Still a product?

Won’t Revolt clash with Ather then? “I wouldn’t think there is competition there, because a scooter is still a product owned by a small family or a person trying to get from point A-B. So I think Ather will have its set of customers and won’t be cannibalized by Revolt,” says Madhavan.

The reason that companies have mostly focused on scooters is that they are easier to package, he adds. Many scooters have in-wheel motors—electric motors attached to the wheels running the scooters. This isn’t possible on bikes. Not that it’s stopping Revolt or established players, who might ride into the e-motorbike space.

Taking on the investor

If established bike companies do join the EV race, they’ll come with advantages—plants, networks, and cash. EV startups may be the disruptors, but they won’t necessarily survive in the long-term. They need funds, and they need a network.

This will take years to develop. BSA and Hero Electric tried making a dent years ago, hiring many senior officials from companies like Hero Motocorp and Bajaj. BSA discontinued their EV, and while Hero Electric is currently one of the highest-selling EV makers, they do not sell as much as ICE two-wheelers.

In some cases, it’s a story of not just David vs Goliath or new tech vs old branding, but also the startup taking on the investor. The hero has invested in Ather, and TVS funds Ultraviolette. While people in the industry say the ICE biggies have established networks and cash, the contrary can be seen in the three-wheeler industry.

“If you look at the existing player in the rickshaw market, the existing players can’t hold a candle to the number of players that are there today who are selling volumes much more than what the established players are doing,” says Madhavan.

The same could happen in the two-wheeler segment as well, he says. While older players have established networks of dealers and service centers, the tech and the approach brings in new ideas. For instance, Ather calls its showrooms “Experience centers”, which look less like a showroom and more like a lab. Revolt, of course, is pre-booking via Amazon.

People ready to invest though

The automobile industry is very capital-intensive. While there are companies and people ready to invest in EV startups, it’s a long-term project, and it can take a while to get a return on investments. “Who’s going to put money in bike manufacturing?” asks Vikash Mishra, a former EV consultant in Shakti Sustainable Energy Foundation. “For the first few years, you have to take a loss. You will not have the scale, you’ll not have the numbers. But you will have to price aggressively and offer a good product,” he adds. “So you will lose money. There has to be financial backing.”

Besides, the buck doesn’t stop at the, well, buck. Narayan Subramaniam, CEO of Ultraviolette, says “[With] a motorcycle, you have to balance not only the ergonomics of the vehicle but also make it as user-friendly on the road on a track in terms of weight distribution, balance, straight-line speed, cornering ability, braking distance.”

Frost and Sullivan estimate that two million electric two-wheelers will be sold by 2025. This number will be revised due to the cut in GST and taxes on EV and components. While two million is a significantly large number, it accounts for less than 10% of today’s market. The market is set to grow further by then. “Compared to the conventional 2-wheeler market it’s very very small, but e-rickshaws and e-2-wheelers will be the first wave of electrification,” says Madhavan.