Towns such as Bikaner, Shillong, Meerut, Bareilly and Siliguri are seeing higher EV sales despite the challenges associated with access to an adequate charging network. Although still small numerically in comparison with conventional 100-cc motorcycles, electric scooters are the new rage in these towns.
Companies such as Hero Electric, Ather, Pure EV and Revolt have proposed bigger investments to expand their footprint in these markets.
‘We began retailing in Tier 1 markets, but as of now, we have expanded to Tier 2-3 towns. The excitement and demand we’ve seen in these towns has been phenomenal. In Tier 2-3 centres, when we index e-scooter sales to their population i.e, e-scooters sold per lakh population in a town, 8 of the top 10 towns are Tier-2-3,” said Ravneet Phokela, Chief Business Officer, Ather Energy.
This yet again challenges the stereotype that Tier 2,3,4 markets look for value products and are predominantly price-driven. Consumers in these markets are beginning to see EVs as an upgrade – and the technology of the future.
“All this drives the desire and aspiration, and the willingness to pay a premium for these products. Additionally, the fact that total cost of ownership is so attractive makes the overall proposition very compelling,” added Phokela. His company retails the Ather 450X and Ather 450.
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In FY 2022, 231,000 e-two wheelers were sold, up nearly six-fold from the year ago.
The latent demand was always there, but what plagued the market was the lack of credible EV options, said experts. In future, modern features, ride quality, reliability, efficiency, and overall customer ownership experience will play key roles in determining customer behaviour around EVs – both in big cities and small towns. The demographics of EV buyers today are very similar to that of the ICE scooter buyer who uses electric two-wheelers as their primary mode of commute.
ETtechNon-bank lenders are also keen to finance EVs in these towns and have launched tailor-made financial packages for customers “There is definitely interest to buy EVs in upcountry markets with enquiries going up in the recent past,” said Ramesh Iyer, MD, Mahindra Finance.
Iyer said, however, that it is difficult to say if a complete shift is taking place. Experts say that potential buyers are wary of the resale value of these products in such markets.
In an independent finding, customers across cities are now focusing on the long-term value and features offered by electric scooters as ownership costs of ICE vehicles continue to rise.
“However, the limitation is the spread of the retail network in rural markets. We are expanding our network here in these markets,” said Sohinder Gill, President, CEO, Hero Electric, and President of the Society of Manufacturers of Electric Vehicles (SMEV). “Consumers in these markets find electric two-wheelers a convenient mode of transport. With a perpetual shortage of fuel in these upcountry markets, EVs have become a suitable option.”
He added that the southern markets are leading the e-revolution, followed by Maharashtra and the eastern Markets.
Electrification has made steady inroads in the two-wheeler segment in India, pushing the share of the vehicles sold to nearly 2% of the total in the segment.
