India is hitting on all cylinders to drive the electric vehicle revolution. To that end, finance minister Nirmala Sitharaman has announced income tax rebates of up to Rs 1,50,000 on the interest paid on loans to buy electric vehicles. The minister also declared customs duty exemption for lithium–ion batteries used in EVs.
India has set deadlines to rid fuel-run three-wheelers (by 2025) and two-wheelers (by 2025). The industry sources said the tax benefits would leverage two and three wheeler EV industry than four-wheeler.
The data released by Indian automobile manufacturers shows around 3.4 million passenger cars were sold in the country against 21.2 million two-wheelers in the last fiscal. The number of three-wheeler sold stood at 0.7 million units.
Mobility startups are also shifting their focus to the EV space. Two-wheeler rental company Bounce has recently launched over 1,000 electric vehicles in Bengaluru.
Bengaluru based car-rental company Zoomcar has been piloting electric bikes for the past couple of months in the city and will soon launch EV two-wheeler. The Passage sat down with Zoomcar CEO Greg Moran to talk about India’s ambitious electric vehicle project, Zoomcar’s roadmap and a lot more.
The Passage: How will India’s decision to reduce tax on buying electric vehicle affect the industry?
Greg Moran: You’re certainly going to see adoption on the two-wheeler and three wheeler sides first. It's a lot more economically advantageous than the four wheeler. Today you are pretty much capex positive when it comes to bikes and three wheelers.
In the next one or two years, it will be cheaper than a petrol, CNG or diesel car. You will see 100% shift to electric two and three-wheelers.
I will be very surprised if in five years they are still selling petrol bikes or three-wheelers. Having said that, I think cars will take a bit longer in their conversion cycle, mainly because the capex parity is much further off as it’s still 60-70% more expensive.
Though in shared subscription model, you definitely have the potential to fast track adoption for electric cars. We can reduce the overall operating costs by 60-80% in shared subscription; that's actually quite powerful.
The Passage: What made you shut down bike renting arm Pedl?
Greg Moran: We are bullish on micro mobility. In 2017, we were the first ones to launch micro mobility services in India. We saw tremendous demand for cycles just like China. We got two to three rides per day.
The real challenge with Pedl was the high demand. We saw too much usage of the service and the cycle quality itself was not so good. There are a lot of challenges when you produce locally because, at times, the scale of production is just not there. China is actually much better in terms of scale. Also, the quality you see in India is not on par with China.
We are also looking at it from a shared mobility standpoint. We obviously need to have a very different type of cycle for shared mobility than you would have for personal mobility. That was something we thought we needed to change. Now, we are focusing on the build quality and are redesigning the hardware ourselves.
We have been working on the hardware design over the last couple of months. Once we have the comfort in design and the ability of manufacturing, then obviously we would look at a re-launch.
The Passage: Would the new fleet be electric?
Greg Moran: No. Electric cycles are too expensive. The cost structure doesn't make sense. Especially, when we are already operating electric scooters. There's no reason to look at electric bicycles over electric scooters, because electric scooters are not that expensive incrementally. I don't see electric cycles as a market in India.
If you look at the US and Europe, companies like Jump (owned by Uber) are operating electric bicycles because these countries have more defined infrastructure.
The Passage: How many electric vehicles do you have on the platform?
Greg Moran: We have around 400 electric four-wheelers, which is about 5% of the total vehicles (8,000) on the platform. For the next couple of years, that will probably remain the same. In six or seven years, I think we would be 100% electric.