A Milkman On Electric Scooter Heralds India’s EV Revolution

It’s around 7 p.m. and Dinesh Gurjar returns home after delivering milk to about 45 houses. He unloads empty containers and puts his scooter on charging in a dimly lit courtyard.

A petrol-driven Splendor motorcycle, made by India’s biggest two-wheeler company Hero MotoCorp Ltd., is parked in one corner of the half-covered front that doubles as a kitchen of his mud-and-bricks home.

The milkman from Umrain village in Rajasthan's Alwar, 164-kilometres southwest of Delhi, has switched from a motorbike to an electric scooter.

“With petrol prices now at Rs 100 a litre, there were hardly any savings,” Gurjar said, wiping off sweat as he sat down. He got convinced after his neighbour purchased a battery-powered two-wheeler a couple of months ago. What struck him was almost no running cost or maintenance.

His EV, manufactured by Hero Electric Ltd., India’s largest electric two-wheeler maker (not part of Hero MotoCorp), runs for about 110 kilometres on a single charge. Having paid Rs 67,000, he expects to recover the cost by next year by saving on petrol.

Gurjar, one of India’s ubiquitous milkmen seen ferrying oversized containers on motorbikes, is an early convert in a tiny market. But he is part of a quiet electric revolution brewing in India’s mofussil towns. As petrol and diesel prices hit record highs, pandemic-scarred Indians are searching for cheaper options. And poor public transport trumps concerns about lack of charging infrastructure and irregular power.

Alwar, famous for the Bhangarh Fort and 'kalakand' or milk cake, is a city of four lakh people. And it represents the electric transition beyond big cities. Four new EV dealerships opened in the past four months. BloombergQuint’s enquiries revealed two more are expected shortly.

“It is a misnomer that the urban markets are driving EV adoption. It’s the small towns,” Naveen Munjal, managing director at Hero Electric, told BloombergQuint over a WhatsApp call. A large part of the dealer network, he said, is in tier 2 and 3 markets, he said.

For Hero Electric and peers Okinawa Autotech Pvt., and Okaya Power Group, at least 65% of the sales come from smaller cities and towns, and rural India.

Ashok Gupta, a dealer for Hero Electric in Alwar, said rising fuel prices have changed the dynamics almost “overnight” as consumers were hesitant about EVs because of low incentives earlier.

“With more electric scooters on the road, the confidence is further improving,” Gupta said, adding that most of the sales are driven by word of mouth. “If a customer comes from a nearby village, enquiries from that place go up.”

Electric scooters make up less than 1% of more than 1.5-crore two-wheelers sold in India every year.

Yet, demand is surging. According to data by Centre for Energy and Finance, 30,000 city-speed electric vehicles have been sold in India so far this fiscal compared with 40,800 in all of FY21.

Supply, however, is thin.

Dhauliaram Chaudhary booked an electric scooter, like neighbours in his village, some 20 kilometres from Alwar city. “It’s almost impossible to survive with record petrol prices,” said the daily-wage earner.

But he will have to wait for a month because of supply shortage.

About 1,200-km south in Narayangaon, a town in Maharashtra, Vaibhav Solat, a small dealer of Okinawa scooters, doesn't have enough vehicles to meet the demand.

“There is a waiting period of three to four months for the top-selling models like the IPraise+ and the Praise Pro,” he said over the phone. Solat has seen demand outpace supply for the first time in three years. From selling about two or three units a month, he now has a run rate of 25-30.

Solat can do 40 a month but supply constraints keep his sales capped. Enquiries are coming not just from his town but also nearby villages. “Farmers here need scooters because public transport is poor,” Solat said. “But rising petrol prices are hurting them.”

Gupta doesn’t have enough stock even for display at his Alwar dealership. His monthly sales have more than doubled to 60 units, and he is already booking over 100 scooters.

The crunch exists across India. Dealers from Uttar Pradesh, Madhya Pradesh, and Maharashtra that BloombergQuint spoke with corroborated that supply is way short.

Companies, too, have seen demand explode, prompting Hero Electric to stop bookings in certain cities. Okaya Power Group started making low-speed electric scooters in July but was stocked out in two months.

Fuel is not the only reason buyers are adopting electric mobility. Petrol motorbikes and scooters have turned costlier in the past year as companies hiked prices to offset rising commodity costs.

Incentives by the central government under the second phase of its Faster Adoption and Manufacturing of Hybrid and Electric Vehicle and additional benefits and tax cuts by states made EVs cheaper.

Vehicles running at 45-50 kilometres per hour are not only cheaper than internal-combustion engine equivalents but also low-speed EVs that can’t go above 25 kmph.

Munjal said city-speed units contribute 70% of the sales. “These are also easily financed. And that’s where the market is shifting.”

Okaya, maker of batteries and low-speed scooters, plans to launch a city-speed two-wheeler by Diwali.

Still, it’s the smaller brands that are looking to make most of it as bigger manufacturers are still to expand beyond big cities.

Large two-wheeler makers such as Bajaj Auto Ltd., TVS Motor Co., Hero MotoCorp-backed Ather Energy Pvt. are missing in small towns. Barring Hero Electric, Okinawa, Ampere Electric Vehicles Pvt. and Okaya, the market is flooded with lesser-known local brands. One estimate suggests there are 100 electric scooter makers in India.

Even in Alwar, there is little presence of big brands. Gurpreet Singh, a dealer of Sahara Evols, a multi-brand dealership, started out a month ago. His outlet is right beside a TVS Motor store, which does not sell its electric iQube yet in the city. Hoping that anyone who comes for a petrol vehicle will definitely check an electric variant at his next-door dealership.

Setting up some of these EV outlets is cheaper. Singh spent Rs 12-13 lakh. A dealership of a decent two-wheeler brand costs Rs 2-3 crore, an owner said who didn't want to be identified out of business concerns. Even a sub-dealership costs Rs 30 lakh at least, he said.

Singh sells brands like Cosbike and SuperEco, besides Okinawa and Hero Electric.

Less than 100 metres away, DEV Motors, an unknown U.P.-based electric vehicle maker, has set up a store of low-speed models.

“EVs are the future, and the response is getting better with rising fuel prices,” Singh said. He expects demand to soar when he gets vehicles with speeds upwards of 40 kmph.

Gurjar can vouch for that. Four people in his village have already purchased battery-powered scooters after him. “Every now and then, somebody stops and enquires about the vehicle. People are curious about electric vehicles, especially if it has a loading capacity just like mine,” he said.

The proud owner of the new electric scooter even gave this correspondent a ride back to the car as it couldn’t enter the narrow, unpaved lane. His only gripe is that small wheels are not ideal in a farm and get stuck in loose soil.

Not a deal-breaker since he can save Rs 4,000 a month. And he plans to gift his sister one on her wedding.