Company says high vehicle prices due to costly batteries, lack of charging infrastructure, and uncertainty over continuous battery supply are the main hurdles. Almost every other two-wheeler maker in India has either launched a battery-powered EV or is developing one.
Honda, one of the world's biggest two-wheeler brands, believes that India is not yet ready for the mass adoption of electric vehicles (EVs).
Interestingly, almost every two-wheeler maker in India has either launched a battery EV or is steadfastly developing one.
For example, Bajaj Auto, TVS Motor Company, and Hero MotoCorp-backed Ather Energy have all launched fully electric two-wheelers.
Others like Royal Enfield, Suzuki, and Yamaha have started testing the waters. More than a dozen startups are also engaged in electric scooters and motorcycles.
Honda, which is also the second-largest two-wheeler maker in India, says high vehicle prices due to costly batteries, lack of charging infrastructure, uncertainty over continuous supply of batteries sourced locally or from abroad, and non-existent supply-chain network are the hurdles.
The Japanese story
“Twenty years ago, Honda was the first to develop an EV in Japan. Even after 20 years, we could not see a success story from the business point of view, compared to gasoline vehicles”, Atsushi Ogata, President, CEO and Managing Director, Honda Motorcycle and Scooter India, told Moneycontrol.
As at the end of 2019, less than 1 percent of motor vehicles were electric in Japan. In India, electric two-wheeler sales clocked a 21 percent growth in FY20 to 152,000 units from 126,000 in FY19. However, a majority of these are believed to be low on power, and cheaper alternatives to the Rs 1-lakh category models.
Cost conundrum
Electric two-wheelers, especially those which can match a gasoline-powered two-wheeler in on-road performance, are priced 50 percent higher than their petrol counterparts. This is mainly because of high battery costs.
For instance, electric scooters Bajaj Chetak and TVS iQube are priced more than Rs 1 lakh. The 450 and 450X from Ather Energy are priced above Rs 1.15 lakh. The mileage given by each of them is less than 100 km to a full charge, whereas a petrol-powered scooter can run for up to 250 km on a full tank.
While it takes much longer to charge an EV, its operational costs are at a fraction compared to a petrol-powered vehicle. “From the cost point of view, EVs are not the same as gasoline-powered motorcycles,” added Ogata.
Lack of infrastructure
Back in Japan, Honda and three other companies – Kawasaki, Yamaha and Suzuki – formed a consortium for standardising replaceable battery technology for electric motorcycles. The standardisation helps in uniformity in the kind of battery required to power EVs.
A battery supplier who would manage the EV-charging infrastructure will supply one kind of battery to the entire market. The EV buyer can thus drop off a drained-out battery and replace it with a fully-charged battery at the charging station, irrespective of the brand of bike.
“What is important is how we establish an infrastructure which is the same as gasoline vehicles. So, without that kind of infrastructure, I believe, it (EV launch) will not be successful. In Japan, we are trying to find a solution through a consortium where the battery management system is separate from the actual vehicle. In case this system becomes successful, we can implement this outside of Japan, and in India too,” added Ogata.
The Indian government is also moving in the same direction. An advisory issued in mid-August allowed states to register electric two- and three-wheelers without batteries. There is, however, no uniformity in battery usage in EVs manufactured and sold in India.