Siddhartha Lal, Managing Director, Eicher Motors Limited (EML), who went on record last year stating that its bike making arm Royal Enfield will commercially roll out an electric motorcycle only in four to five years, has now stated he doesn’t see Internal Combustion Engine (ICE) vehicles pale into insignificance in the “coming decade”. Instead, ICE vehicles will complement the growing electric two-wheeler (E2W) market.
“Both the technologies (will co-exist) in the coming decade or so. In the foreseeable future, we will have internal combustion engines and those that run on batteries. An electric vehicle starts more at the lower end, as in (for) city mobility like scooters, etc. As you require a higher range, which means outside city travel, it's not feasible right now,” Lal, in a post-March quarter results virtual media conference, said.
Lal, who reiterated that Royal Enfield has started some development work on electric vehicles (EVs), said that high-range e-motorbikes need to be equipped with ‘much bigger batteries’, which increases the cost tremendously and will make the product “super uncompetitive” compared to the ICE versions.
“So, as the cost and weight of batteries come down over the next five to seven years, we will see more proliferation of bigger motorcycles. But, for now, of course, the city (mobility) market is a huge market, and EVs will continue to penetrate there,” added Lal.
While announcing the financial performance, EML revealed that it has earmarked a capex of around Rs 1,000 crore for FY 2024 for Royal Enfield, which is 33 percent higher than the Rs 750 crore spent in the previous fiscal. It has clarified that the outlay for the ongoing financial year will include investment towards product development of both ICEVs and EVs, electric vehicle manufacturing facilities, etc.
“You do see a bump-up in capex from last year to this year, and of course, some of it or a lot of it is related to EV projects. We believe we can really capture the market not just in India but also globally as well with some very interesting products. But again, that's all (still a little way away), and it is under very detailed development,” Lal further added.
Without giving any timeline on its maiden electric motorbike rollout, Lal maintained that it is still under “detailed development” but not ready for “primetime as yet”.
“We are working tirelessly on our EV development. It's just that the process takes more time because of the refinement that we want to bring into the quality, testing, and validation processes," he explained.
However, Lal acknowledged that the technology for EVs is fast changing and may become redundant in the coming years and Royal Enfield would have to reinvent itself in the process. He stated that the way it approaches the evolving technologies is by having a “much more agile product development process” for EVs wherein it can take certain decisions later.
“We can keep some aspects a bit modular. So, for example, if we see those certain technologies, like let's say, battery and motors, will evolve quicker than, let's say, the suspension or chassis, which may not. For those (changing) components, we could upgrade in the shortest time span rather than having to upgrade the full vehicle. For the first product we are following a very stringent process,” averred Lal.
Meanwhile, Royal Enfield’s parent company Eicher Motors reported a consolidated net profit of Rs 905.58 crore for the quarter ended March 2023, up from Rs 610.14 crore in the same quarter last year ― a growth of 48.42 percent. Revenue from operations came in at Rs 3,804.32 crore, up 19.13 percent over Rs 3,193.32 crore in the year-ago quarter, the Royal Enfield maker said in an exchange filing.
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