Hero Electric, India’s biggest electric two-wheeler company, is witnessing a steady increase in demand for electric scooters from companies that specialise in last-mile deliveries.
Logistics providers of e-commerce companies such as Flipkart or those hired by Amazon and others, as well as food delivery agents of Zomato and Swiggy are switching to electric scooters. Some start-ups are also engaged in last-mile connectivity for individual commuters.
With an eye on this segment, Delhi-based Hero Electric is developing e-scooters specifically for institutional, business-to-business (B2B) buyers. These scooters are quite different from the stylish and aesthetically focussed personal scooters. According to a senior Hero Electric executive, such e-scooters promise better cost dynamics than personal scooters.
Cost benefits
“It is difficult to convince a personal buyer to give up petrol and switch to electric. But in the B2B segment it is much easier. To ride 80 km, someone may be using two litres of petrol, which is more than Rs 160 a day. But in the case of electric, the same range can be done in four units of electricity, which is around Rs 30. This is a very appealing cost proposition for the B2B customer,” Sohinder Gill, CEO, Hero Electric, said in an interview with Moneycontrol.
According to Gill the interest in electric two-wheelers from non-personal buyers is rising. Flipkart, for instance, has committed to convert all its vehicles to electric by 2030. Amazon is also promoting adoption of EVs by adding 10,000 battery-electric delivery vehicles by 2025.
Electric two-wheelers saw a jump of 20 percent in sales to 152,000 units in FY20, up from 126,000 units in FY19, according to the Society of Manufacturers of Electric Vehicle (SMEV). A majority of these were low-powered, energy-efficient scooters used by institutional buyers.
“One of the models has been upgraded to adapt to quick charging. It is a city-speed workhorse that moves at a speed of 40-50 km per hour. Its battery-replacement cost is also half and electricity consumption is less. A new model will be launched in April whose speed and acceleration will be on par with any petrol-powered scooter,” added Gill.
A B2B product
As the commercial buyer intends to use the e-scooter for business purposes, the vehicle has been designed suitably. Such scooters have greater load-carrying capacity (100 kg or more) with stronger suspension systems than personal models.
Estimates indicate e-commerce and courier-delivery agents cover 70-80 km in a day, while food-delivery and fleet operators run their vehicles over 40 km in a day. Such requirements are met by most electric scooters, which offer around 100-120 km mileage on a full charge.
As for price, a B2B scooter with an extended range of 100 km is priced at around Rs 70,000, while a more stylish B2C scooter with a range of 65 km is priced at around Rs 65,000.
“Personal segment products have to be very appealing and the suspension and comfort have to be top-notch. But it is the opposite for the B2B segment. For instance, the shock absorbers required in a B2B vehicle have to be twice as strong compared to a B2C. Braking, overheating and wiring harnesses have to be better. Rapid charging brings a huge load onto the battery. In 15 minutes, you pump a charge that would normally take four hours. If the heat produced is not managed properly, then the whole system can go down,” added Gill.
In the first week of September, Hero Electric and EV Motors joined hands to roll out battery solutions and charging infrastructure to run a pilot of around 10,000 e-bikes over 12 months in a few cities. The network can provide 30-minute rapid charging to last-mile-delivery operators, including e-commerce, online food, fleet operators and courier-delivery businesses.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
