E-Rickshaw is a booming sub segment in electric vehicles

Frost and Sullivan estimates that that there are 0.4 million e-rickshaws in India currently and is speculated to grow to one million units by FY2025. The growing market for electric vehicles has come a long way from conventional batteries to newly introduced and developed lithium-ion batteries. With these new developments, e-rickshaw has been adopted well in all metropolitan and tier-1 and tier-2 cities quickly. Sunny Garg, Director, G & G Automotive discusses on the e-rickshaw segment popularly embracing electric vehicles.

What is driving e-rickshaw sub segment in electric vehicles?

Compared to internal combustion engine (ICE) vehicles, e-rickshaws are more eco-friendly, low on maintenance and are very easy to operate with very little add-ons. Two wheelers and three wheelers were the first to adopt successfully the new trend of electric vehicles. E-Rickshaw is a booming sub segment in electric vehicles. Many state governments, today, have given discounts to buy an e-rickshaw. Auto-rickshaw owners have their charging locations at their respective houses and some operate on battery swapping model which involves a bit of risk. These r-rickshaws have become instantly popular over the plying routes where share auto is a preferred option. Many auto-rickshaw unions have also helped penetration of e-rickshaws in the market.

Tell us about the business of e-rickshaws.

We have sold around 650 r-rickshaws from January 2019. Previously, we were into battery swapping and manufacturing services. Battery swapping has to be handled with care while e-rickshaw manufacturers have been selling swapping as well as fully electric type from 2015. As 90 per cent of the cost of e-rickshaw comes from the lithium-ion battery and it being a major component while all other parts are very easy to assemble and are cheaper.

Additionally, we are also offering ownership models where after 2-3 years of loan payment the e-rickshaw driver becomes owners. These drivers are thoroughly trained to handle their vehicle. Auto drivers who were plying seven seats in one shared trip are able to do so with their new e-rickshaw too, making it a successful model. For the above trip of almost four km the cost is just Rs five.

What are challenges for adoption of e-rickshaws?

The adoption was comparatively faster than that of the current time till 2018. Post 2018, crackdowns over highways and specific roads governed by state laws have imposed restriction over plying over some routes. E-rickshaws are beneficial but convincing a buyer is difficult as there are still many rumours over legal paperwork that it will require special passes, special permissions, and many more. Government can promote e-rickshaws very easily but they are not doing so. We are grateful for passing on benefits due to low import costs and tax considerations but promotion will make it more demanding and temping to build a big market and faster adoption. First the government should promote development of the charging infrastructure which is a must for the developemnt of the EV industry. Another challenge is to install the charging infrastructure in the rural regions of India. Use of two-wheelers is dense in the rural regions and building infrastructure in rural areas will help create more awareness and will boost adoption of electric vehicles, making India more sustainable.

What future do e-rickshaws hold?v This segment is very promising and is helping all start-ups in the industry. As of now the e-rickshaws are popular in the cities, while soon are expected to reach rural regions of India. TERI estimates suggest that the three-wheelers could increase from 6.8 million in 2017-18 to 19.5 million in 2030 and further to 66.25 million in 2050, which provides scope for leapfrogging towards e-rickshaws and replacing the conventional three-wheelers.

State governments have given discounts to buy an e-rickshaw. Many auto-rickshaw unions have also helped penetration of e-rickshaws.