Electric two-wheeler adoption gaining traction in semi-urban, rural markets: Shriram City MD & CEO

Contrary to widespread perception, adoption of electrical two-wheelers is on an uptrend in semi-urban and rural areas due to subsidised energy that helps customers lower the operating value of a automobile, in accordance with Shriram City Union Finance MD and CEO YS Chakravarti.

Even as the general gross sales of two-wheelers haven’t returned to pre-COVID ranges and that individuals are additionally suspending their purchases as a consequence of greater operating prices with petrol changing into costlier, loads of demand is coming from rural and semi-urban areas.

“One good thing I am seeing is that a lot of demand for electric two-wheelers is coming from rural and semi urban areas. The perception was that EVs will be largely confined to urban centres, but a lot of the demand is also coming from rural and semi-urban areas, particularly rural because power is subsidised there,” Chakravarti stated throughout an interplay with PTI.

Even if folks in these tier II and III centres are preferring electrical two-wheelers, it should nonetheless take a while earlier than EVs can truly make a major impression on the variety of autos in comparison with the IC (inner combustion) engine manufactured autos, he added.

“So, unless the production capacity is increased, you won’t feel a large number out there,” Chakravarti stated.

SCUF provides two-wheeler, business automobile, passenger automobile, gold and residential loans.

The firm is below the method of amalgamation with Shriram group’s one other non-banking monetary entity, Shriram Transport Finance Company (STFC).

While there have been some inexperienced shoots when it comes to gross sales of two-wheelers in June, the general gross sales remains to be down, he stated, including gross sales haven’t come to the pre-pandemic ranges.

Besides, two-wheeler costs have additionally gone up by about 20 per cent within the final 12-16 months and the operating value has additionally gone up due to greater petrol costs, which is resulting in prospects suspending automobile purchases additionally, he added.

Chakravarti stated the height for electrical two-wheelers was about 50,000 per thirty days versus a mean 9-10 lakh for IC engines. So there’s a lengthy hole earlier than this might pose an actual problem to the IC engine autos, he stated.

So far in July this 12 months, the gross sales of electrical two-wheelers stood at 10,000 whereas that of IC engine autos is at 3,63,000.

“So you can see the difference in sales there. Thus, for EVs to make a significant impact, the production capacity also has to go up. If production capacity goes up, we can probably see a good demand.”

On the difficulty of electrical two-wheelers catching hearth, he stated there’s a downside as a result of the vast majority of the EV producers mainly import components and assemble the automobile right here in India.

“They import the battery etc… So quality control is a problem there because sourcing is a grey area,” he stated.