Honda Motorcycle & Scooter India set to enter electric two-wheeler segment in the next FY

Honda Motorcycle & Scooter India set to enter electric two-wheeler segment in the next FY

Competition is set to heat up in India’s electric vehicle segment with Honda Motorcycle & Scooter India (HMSI) looking at launching an electric scooter next financial year to take on former partner , Bajaj Auto, TVS Motor and SoftBank-backed Ola Electric.

HMSI, the country’s second largest two-wheeler maker, declined to specify details of the product planned for the Indian market. People in the know of its plans said the company is in the process of testing electric scooter BENLY e, developed by Japanese parent Honda Motor, at the Automotive Research Association of India.

Honda Motor had unveiled the BENLY e at the Tokyo Motor Show in 2019. But it is unclear if it would introduce this two-wheeler, which was primarily designed for commercial use, or a new EV in India. Honda Motor globally has announced plans to launch three new EVs for personal use by 2024.

HMSI president Atsushi Ogata told ET in an interview that the company has been examining the market for electric two-wheelers and that consumers will be “able to see an actual HMSI EV product within the next financial year”.

HMSI has commenced discussions with supply chain partners to maximise local content by procuring key components for the electric two-wheeler from vendors in India. The company is also considering exporting the vehicle from India to markets in the Honda Motor network to build volumes after launch.

“Why not utilise Indian local manufacturers? ‘Make in India’ is a key point for HMSI. We are a global player so why not have a global strategy from the beginning? If we were considering only the Indian market, we could produce this year,” said Ogata, who is also its chief executive

HMSI is looking at utilising the Honda Mobile Power Pack — a portable and swappable battery that stores electricity generated by renewable energy, for use as a power source for small-sized electric mobility — to address consumer concerns over range and inadequate availability of charging infrastructure in the country.

Ogata said: “One important factor is utilising Honda’s original mobile power pack technology from the beginning … the MPP battery can be used not only for scooters but also other light vehicles like e-rickshaws, (which are in) high demand in India. We are taking some time to enter mobile power pack as we need partnership for this kind of business.”

The company intends to accelerate its feasibility study and collaborate with dealers located in large cities like Bengaluru to evaluate how to create demand for this kind of battery system, after Diwali.

Honda’s former Indian partner, Hero MotoCorp, has inked an agreement with Taiwan’s Gogoro to set up a battery-swapping network, ahead of the launch of the company’s first electric two-wheeler in the fourth quarter of the ongoing fiscal year.

HMSI is considering how to utilise its distribution network and customer touch points in a manner so as not to impact dealer profitability after the launch of EVs, Ogata said. “Because if there’s no engine, it means a decrease of profitability inside the dealership. So, how to recover dealer profitability? For example, we can utilise our dealer network and touch points like battery charging stations. So, this kind of combination will be focused on deeply. Otherwise, just producing EV models would mean giving damage to our dealer network.”

The decision from HMSI to enter the EV market in India comes at a time when several mainstream players such as Hero MotoCorp, Bajaj Auto,

and startups like Ola Electric have announced aggressive plans in the segment. In the two-wheeler segment, companies such as Hero Electric and Electrotherm have been selling electric scooters in India for several years now. But sales have remained low at about 143,837 units in the last financial year, compared with 15.1 million two-wheelers powered by fossil fuels.

With battery prices coming down and central and state governments announcing incentives to encourage faster transition to e-mobility, industry stakeholders said the potential for conversion is massive in a country where 21 million two-wheelers were sold prior to the outbreak of the pandemic in FY19. Ola Electric, which recently launched two electric scooters priced at Rs 99,999-130,000 said it recorded sales of Rs 1,100 crore in a two-day sale last month.

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