Over 8X rise in the number of household consumers staying away from electric scooters due to safety and performance

April 1, 2022, New Delhi: The adoption of electric scooters in India has expanded not only to buyers in metro/tier 1 cities but also in tier 2 towns. But as several instances of electric scooters malfunctioning and catching fire came to light, consumers from across India have been raising their concerns on LocalCircles. The concerns largely focus on the safety and performance of these scooters. Concerns have been reported about multiple brands of electric scooters catching fire, which has prompted the Government to deploy a team of independent experts to probe the multiple recent incidents. Such incidents have put the spotlight on the efficiency of lithium-ion batteries fitted in electric vehicles from where the ignition started, and the question in the mind of many consumers is, “Are electric scooters safe?”

There has been a global rise in the adoption of electric vehicles (EVs) and India is no exception. For instance, in the electric two-wheelers segment, an EV manufacturer WardWizard registered a sale of 4,450 units this year in February alone. This was reportedly the highest ever sales of e-two wheelers in any month for the company. Another player, Hero Electric has over 4.5 lakh lithium-ion-based e-scooters on the roads. Autocar Professional estimates that the high-speed e-two-wheeler industry’s sales surpassed the 100,000-unit mark from January to November 2021. Further, a Credit Rating Agency, ICRA, predicts electric two-wheelers will comprise 8-10% of the market in India by 2025. The top players in the e-two wheelers segment in Indian include Hero Electric, Okinawa, Ather, Ampere, Pure EV, Ola, among others.

On the back of the surge in demand for EVs in India, the Government of India has also been supportive of the shift in the form of sanctioning funds for setting up of EV charging stations and infrastructure. Under phase II of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme, the Ministry of Heavy Industries (MHI) recently sanctioned 1,576 EV charging stations/infrastructure across 16 highways and nine expressways with a budget of INR 1,000 crore. Previously, it sanctioned 2,877 charging stations in 68 cities across 25 States/UTs. Under phase I of the scheme, 520 charging stations/infrastructure were announced. As per the guidelines issued by the Ministry of Power, there will be at least 1 charging station every 25 km on both sides of the highway and also at least 1 charging station for long-range/heavy-duty EVs every 100 km on both sides of the highway.

Given a large number of consumer concerns received, LocalCircles has conducted a survey to understand the current pulse of household consumers on buying an electric scooter, along with any concerns that are preventing them for buying one in the next 6 months. The survey received more than 11,500 responses from citizens residing in 267 districts of India. 65% respondents were men while 35% respondents were women. 53% respondents were from tier 1, 29% from tier 2 and 18% respondents were from tier 3, 4 and rural districts.

1% households have bought an electric scooter in the last 6 months and another 2% are likely to buy in the next 6 months; 21% interested but staying on sidelines due to safety, performance, infrastructure concerns

Most electric scooters are priced just above INR 1 lakh in India. Ola’s S1 Pro and Ather’s electric scooter are priced at around INR 1,30,000. The first question in the survey asked citizens, “If you or your family do not plan to buy an electric scooter in the next 6 months, what is the key reason for it?” In response, 17% of household consumers said they would “Like to buy but not convinced about safety and performance of electric scooters”. There were also 13% who would “Like to buy but do not have funds to spend on an electric scooter”. Furthermore, 4% would “Like to buy but not convinced about infrastructure available for electric scooters where I live/work”. 45% of household consumers said they “Do not drive scooters” and 11% “Have enough vehicles at home”. Only 2% of household consumers said they are “Definitely planning to buy an electric scooter in the next 6 months” while 1% have “Already bought an electric scooter in last 6 months and no plans to buy another one”. There were only 2% of household consumers who believe that “Electric scooters are a fad and will go away”. 5% cited “Other reasons”. On an aggregate basis, 21% of households are interested in electric scooters but are staying on the sidelines due to safety, performance, and infrastructure concerns. This question in the survey received 11,515 responses.

Over 8X increase in the last 6 months in the percentage of consumers concerned about safety and performance of electric scooters

In a similar survey conducted in August 2021 by LocalCircles, only 2% of households were concerned about the safety and performance of electric scooters. This percentage has increased by over 8 times in the last 6 months with 17% of Indian household consumers now losing confidence about the safety and performance of electric scooters.

In summary, only 1% of household consumers surveyed said they or their family have bought an electric scooter in the last 6 months. It can be mentioned here that a similar survey by LocalCircles released in August 2021, had 18% of households saying they plan on buying one in the next 6 months. While the percentage of people planning to buy an electric scooter has declined, many are concerned about the vehicle’s safety and performance issues. In the last 6 months, there have been over 8X increase in the percentage of consumers concerned about the safety and performance of electric scooters. One of the key asks from consumers outlined on the LocalCircles platform has been the need for a single point regulator for electric scooters, implement Indian standards for electric scooters, batteries and any other critical assemblies as well as adherence to those standards, robust testing and approval process followed by pilot rollouts. Till this is done, many consumers believe, an electric scooter should not be rolled out in the market for consumers to purchase and use.

LocalCircles will be escalating these findings with the multiple nodal ministries on the subject such that consumer pulse on electric scooters can be considered as the way forward on them is determined.