The motorcycle boom: an opportunity for electric mobility suppliers

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In densely populated cities in developing regions, sales and the use of two- and three-wheeled motor vehicles have been steadily rising for over a decade, which is giving rise to serious negative impacts: noise, air pollution, road congestion, accidents... Electric motorcycles may well prove a solution to some of these problems. 

Interview with Toru Tokushige, CEO and founder of Terra Motors Corporation that develops, manufactures and retails electric two- and three-wheelers for Asian markets. With a focus on innovation, product quality and high standards of after sales service, it sells around 30,000 units annually. Total sales in 2015 amounted to $30 million (€28m).

What were the drivers behind the creation of Terra Motors?

Toru Tokushige (T.T.): There were two specific reasons. We wanted to innovate and lead the paradigm shift towards a new technology. (…) The second motivation is to provide a solution to help tackle the frighteningly high levels of air pollution in Asian cities, mainly generated by cars and motorised two- and three-wheelers.

How popular are electric two- and three-wheelers in Asian cities today? 

T.T.: In Bangladesh, there are currently around 500,000 electric three-wheelers in circulation nationwide. They are mostly used for commercial, rather than private purposes, i.e. for taxi services covering last mile journeys. Their popularity is down to cheap initial pricing, which has proved an incentive and driven up purchasing and usage. This low cost is possible because they are powered by Lead-acid batteries, which are cheaper than Lithium Ion. And while the lifetimes of the former are much shorter – around 12 months compared to 4 years – it means electric motorcycles can be more accessible pricewise.

Such a cost stimulus to buy is not the case in markets like Japan, Singapore and the US, where the use of Lithium-Ion batteries pushes up the prices of electric motorcycles to around twice that of gasoline bikes.

There is a high demand for electric tuk tuks in several cities

 

Other motivations in Bangladesh are the lower running costs of an electric two-wheeler compared to gasoline, plus the lack of efficient public transport systems. Financial incentives are another reason: taxi drivers can obtain a loan from Gambank to cover between 10 to 20% of the purchasing costs, which they can then reimburse through revenue gained from passengers. So the eco-system is in place, and indeed has been since around 2000. Note too that it wasn’t created through public policy, but evolved privately.

In India, judging from current figures, the number of electric two and three-wheelers in commercial use, as taxis, is likely to increase tenfold in the coming five years.

In Vietnam there are some 900,000 electric two-wheelers in its cities, used mainly by high school students. Previously their parents would ferry them to and from on their petrol-fuelled motorcycles and scooters. The introduction of 250W-powered electric scooters with a maximum speed of 30km/hr delivers cost savings in terms of fuel, reassures parents with regards to safety as well as freeing them up from serving as ‘unpaid taxi drivers’!

The electric tuk tuk (auto rickshaw) is a recent development by Terra Motors. How is it performing and where?

T.T.:  We launched our electric tuk tuk in 2015 and now have a factory manufacturing them in Bangladesh. We are selling them in countries like Nepal, Sri Lanka, and across southern Asia, as well as in Nigeria, Kenya, Tanzania, and South Africa. Here the market potential is driven by the lack or poor quality of public transport systems, and/or the fact that drivers can make a living out of them without putting their health on the line.

 

This is a shortened version of an article published in Public Transport Trends 2017, UITP’s flagship publication released every two years. Read the full interview – and many more – in Public Transport Trends 2017!

Purchase Public transport Trends 2017

 

 

 

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