E-autos gaining traction as last mile option: What will it take to make them viable?

Charging and finance, two big hurdles for E-autos

E-auto driver Nagesh
The primary challenge for Nagesh, who switched from LPG to E-auto about six weeks back, is lack of adequate fast charging points in the city and the long time it takes to service his auto. But despite these challenges his earnings have not been hit. Pic Vaidya R

Any initiative for last-mile connectivity has to be safe, reliable and cost-effective. One of the most promising ideas to come up in recent months that satisfies these requirements is electric-autos (E-autos).

Last-mile connectivity has always been an issue that all public transport entities, especially metro and bus systems, have to deal with. Bengaluru metro, for instance, with its extension to Kengeri and Anjanapura, now has a total of 51 metro stations which require last mile connectivity. An issue that will only become more widespread as the metro expands to other areas. 

Bengaluru Metro Transport Corporation (BMTC), which handles the city’s bus service, presently has 10 Traffic and Transit Management Centres (TTMC) plus important bus station hubs and junctions spread across Bengaluru. Despite this, connectivity in newer areas has always been poor.

The problem is acute in north Bengaluru around the Airport Road, and south/south-east Bengaluru in the Hosur Road-Sarjapura Road-Marathalli-Whitefield stretches, where bus connectivity declines rapidly as you move away from arterial roads like the ORR or the main highways.

Challenges for E-autos?

Unlike normal autos that run on LPG, E-autos are immune to price fluctuations of petroleum fuels. They are also much cheaper to maintain and provide a better riding experience for both drivers and passengers. There is also the green factor of them being pollution-free.


Read more: Guide to setting up Electric Vehicle Charging Stations in your community 


Also, given range anxiety, it is easier to operate E-autos covering relatively small areas from a charging hub. A metro station or TTMC would thus make a good hub point. 

There are some challenges to bring E-autos into the roads. According to Pawan Mulukutla, Director, Electric Mobility at WRI India (World Resources Institute), there needs to be more government incentives to encourage drivers to choose E-autos over LPG autos. 

More specifically, Pawan believes the following steps will go a long way in encouraging e-autos:

  1. Apart from subsidies provided by FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) from the Central Government, there are no subsidies provided by the Karnataka Government. Kerala, Delhi and Maharashtra are some states that provide purchase subsidies for EVs including three-wheelers. Karnataka, however, provides exemption from road taxes to all electric vehicles, transport and non-transport, and an effective tax rate of 4% (normally around 14% in Karnataka)
  2. Permits issued for autos need to have exclusive quotas for electric autos. For instance, the Delhi Government recently issued auto permits that were reserved only for e-autos. This quota system needs to be followed even by Metro hubs by reserving some slots around their stations exclusively for electric autos. Such hubs can also provide charging facilities solving range anxiety challenges,

Belling the finance cat

The next challenge to encourage preference for e-autos is finance. “An e-auto costs around Rs 3.5 Lakhs, around a lakh more than an LPG auto,” says Pawan. “While there are many financing mechanisms available with competitive interest rates to buy an LPG auto, the same is lacking for E-autos. Current interest rates to buy E-autos are as high as 25%. There have been efforts in places like Amritsar to partner with banks like SBI to bring the rate down to 18%.

“The high interest rates are a sign of the risk (see box) involved in lending to E-autos, and this is where government encouragement and policies can help. Until that happens, a third party like a finance company needs to absorb the risk to bring down rates”.

The risk factor

LPG autos have been around for longer and have known models of earning, longevity of vehicles, depreciation, resale value etc. But electric autos are new, and few. So it is a larger gamble for a lender about how they’ll work out, especially when consider factors like range, and lack of adequate charging infrastructure which could affect earnings and the ability to pay back the loan. More people buying and earning would reduce the risk as more data will be available.

E-auto
Representative image. Government incentives like exclusive permits, easier financing options and a strong charging network are the need of the hour not only for E-autos but electric vehicles in general. Pic courtesty IISC connect.

In Bengaluru, Three Wheels United (TWU), a Finance startup plans to do just that. “So far, we have managed to put 700 electric autos (both passenger and cargo) on the streets in Karnataka,” says Cedrick Tandong, Co-founder and CEO of TWU. “We plan to get this number up to 5000 by the end of March 2023 and to 100,000 by 2025, with a split of 75%-25% between passenger and cargo segments”.


Read more: Seven action items that could make India’s electric mobility vision a reality 


According to Cedrick, “drivers can access loans at an interest rate of between 10-11%. This loan is provided by a third party NBFC and is repayable in three to four years.”

The startup sources autos from two manufacturers, Mahindra and Piaggio. “While Piaggio autos come with swappable batteries from Sun Mobility, Mahindra’s autos do not,” adds Cedtric. “The on-road range of these E-autos is around 100 Km, while the ARAI (Automotive Research Association of India) certified range is 150 Km”. 

Sun Mobility is a startup that has installed 12 battery swapping stations around the city. Having swappable batteries helps with range anxiety as you only need to ensure you have enough range to get to the nearest swapping station. The startup plans to install around 100 battery swapping stations across the city.

“From a ride-hailing perspective, there is no difference between hiring an E-auto or an LPG one through common platforms like Uber or OLA,” says Cedtric. “There are plans to work with these platforms in the backend to bring in better deals for E-autos”.

What does it mean for drivers?

Nagesh, who lives in Nagarabhavi, switched to driving a Mahindra E-auto about six weeks back after having driven an LPG/petrol one for close to 20 years. Although he is happy with the ride quality, he has had to face a few challenges. 

“The main challenge is with charging, and I have to go home or find a charging point when I am close to running out of charge,” says Nagesh. “A full recharge takes around four hours, and I cannot afford to spend that much time idle. There are companies like Bolt which have charging stations at different points in the city, and I can charge my auto for Rs 20-30 which gives me around 30km. Faster charging points at different places in the city would be very helpful”.

Servicing the auto hasn’t been a smooth experience for him either. “It takes at least a day or more to service the auto,” says Nagesh. “The nearest service centre is in Arakere, which is a considerable distance from Nagarabhavi. More service centers around the city with quicker service is an urgent need”.

Resale value of the auto, and build quality are some of the other pain points for Nagesh.

However, so far he is happy with the trade-off as despite these challenges his earnings have not been hit. His electricity bill per month has gone up by Rs 2000, which is what he spends on fuel. With more and faster charging points, he feels he can put his vehicle on the road longer and increase his earnings.

Would he recommend going electric to his LPG colleagues? “Definitely”, says Nagesh.

Many of these challenges are likely to be addressed as E-autos gain more acceptance. Government incentives like exclusive permits, easier financing options and a strong charging network are the need of the hour. Not only for E-autos but electric vehicles in general.

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About Vaidya R 30 Articles
Vaidya is an engineer working in Bangalore and tweets at @aydiav.