In early March, in the parking garage of a Bangalore office building, I hopped onto the back of an Ather 450, a slick electric two-wheeler with lime accents and a molded white body.

I grabbed the shoulders of the unfortunate Ather Energy staff member tasked with showing off the scooter’s acceleration, torque, and handling, all without pitching a foreign journalist onto the pavement.

The young man accelerated down the parking structure, likely nearing the 450’s promised specs of 0 to 40 kilometers (25 miles) per hour in 3.9 seconds. He spun up several more floors before looping back down to our starting level, accelerating into the final stretch, and braking a few feet short of the awaiting publicist.

“I’ll take it,” I announced.

Ather, a six-year-old Indian startup that has raised around 4.8 billion rupees ($70 million), began taking pre-orders for its scooters last summer.

It's among a handful of companies now working to expand India’s nascent electric-vehicle industry, by delivering products designed for the particular quirks of the nation’s transportation system. Two-wheelers make up nearly 80% of the traffic on India’s roads, and relatively few people own their own vehicles otherwise, getting around instead with bicycles, trains, buses, auto rickshaws, and ride-hailing services.

Producing small and public electric vehicles provides the clearest path for India to cut the emissions, air pollution, and petroleum imports associated with its fast growing automotive industry, argued a report last year by NITI Aayog, a government think tank. With the right technologies, strategies and policies, it could also present as an opportunity to build a domestic industry that could compete globally in producing the next generation of clean buses, as well as two- and three-wheelers, it added.

India’s transportation emissions are set to soar in the coming decades as the nation's expanding economy enables more than two hundred million additional people to buy vehicles. A huge portion of those first purchases will be two-wheelers, many of which could be on the roads for more than a decade, says Venkat Viswanathan, an assistant professor focused on batteries and electric vehicles at Carnegie Mellon University. So it’s crucial at this point for companies to deliver attractive electric alternatives for this emerging class of vehicle owners, he says.

Money and policy

As it stands, the electric-vehicle market in India is tiny, measured in the low thousands annually for new cars and the mid tens of thousands for two-wheelers. That represents barely a ripple in a nation of 1.3 billion people and more than 200 million registered vehicles.

But momentum has begun to build, at least behind electric-scooters sales, which more than doubled last year—driven, in part, by evolving federal efforts. In 2017, the government announced that all new vehicles would need to be electric by 2030. It subsequently stepped that back to 30%, amid criticism from the auto industry, but that was enough to get the industry thinking about EV strategies.

“The government has been pushing this in a big way,” says Tarun Mehta, chief executive of Ather. “So suppliers have gotten the memo that electrification is going to happen, and nobody wants to miss out.”

A number of companies have begun manufacturing electric cars, two-wheelers, or rickshaws for the Indian market or announced plans to do so, including China’s BYD, South Korea’s Hyundai, Japan’s Suzuki, and domestic automakers Ashok Leyland, Mahindra & Mahindra, and Tata Motors. Additional electric two-wheelers startups have also emerged, including Okinawa Scooters, 22Motors, and Orxa Energies.

Crucially, the government more recently backed its targets with substantial funds and stricter policies. In early March, officials announced plans to provide nearly $1.5 billion in subsidies for purchases of EVs and hybrids with advanced batteries (lithium-ion, not lead-acid), weighted toward public buses, three-wheeled vehicles for hire, and personal two-wheelers.

The initiative, which also earmarks funds for public charging infrastructure, doesn’t apply to higher-end cars.

Ather Energy

Pay as you go

In the parking lot behind Sun Mobility’s headquarters in eastern Bangalore, on the edge of city’s sprawling technology district, a driver pulls an orange-and-black rickshaw up to the company’s “quick interchange station,” a squat stand of lithium-ion battery lockers.

After he swipes a key fob with loaded credits, a little black door pops open, allowing him to pull out a fresh battery with a green handle and return a nearly empty one. The man inserts the new battery into the open slot under his seat, repeats the process for his second battery, and pulls off in a fully charged rickshaw, all in less than two minutes.

Sun Mobility was cofounded in 2017 by Chetan Maini, a pioneer of electric vehicles in India. In 1994, he formed Reva Electric Car Company, which Mahindra & Mahindra ultimately acquired nine years ago.

But his early experience in the industry convinced him that the US model of selling high-priced electric sedans is not the way to kick-start the EV market in India, given the price sensitivity of average Indian consumers—and the premium on lithium-ion-powered vehicles in the nation. A standard battery pack could easily double the cost of an auto rickshaw, he says.