China & India Land Viable Replacements for the Venerable Workhorse ICE Scooter


Earlier this month, India's Hero MotoCorp announced a new electric scooter, the AXL-HE20, that marks a sizable shift for the company. This isn't their first electric. The company has been shipping the electric Optima and Photon for the last year. Both the Optima and Photon share a design philosophy with Chinese scooter-maker Niu in that the designs thus far been aimed at the 50 to 100 cc segment of the market--just a notch above a potent ebike. 

The shift comes from how they will attack the bread-and-butter of the segment: The 110 cc to 150 cc gas scooter. The monster is this space is the Honda Activa 3G, which is extremely popular in India and could serve as a reasonable proxy for a "good" gas scooter on all continents. The Activa 3G scooter offers an "on-the-road" price of about US$800. The 110 cc gas engine can deliver a top speed of about 80 kph with a total range of nearly 300 km.

To date, the products from Hero and Niu are poor substitutes for the Activa. They offer a much lower top-end speed and a fraction of the range. But they do deliver much more in the area of tech. Fancier displays and cell phone connectivity are all part of the more tempting offers from the electric challengers. 

But this new announcement from Hero this month for the AXL-HE20, combined with EICMA announcement in late 2017 from Niu, mark a dramatic shift in the types of scooter we'll soon be seeing on the streets of India and China. Below is a table summarizing some key models, with green indicating shipping models and red indicating announced models. 


A few trends should be clear from the table:

First, lead acid is done in scooters. Finally. Thankfully. 

Second, the "smart" piece of the puzzle is expanding quickly. "Smart and connected" runs through the entire Niu product line. But Niu's Project X has announced a new platform running Android OS with a touch screen and will show up later this year. This moves the bar considerably over what has been accomplished to date in this segment. Project X also likely marks a big step up for Niu in terms of engineering effort if they are doing this all in-house. 


And finally, note the power levels of the new products. The Hero AXL-HE20 is promising 4 kW sustained and 6 kW peak. It appears to be a mid-mount design with forced-air cooling. Niu hasn't announced motor power yet, but given the claimed speed and range of both scooters, we should expect power north of 6 kW-8kW (maybe as high as 10KW), a mid-mount designs and water cooling. 

The Niu N-GTX will likely have 3-4 kWh of battery, and the Project X will probably be coming in around 4-5 kWh. The Hero is a bit light on the battery, but this is likely due to the price pressure in India. 

Niu's video below is a bit over-the-top, but stick with it. In the end, what they are claiming is that they can cover 50 meters in 3.92 seconds. If you run the math, this is about 0.66g average acceleration. If correct, this is significant in terms of performance. But something isn't quite right with the math here. This suggests a speed at 3.92 seconds of 92 kph. And certainly they aren't beating any of the cars shown to 100 kph. For now, assume they screwed up the math for the video. 



The price tiering from Niu remains interesting. Niu are extracting nearly a 3X premium for products they are selling in Europe versus China for what appears to be the exact same product. Part of this is because Europe is more expensive for them with the VAT, import taxes, dealers, transportation, etc. But a big part of this is probably because they can. With Europe's higher average income per capita, people are willing to pay more for the same product. 

This might potentially give a hint on Niu's profit margins too. Assuming they are making some profit on the scooters they are selling in China, they are probably making a pretty good profit on the scooters they are selling in Europe. In round numbers, a 20% VAT, 20% dealer margin, 20% import tax, $200 freight charge leave...that's leaves a fair bit for Niu on the table. It will be interesting to learn Niu's sales volume in Europe when/if they publish those numbers. 

It's likely that for the Niu products the prices in the EU will be around US$6K. If they come in below that for this much motor and battery, it'd be impressive. Domestically in China it seems US$2 to $2.5K might be a good bet. These figures would again include the battery. 

For the Hero AXL-HE20 product, the price hasn't been confirmed but several publications are estimating around US$900, presumably with battery. For a 4 kW scooter with a 6 kW peak, this will indeed deliver a zippier experience than the 110 cc Activa. Honda will likely respond with a harder push on the 150cc gas. But without the cool displays and connectivity, it's a losing battle for gas. And 2018 was the turning point.



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