Two-Wheelers in India and Vietnam - Clean Air Initiative

ELectrictwo-wheelers inindia and vietnamMarket Analysis and Environmental Impacts

Electric Two-Wheelersin India and Viet NamMarket Analysis and Environmental Impacts

ContentsAbbreviationsivAcknowledgmentsvExecutive SummaryviIntroduction 1Background 2Ahmedabad, India 2Ha Noi, Viet Nam 3Market Analysis 4Choice Experiment Survey Design 4Attributes and Levels 4Choice Sets 6Sampling 6Vehicle Choice and Respondent Preferences 11Market Estimation Results 11Ha Noi, Viet Nam 11Willingness to Pay Estimates and Tax Effects 16Market Share Predictions 19Ahmedabad, India 22Willingness to Pay Estimates 24Market Share Predictions 24Environmental Impacts 28Impact Estimation Methodology 29Emission Rates of Electric Scooters in India and Viet Nam 30Environmental Impacts of Electric Scooter Adoption 31Lead Pollution 35Conclusions 37Instruments to Improve Electric Scooter Adoption 37Role of Policy Makers 38Role of Industry 38Joint Role 39Final Remarks 39Appendixes 40Logit Modeling Formulation 40Electric Vehicle Emission Rate Estimation 41Market Analysis 42

e a positive way to influence adoption. In Ahmedabad, electric two-wheelers suffer greater disfavor,with poor early experiences with the new technology tarnishing its reputation among users. Undercurrent market scenarios, only about 6% of the near future market is expected to shift towardelectric two-wheelers. Even with improved performance and price and increases in gas prices, only14%–23% of the market can be expected to shift toward electric two-wheelers. Respondents inAhmedabad were not sensitive to differential tax policy.Coupling the market analysis with environmental emission rates, several technology and policyscenarios were developed. In Ha Noi, electric two-wheeler adoption could reduce average CO 2emissions from all two-wheelers by 16%–21% depending on how aggressive supportive policy andtechnology improvements were. In addition, other primary pollutants show greater impacts fromelectric two-wheeler adoption, with reductions ranging from 33% to 42% in two-wheeler fleetemissions, depending on technology and policy support. In Ahmedabad, CO 2 emission reductionsare more modest, with nearly undetectable reductions in emissions (up to 5%) under the leastaggressivescenario, and up to 11% reductions in CO 2 and 23% reductions in other primary localpollutants under more aggressive scenarios.vii❚❚❚ Executive SummaryElectric two-wheelers have the potential to improve local air quality and greenhouse gas emissionscompared to gasoline two-wheelers. They can also reduce noise pollution to the extent that they cancompete in the market against gasoline two-wheelers. There are some fundamental performanceissues that put them at a disadvantage, including speed, range, and recharging time. Their operatingcosts can be significantly lower, however, thus counteracting some of the performance issues. Earlydeployments in both Viet Nam and India have been somewhat unsuccessful due to unreliable vehiclesand have created problems with the perception of this unproven technology. A strong preference forgasoline two-wheelers, regardless of price and performance, indicates that the electric two-wheelerindustry and government and nongovernment organizations should engage in active marketingand public awareness, aside from developing supportive electric two-wheeler policy. In addition,supportive electric two-wheeler policy should be coupled with a robust battery manufacture andrecycling policy that would support all transportation. Electric two-wheelers can provide low-cost,low-noise, and low-emission vehicles, but are currently competing in a difficult market against amore mature, but less environmentally friendly mode—gasoline two-wheelers. Working with theelectric two-wheeler industry to improve their image, improve performance, and provide supportivepolicy could be the impetus to begin wide-scale adoption of electric two-wheelers in these largemarkets.

IntroductionElectric bike (e-bike) use has rapidlyexpanded in the People’s Republic ofChina (PRC), in the process changing themode split of many cities. Currently, the PRCproduces over 20 million e-bikes yearly, up froma few thousand a decade ago. 1 E-bikes in thePRC are defined as electric two-wheelers withrelatively low speeds and weights compared toa motorcycle. Both bicycle-style e-bikes (withfunctioning pedals) and scooter-style e-bikes(with many of the features of gasoline scooters)are classified as bicycles and are given access tobicycle infrastructure.E-bikes have risen in popularity in the PRC dueto restriction of gasoline motorcycles, extensivebicycle infrastructure, and increased car andpublic transit congestion. However, the rise ine-bikes in the PRC has not spread to the rest ofAsia. In fact, few cities in other Asian countrieshave any presence of e-bikes. In countries withdominant gasoline two-wheeler mode split,replacing those vehicles with electric twowheelerscould improve air quality and reducegreenhouse gases.influence the adoption of electric scooters(e-scooters) in these countries. It also focuseson the tailpipe emission reductions that couldoccur if e-scooters were adopted. It is importantto note that the study investigates the potentialand relative benefits of substituting electric twowheelers(e-scooters) for gasoline two-wheelers.This report does not investigate the potentialshift to other modes, such as cars, mass transit,or nonmotorized transport, nor their impacts. It isexpected that a shift from gasoline two-wheelerto e-scooter would result in environmental shifts,but that safety and mobility costs and benefitswould not change much.Figure 1: Typical Electric ScooterThis study focuses on market potential inAhmedabad, India, and Ha Noi, Viet Nam.From these cities, the study estimates price,performance, and regulatory factors that canSource: Authors.1Jamerson, F.E., and E. Benjamin. 2007. Electric Bikes Worldwide Reports—20,000,000 Light Electric Vehiclesin 2007. http://ebwr.com/index.php

2❚❚❚ Electric Two-Wheelers in India and Viet NamBackgroundE-scooters are two-wheeled motorized vehiclesthat are similar to gasoline-powered scootersand motorcycles, except that they operate solelyon battery power (Figure 1). As an alternative tothe gasoline-powered scooter and motorcycle,the e-scooter offers efficiency gains and, as theyhave zero local tailpipe emissions and are virtuallysilent, air and noise pollution reductions.E-scooters have become popular in the PRC, butbecause of regulations, their design has beenlimited to low-power (less than 500 watts [W]),light-weight (less than 60 kilograms [kg]), and lowspeedmodels (less than 40 kilometers per hour[km/h]). These scooters do not provide thenecessary performance to compete againstgasoline scooters and motorcycles in othercountries. Most Chinese e-bike producers do nothave an incentive to develop larger models solelyfor the export market, given the strong domesticmarket for smaller models. Given this, existinge-scooters are generally unsuitable for themarkets outside of the PRC. Some companiesoutside of the PRC are developing larger scalee-scooters that can compete against smalldisplacement (

Ha Noi, Viet NamIn Viet Nam, private transport is dominated bygas-powered motorcycles. In 2005, there were1.5 million registered motorcycles in Viet Nam’scapital of Ha Noi for a population of 3 millionpeople, with motorcycles comprising 65% of allvehicular trips. 6 Motorcycle ownership in Ha Noiand throughout Viet Nam continues to grow atan average annual rate of more than 14%. 7At the same time, motorcycles are the maincontributor to Ha Noi’s air quality issues, wherelevels of particulate matter exceed the nationalambient air quality standards. Of all known localemissions of particulate matter, 40% originatefrom vehicular sources, and motorcycles havethe largest share of vehicle emissions, emitting43% of particulate matter and more than 54%of carbon monoxide (CO) and hydrocarbons. 8 Inaddition, motorcycles are the primary source ofHa Noi’s urban noise pollution.The prevalence of motorcycle use and the relatedenvironmental issues would make Ha Noi seem,like many cities in the PRC, a market primedfor e-scooters. In Viet Nam, however, thetransition from motorcycles to e-scooters hasbeen the very opposite of that in the PRC, withe-scooters failing to make market penetration.In interviews conducted in Ha Noi, Vietnamesemotorcycle riders conveyed a number of reasonsthat potentially explain why Viet Nam has not yetadopted e-scooters, including their inferior speedand range, but also the perceived greater comfortand style that is offered by a motorcycle. In thePRC, regulations against motorcycles are extensiveand exclusive bicycle infrastructure make e-bikesand e-scooters particularly attractive. 9Despite Vietnamese riders’ negative perceptionof them, e-scooters offer a potential solutionto Ha Noi’s air and noise pollution if adoptedas a motorcycle alternative. Thus, it is valuableto explore what limits this adoption, and tounderstand the ability of technology andincentives such as sales tax breaks to overcomethese impediments. Optimally, this investigationwould be accomplished by observing theactual purchasing decisions and trade-offs ofVietnamese riders between e-scooters andmotorcycles, but the nature of the problem inAhmedabad and Ha Noi precludes the use of realpurchasing data and instead requires the use ofhypothetical choice data.3❚❚❚ Introduction6World Bank. 2006. Vietnam–Hanoi Urban Transport Development Project. World Bank report numberAB2656 2006/11/22.7Tuan, V.A., and T. Shimizu. 2005. Modeling of Household Motorcycle Ownership Behavior in Hanoi City.Journal of Eastern Asia Society of Transportation Studies 6; Meszler (2007).8Schipper, L., et al. 2008. Measuring the Invisible Quantifying Emissions Reductions from Transport Solutions:Hanoi Case Study. EMBARQ–World Resources Institute; World Bank. 2008. Attacking Air Pollution in Hanoi.http://go.worldbank.org/9DFE1YV5409Cherry, C., et al. 2009. Electric Bikes in the People’s Republic of China (PRC): Impact on the Environment andProspects for Growth. Asian Development Bank: Manila.

Market AnalysisThis study attempts to identify future marketgrowth and potential for a new productwith a significant amount of uncertaintyrelated to energy prices and regulation ofcompeting modes. A common method to analyzenew product penetration is to conduct a statedpreferencechoice experiment.Choice Experiment Survey DesignThe choice experiment was designed to measurethe effects of performance, cost, and policy variableattributes on the Vietnamese and Indianrider’s decision to purchase an e-scooter over agasoline motorcycle or scooter. In each decisionquestion, buyers of two-wheeled motorized vehiclesin Ha Noi and Ahmedabad were presentedwith three hypothetical vehicles. In Ha Noi, thechoice set included a standard gasoline motorcycle,a large gasoline motorcycle, and an e-scooter. InAhmedabad, the choice set included a standardgasoline motorcycle, a standard gasoline scooter,and an e-scooter. A standard gasoline scooterwas included in Ahmedabad because of theirrelative popularity in India, whereas Ha Noi hadvery few scooters in the two-wheeler market.The three hypothetical vehicles varied in terms oftheir attributes, and respondents were instructedto indicate the vehicle they would most prefer topurchase, based solely on the attributes providedfor each alternative.Attributes and LevelsThe number of attributes that can be testedin a choice experiment is limited by the abilityof respondents to choose between complexalternatives. To minimize the cognitive burdenon subjects in Ha Noi, alternatives varied alonga limit of nine attributes. This meant that not allimportant choice attributes could be includedin the experiment. In an attempt to control forthe omission of relevant variables, subjects wereinstructed to assume that all unlisted attributeswere the same for all of the hypothetical vehicles.In Ahmedabad, alternatives varied among11 attributes, adding two attributes deemedimportant to India’s population, but perhaps lessimportant in Viet Nam’s case.The attributes included in the choice experimentwere those deemed most critical based on theresults of previous stated-preference studies foralternative vehicles and based on interviews withVietnamese and Indian riders. 10 The entire set of10Hensher, D.A. 1982. Functional Measurement, Individual Preference and Discrete-Choice Modeling: Theoryand Application. Journal of Economic Psychology. 2(4). pp. 323–335; Calfee, J. 1985. Estimating the Demandfor Electric Automobiles Using Fully Disaggregated Probabilistic Choice Analysis. Transportation Research PartB. 19(4). pp. 287–301; Bunch, D.S., et al. 1993. Demand for Clean-Fuel Vehicles in California: A Discrete-Choice Stated Preference Pilot Project. Transportation Research Part A. 27(3). pp. 237–253; Ewing, G., and

experimental attributes includes the followingpoints:(i) Purchase price: price of vehicle notincluding registration tax, sales tax, orvalue-added tax (VAT);(ii) Refuel or recharge range: the numberof kilometers that can be traveled on afull tank of gas or a full charge beforeneeding to refuel or recharge;(iii) Refuel or recharge time: the amount oftime in minutes required to fill an emptygas tank or to recharge a battery fromzero charge to full charge;(iv) Fuel or electricity cost: operating coststated in terms of Vietnamese dong per100 kilometers (D/100 km) in Ha Noiand rupees per kilometer (Rs/km) inAhmedabad;(v) Maintenance cost: routine costs ofmaintenance such as battery replacement,measured as dong per month(D/month) in Ha Noi and Rs per 15,000km in Ahmedabad;(vi) Acceleration: measured relative to thestandard motorcycle as a percentage,where the acceleration of the standardmotorcycle is 0–40 km in 10 seconds inHa Noi (In Ahmedabad, it is expressed astime to reach 30 km/h);(vii) Top speed: fastest achievable speed inkilometers per hour;(viii) License requirement: whether a license isrequired to operate the vehicle;(ix) Sales and registration tax: combinedsales and registration tax (independentof purchase price) expressed in millionsof dong and owed upon purchase (InAhmedabad, it is the VAT, expressedin Rs.);(x) Transmission: manual or automatictransmission (not included in Ha Noibecause most motorcycles have manualtransmissions);(xi) Carrying capacity, expressed in number ofadults, which was explicitly included in thechoice experiment in Ahmedabad sincetwo-wheelers were considered importantbased on conversations with local experts.Accurate values for the vehicle attribute levelswere determined with the aid of transportengineers specializing in the study of motorcyclesand e-scooters. The vehicle attribute levels wereselected to reflect technology both current andin the foreseeable future. In particular, the rangesfor the e-scooter attributes were constructedto contain values for the “average” e-scootertoday, but also to contain plausible values forcutting-edge e-scooters that may emerge in thenext few years; this allows for a better analysis ofhow technological developments may influencee-scooter demand.5 5❚❚❚ Market AnalysisSarigollu, E. 2000. Assessing Consumer Preference for Clean-Fuel Vehicles: A Discrete Choice Experiment.Journal of Public Policy and Marketing. 19. pp. 106–118; Brownstone, D., and K. Train. 1999. ForecastingNew Product Penetration with Flexible Substitution Patterns. Journal of Econometrics. 89. pp. 109–129;Chiu, Y.C., and G.H. Tzeng. 1999. Transportation Research Part D. 4 (2). pp. 127–146; Ewing, G., andE. Sarigollu. 1998. Car Fuel-Type Choice Under Travel Demand Management and Economic Incentives. TransportationResearch Part D. 3. pp. 429–444; Dagsvik, J. et al. 2002. Potential Demand for Alternative Fuel Vehicles.Transportation Research Part B. 36. pp. 361–384; Potoglou, D., and P. Kanaroglou. 2007. HouseholdDemand and Willingness to Pay for Clean Vehicles. Transportation Research Part D. 12. pp. 264–274.

6❚❚❚ Electric Two-Wheelers in India and Viet NamThe tax incentive attribute levels were chosento vary around the status quo for a standardmotorcycle, with zero tax as a lower bound.The nonzero value for the sales and registrationtax was set to approximate 10% of the currentpurchase price for a standard motorcycle,10% being close to the actual current value ofcombined sales and registration taxes. For theVAT, the nonzero value was set to approximate20% of the current purchase price, representingan upper bound for tax incentive policies.For most of the vehicle attributes, three levelswere sufficient to cover the range of values. InHa Noi, refuel or recharge time was assignedfour levels to cover the range of recharge timesfor an e-scooter, which spans from 10 minutesto 6 hours. In Ahmedabad, refuel or rechargetime was assigned three levels. Whether ornot a license requirement exists for a particularvehicle was indicated as an important decisiondeterminant in interviews with Vietnameseriders. Thus, a license requirement attributewas included in two levels: “Yes”, a license isrequired; or “No”, a license is not required. Thestandard motorcycle was taken to be the basecase vehicle, and, as such, most of its attributeswere set as constants, with the exception of salesand registration tax, which was allowed to varyto assess standard motorcycle tax policy. Someof the vehicle attributes for the large motorcyclewere also fixed at constants in instances whendoing so was intuitive. For example, the licenserequirement for a large motorcycle was fixedat “Yes,” because current law requires anoperating license, and there is no possibility in theforeseeable future of this licensing requirementbeing repealed. All attributes and their levels arepresented in Table 1.Choice SetsEach choice set consisted of one of each vehicletype, with the attribute values of the alternativesset at particular levels. Varying the combinationsof attribute levels generates different choicesets. In both cases, the full factorial design thatincludes all possible combinations of attributeswould require billions of choice sets. To reducethe number of potential scenarios, a fractionalfactorial design was used to generate anorthogonal main-effects matrix consisting of72 choice sets. This design allowed the maineffect of each attribute level to be estimatedwithout confounding.The 72 choice sets were blocked into 12 sectionsof 6, and each respondent was presentedwith one of these blocks (answered 6 choicequestions). The first respondent would face thefirst 6 choice sets; the second respondent wouldface the next 6 choice sets, and so forth; afterthe 12th respondent, the list of choice sets wouldrecycle, with the 13th respondent facing the first6 choice sets. Figure 2 presents an example of achoice question from the Ha Noi survey. Figure 3presents an example of a choice question fromthe Ahmedabad survey.SamplingIn both cases, future two-wheeler purchaserswere targeted. In Ha Noi, this included almostevery household as motorized two-wheelerownership is over one vehicle per householdon average and over 84% of households ownat least one motorbike. 11 This is confirmed by80% of the households surveyed, which statedthat they are likely to purchase a motorized11Schipper et al. 2008.

two-wheeler in the next 5 years. In Ha Noi, ahousehold survey was conducted, stratified bypopulation. Table 2 shows the stratification bydistrict, with a total of 400 households surveyed.Table 3 shows the basic demographics of thesample.Unfortunately, surveys for stratifying by householdwere logistically difficult in Ahmedabad. Instead,a stratified intercept approach was undertaken,sampling individuals at major trip generators indifferent sectors of the city. Figure 4 shows thesectors of the city, coupled with the populationin those sectors. Different sections of Ahmedabadwere sampled according to the populationdistribution, with a total sample size of 1,009respondents.Table 4 shows the sample characteristics ofthe Ahmedabad survey. Most striking is thedisproportionate number of males surveyed,which is primarily explained by the culturalbarriers of the predominately male survey team,coupled with the intercept sampling approach. In7 7❚❚❚ Market AnalysisTable 1: Experimental Attributes and LevelsAttributes(Ha Noi Underlined,Ahmedabad in Italics)Standard MotorcycleMotorcycleLarge MotorcycleMotor ScooterElectric ScooterElectric ScooterPurchase price(D million)1010, 15, 308, 12, 164(Rs)Refuel/Recharge range(km)Refuel/Recharge time(min)Fuel/Electricity cost(D/100 km)(Rs/km)Maintenance cost(D/month)(Rs/15,000 km)AccelerationXX% different fromstandard motorcycle38,400; 58,700;79,000100560, 730, 9005530,0000.7, 1.08, 1.4532,000; 39,500;47,000200225, 500, 77510520,000; 30,000;40,0000.87, 1.10, 1.3315,000; 27,750;40,50060, 120, 20045, 130, 21510, 15, 30, 36010, 240, 4202,500; 5,000; 7,5000.02, 0.06, 0.11204,500204,50070, 100, 1406,800; 7,750; 8,70020% slower than 20% slower than0–40 km in 10 sec standard, same as standard, same asstandard, 20% faster standard, 20% fasterthan standardthan standard0–30 km/h in XX sec2, 4, 62.5, 5, 7.53, 6, 9Top speed (km/h) 8060, 80, 10040, 50, 6065, 95, 12560, 80, 10030, 45, 60License Required Yes Yes Yes, NoSales and registration tax(D million)(Rs)Transmission(Ahmedabad only)Carrying capacity(Ahmedabad only)0, 1.4, 2.80; 4,750; 9,5000, 1.4, 2.80; 3,600; 7,2000, 1.4, 2.80; 1,600; 3,200Manual Manual, Automatic Automatic2 adults, 3 adults 2 adults 1 adult, 2 adultsD = dong, km = kilometer, km/h = kilometer per hour, min = minute, Rs = rupee, Rs/km = rupees per kilometer.Source: Authors.

Figure 2: Sample Choice Question (Ha Noi)8❚❚❚ Electric Two-Wheelers in India and Viet NamSuppose the following three options are the only available alternatives for purchasing atwo-wheeled motorized vehicle. Please indicate which vehicle you prefer by checking oneof the boxes below.Standard GasMotorcyleLarge GasMotorcycleElectricScooterPurchase price (D million) 10 15 8Refuel range (km) 100 200 120Refuel/recharge time (min) 5 10 30Fuel/Electricity cost (D/100 km) 30,000 30,000 5,000Maintenance cost (D/month) 20,000 20,000 100,000Acceleration0–40 km/h in10 seconds20% faster than“standard motorcycle”Same as “standardmotorcycle”Top speed (km/h) 80 80 50License required Yes Yes YesSales/Registration tax (Dmillion)2.8 1.4 1.4D = dong, D/100 km = dong per 100 kilometers, D/month = dong per month, km = kilometer, km/h = kilometer per hour,min = minute.Source: Authors.Figure 3: Sample Choice Question (Ahmedabad)Suppose the following three options are the only available alternatives for purchasing atwo-wheeled motorized vehicle. Please indicate which vehicle you prefer by checking oneof the boxes below.GasolineMotorcycleGasolineScooterElectricScooterPurchase price (Rs) 58,700 32,000 27,750Refuel range (km) 560 500 130Refuel/Recharge time (min) 5 5 240Fuel/Electricity cost (Rs/km) 1.45 1.10 0.06Maintenance cost4,500 4,500 7,750(Rs/15,000 km)Acceleration0–30 km/h in4 seconds0–30 km/h in5 seconds0–30 km/h in6 secondsTop speed (km/h) 95 80 40Carrying capacity (adults) 2 2 1Transmission Manual Manual AutomaticLicense required Yes Yes NoSales/Registration tax (Rs) 4,750 7,200 0km = kilometer; km/h = kilometer per hour; min = minute; Rs = rupee; Rs/15,000 km = rupees per 15,000 kilometers;Rs/km = rupees per kilometer.Source: Authors.

Table 2: Population and Target Sample per District(Ha Noi)District NamePopulation(1,000persons)SampleSizeDistrictNamePopulation(1,000persons)SamplesizeUrban core and urban fringe districtsSuburban and rural districtsBa Dinh 231 30 Tu Liem 262 25Hoan Kiem 179 25 Thanh Tri 165 20Hai Ba Trung 312 40 Soc Son 266 10Dong Da 372 45 Dong Anh 288 10Tay Ho 108 15 Gia Lam 212 30Thanh Xuan 196 40Cau Giay 171 40Hoang Mai 236 30Long Bien 186 40Total 1,991 305 Total 1,193 959 9❚❚❚ Market AnalysisSource: Nguyen, Q. 2007. Integration of Transport and Land Use in Hanoi: Can We Relieve Traffic Congestion by RelocatingSome Major Land-Uses? Master’s thesis. International Institute for Geo-information Science and Earth Observation. Enschede,The Netherlands.Table 3: Sample Characteristics(Ha Noi)Gender Female 46%Male 54%Mean age of41.3household headNumber of vehicles Cars 0.15in average householdMotorcycles 1.91Bicycles 0.93E-scooters 0.09Household income Less than 3 17%(D million/month) (%)3–6 40%6–9 24%9–20 16%More than 20 3%Purchase motorized Definitely 39%2-wheeler in next5 yearsVery likely 18%Likely 24%Unlikely 14%No chance 6%D = dong, e-scooter = electric scooter.Source: Authors.

10Figure 4: Geographic Sampling Scheme(Ahmedabad)❚❚❚ Electric Two-Wheelers in India and Viet NamSource: Authors.Table 4: Sample Characteristics (Ahmedabad)GenderMean age ofrespondentNumber of vehicles inaverage householdHousehold income(Rs/month)Purchase motorized2-wheeler in next 5yearsFemaleMale2%98%39.6Cars 0.11Bicycles 0.31Motorcycles 1.02E-scooters 0.01Motor scooters 0.52Less than0%2,5002,501–7,500 3%7,501–15,000 41%15,001–30,000 44%30,000 or11%moreDefinitely 17%Very likely 16%Likely 59%Unlikely 2%No chance 6%e-scooter = electric scooter, Rs = rupee.Note: Values in parentheses are average preference scores.Source: Authors.

Ahmedabad, 94% of the respondents stated thatthey were likely or more than likely to purchasea two-wheeler in the next 5 years, indicating astrong future two-wheeler market.Vehicle Choice and RespondentPreferencesIn the choice experiment, a limited numberof vehicle-specific parameters were includedto determine the effects of varying vehicleattributes on vehicle choice, and to ultimatelycalibrate choice models that estimate marketshares. However, several factors could not beincluded for the sake of model efficiency andvariable type. In the questionnaire portion ofthe survey (outside the context of the choiceexperiment), respondents were asked a seriesof Likert Scale questions, rating the importanceof various vehicle parameters from 1 to 5,with 1 being not important and 5 being veryimportant. These factors could explain someof the unobserved preference that is capturedin the model’s alternative specific constants(see Market Estimation Results section) whererespondents subconsciously prefer vehiclesbased on perceptions that are not easily testedin traditional choice modeling frameworks.Figures 5–13 show the results of these questionsin both Ahmedabad and Ha Noi, expressed asa frequency of responses separated by vehiclechoice. If a respondent chose a particular typeof vehicle, the choice would be categorizedwith his or her rating to develop these figures.Ha Noi respondents were not asked to ratehelmet requirements or availability of rechargingor refueling infrastructure. In addition to each ofthe charts, a preference score is applied to eachof the factors, by city and vehicle choice. Thisscore is calculated by assigning a weight of 1 to“not important” up to 5 for “very important”and assumes that the strength of preference islinear from 1 to 5. The scores are weighted bythe proportion of the responses and allow directcomparison between values of respondents whochose different modes. For instance, in Figure 5, anAhmedabad respondent who chose an e-scooterin the choice experiment (preference score 3.49)values “style” less than a respondent who chosea gasoline motorcycle (preference score 3.49).The factors that vary most between modes inthe same city are style, cargo-carrying capacity,and replacement part availability, with e-scooterchoosers valuing style and cargo-carryingcapacity less than their counterparts, and valuingreplacement part availability more. Interestingly,there were no significant differences betweenvehicle choosers on many of the metrics,including environmental performance, safety,and reliability of the vehicle.Market Estimation ResultsHa Noi, Viet NamThe model is estimated with sampling weightsfor the 14 strata, and reports robust standarderrors. The explanatory variables in the modelinclude alternative-specific constants and theexperimental attributes. The alternative-specificconstants, labeled “standard motorcycle” and“large motorcycle,” capture the influence ofthe type of vehicle on the choice decision,independent of the other explanatory factors. Theomitted alternative-specific variable “e-scooter”was selected as the reference alternative, andthus the coefficients for “standard motorcycle”and “large motorcycle” are interpreted relativeto the e-scooter alternative. Acceleration andlicense requirement were treated as categorical,11 11❚❚❚ Market Analysis

10090807060% 50403020100Figure 7: How Do You Rate Safety in Vehicle Purchase Choice?1 2 3 4 5Ahmedabad: Motorcycle (2.91)Ahmedabad: Gas scooter (2.88)Ahmedabad: Electric scooter (3.10)Ha Noi: Standard motorcycle (3.79)Ha Noi: Large motorcycle (3.80)Ha Noi: Electric scooter (3.79)13 13❚❚❚ Market AnalysisSafety (1 = not important, 5 = very important)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.Figure 8: How Do You Rate Comfort in Vehicle Purchase Choice?70605040%30201001 2 3 4 5Ahmedabad: Motorcycle (3.10)Ahmedabad: Gas scooter (2.90)Ahmedabad: Electric scooter (2.88)Ha Noi: Standard motorcycle (3.38)Ha Noi: Large motorcycle (3.35)Ha Noi: Electric scooter (3.40)Comfort (1 = not important, 5 = very important)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.

144540Figure 9: How Do You Rate Cargo-Carrying Capacity in Vehicle Purchase Choice?35❚❚❚ Electric Two-Wheelers in India and Viet Nam3025%201510501 2 3 4 5Ahmedabad: Motorcycle (2.30)Ahmedabad: Gas scooter (2.07)Ahmedabad: Electric scooter (1.75)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.Ha Noi: Standard motorcycle (2.44)Ha Noi: Large motorcycle (2.74)Ha Noi: Electric scooter (2.57)Cargo Carrying Capacity (1 = not important, 5 = very important)Figure 10: How Do You Rate Replacement Parts Availability in Vehicle Purchase Choice?605040% 30201001 2 3 4 5Ahmedabad: Motorcycle (2.91)Ha Noi: Standard motorcycle (3.10)Ahmedabad: Gas scooter (2.88)Ha Noi: Large motorcycle (3.10)Ahmedabad: Electric scooter (3.10) Ha Noi: Electric scooter (3.24)Replacement Parts Availability (1 = not important, 5 = very important)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.

Figure 11: How Do You Rate Reliability in Vehicle Purchase Choice?908015 15706050%40302010❚❚❚ Market Analysis01 2 3 4 5Ahmedabad: Motorcycle (3.03)Ahmedabad: Gas scooter (2.94)Ahmedabad: Electric scooter (3.06)Reliability (1 = not important, 5 = very important)Ha Noi: Standard motorcycle (3.61)Ha Noi: Large motorcycle (3.67)Ha Noi: Electric scooter (3.66)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.35Figure 12: How Do You Rate Recharging and Refueling Infrastructurein Vehicle Purchase Choice?302520%1510501 2 3 4 5Ahmedabad: Motorcycle (2.02)Ahmedabad: Gas scooter (1.99)Ahmedabad: Electric scooter (1.85)Recharge/Refueling Infrastructure (1 = not important, 5 = very important)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.

16Figure 13: How Do You Rate Helmet Requirements in Vehicle Purchase Choice?4035❚❚❚ Electric Two-Wheelers in India and Viet Nam3025% 201510501 2 3 4 5Ahmedabad: Motorcycle (2.39)Ahmedabad: Gas scooter (2.29)Ahmedabad: Electric scooter (2.16)Helmet Requirements (1 = not important, 5 = very important)e-scooter = electric scooter.Note: Values in parentheses are average preference scores.Source: Authors.and effects codes were generated for thesevariables.Given that previous research found gender toinfluence preferences over motorbikes and e-scooters, three gender-attribute interactionvariables were created: range x male; top speed xmale; and price x male. 12 These variables capturethe joint effects of being male combined withrefuel or recharge range, top speed, and price,and were included as explanatory variablesalong with the alternative-specific constants andexperimental attributes. The model estimates areshown in Table 5.All experimental attributes have the anticipatedsigns, and all are at least significant at the 95%level. Purchase price, refueling or rechargingtime, fuel or electricity cost, maintenance cost,slower acceleration, license requirement, andtax all had negative effects on choice, whilerange, faster acceleration, and top speedhad positive effects. The coefficients for thealternative-specific constants are both positive,while only the standard motorcycle alternativespecificconstant is significant (p = 0.04), whichindicates that after taking all other explanatoryfactors into account, respondents demonstrate apreference for a standard motorcycle relative toan e-scooter. The result that respondents prefermotorbikes to e-scooters, all else being equal, ismost likely attributable to omitted factors thatare associated with vehicle type, e.g., style,comfort, luggage space, safety, reliability, easeof finding replacement parts, and environmental12Chiu and Tzeng 1999.

Table 5: Parameter Estimates of the Conditional Logit Model(Ha Noi)Variable Coefficient Standard Error p-valuePurchase price (D million) (0.0928811) 0.0099441 0Refuel or recharge range (km) 0.004173 0.0010179 0Refuel or recharge time (min) (0.0007025) 0.0003317 0.034Fuel or electricity cost (D/100 km) (0.0000155) 0.00000594 0.009Maintenance cost (D/month) (0.00000384) 0.00000167 0.02120% faster acceleration a 0.119782 0.0467819 0.0120% slower acceleration a (0.0978936) 0.0474261 0.039Top speed (km/h) 0.006553 0.0022026 0.003License required (0.0937764) 0.0482465 0.052Sales and registration tax (D) (0.1496249) 0.0241181 0Top speed x male 0.004764 0.0022562 0.035Range x male (0.002061) 0.0010027 0.04Price x male 0.0286288 0.0124639 0.022Standard motorcycle 0.4413562 0.215009 0.04Large motorcycle 0.0886192 0.2193426 0.686N Obs 7,140Log-likelihood (0) (2403.7281)Log-likelihood (2371.7839)Wald chi-square 223.29 017 17❚❚❚ Market Analysis( ) = negative, D = dong, D/100 km = dong per 100 kilometers, D/month = dong per month, km = kilometer, km/h = kilometerper hour, min = minute, N Obs = number of observations, sec = second.aRelative to standard motorcycle: 0–40 km in 10 sec.Source: Authors.friendliness; however, it may also be the casethat, even controlling for omitted factors,Vietnamese riders have a bias against e-scootersdue to perceived poor quality or performance.An examination of the gender-attribute interactionsreveals that, as found in previous research,gender is an important decision determinant fore-scooters and motorbikes. 13 All three genderattributeinteraction variables are at least significantat the 0.05 level. The parameter for “rangex male” is negative, meaning that, relative tofemales, males show a lower preference forbeing able to travel an extended range beforeneeding to refuel or recharge. “Top speed x male”is positive, which indicates that males demonstrategreater preference than females for a highvehicle speed. “Price x male” is positive as well;the interpretation is that higher purchase priceshave less of a dissuasive effect on males than13Chiu and Tzeng 1999.

18❚❚❚ Electric Two-Wheelers in India and Viet Namthey do on females (the male-demand curve ismore inelastic). This gender-specific informationis particularly valuable for e-scooter manufacturers,as it indicates that a worthwhile marketingstrategy may be to produce lines of e-scootersgeared to each gender. For example, relative toa female-line of e-scooters, manufacturers couldmodify the male-line by increasing its top speedin favor of cruising range, and any net increase inproduction costs could be more readily absorbedin the purchase price by the inelastic maledemandcurve.Willingness to Pay Estimates and TaxEffectsUp to this point, discussion has centered onthe estimated parameter values. To providemeaningful interpretations for the magnitudesof these parameters, and particularly to assessthe impact of tax incentives on the demandfor e-scooters, parameters are converted intomonetary values. Within the random utilitymaximization framework, each parameterrepresents a marginal utility. 14 The coefficienton price can thus be interpreted as the marginalutility of money, and multiplying any otherattribute’s coefficient by the negative inverse ofthe price coefficient yields the marginal rate ofsubstitution between that attribute and the price,which is the marginal willingness to pay (MWTP)for that attribute. 15 Following this procedureand using the parameter estimates from the fullmodel, the MWTP for selected attributes werecomputed.The MWTP for the tax is –1.61 million dong foreach million dong increase in the tax. Stateddifferently, a respondent would have to becompensated D1.61 million to incur a D1 milliontax increase and have his/her utility remainunchanged; or stated another way, a respondentwould be willing to pay D1.61 million extraon the price of a vehicle to avoid a D1 millionincrease in the sales tax.With the units of change in the attributesdefined as in the choice experiment, the taxhas the largest willingness to pay estimate of allsignificant variables. In particular, the effect ofthe tax is larger than the effect of the purchaseprice, which provides some evidence that a rider’scognitive response to an explicit tax incentiveis different from the response to an equivalentchange in price. The fact that the estimatedMWTP for tax is different from 1 (in magnitude)highlights the value of explicitly including the taxas an attribute in the choice experiment, becausethe different coefficients on the purchase priceand the tax generate differing MWTP estimates.Using the coefficient on price to infer the demandeffects of a tax incentive could lead to spuriousconclusions. Following the method of priceinference, Ewing and Sarigollu concluded that,although a tax incentive showed promise to boostthe adoption of alternative cars, its effect wassmaller than the effects of vehicle performanceattributes. 16 In contrast, explicitly including atax as an experimental attribute and observingits large marginal influence (greater than the14Given an additively separable linear specification of indirect utility (Holmes, P., and W. Adamowicz. 2003.Attribute-Based Methods. In Champ, P., K. Boyle, and T. Brown, eds. A Primer on Nonmarket Valuation.Dordrecht, The Netherlands: Kluwer Academic Publishers.).15Holmes and Adamowicz 2003.16Ewing and Sarigollu 2000.

marginal influence of price), this study concludesthat the incentive effect of a tax is larger than theeffects of vehicle performance attributes.In line with the current findings, Potoglou andKanaroglou also obtained large MWTP estimatesfor sales tax (between C$2,000 and C$5,000);however, although their study explicitly includedtax as an attribute, their results are not directlycomparable to those in the present investigation.The tax was presented to respondents as a “nopurchase tax” incentive, and the actual amountof the tax in the absence of this incentive wasleft open to respondent interpretation. Thus, inspecifying the MWTP for this incentive, the actualmonetary change in tax that would elicit aC$2,000–C$5,000 MWTP is left uncertain. 17 Inthe design for this study, all possible values ofthe tax were controlled and specified explicitly inthe experiment, thus allowing for more preciseinterpretations of MWTP.It is also worth noting the large MWTP foracceleration and for license required, twovariables not included in previous research one-scooter demand. 18 Respondents would payD1.29 million for a 20% increase in accelerationfrom the base level of 0–40 km in 10 seconds,and would pay D1.05 million to avoid a 20%decrease. Requiring a license for a vehicle isequivalent to increasing that vehicle’s purchaseprice by D1.01 million.Market Share PredictionsIn this section, the results from the conditionallogit model are used to estimate market sharesfor standard motorcycles, large motorcycles,and e-scooters in Ha Noi, given various statesof technology and policy. The market shares arederived by computing probabilities as nonlinearcombinations of the estimated coefficients, withthe experimental attributes set at given valuesand the dummy variable for “Male” held at thesample mean of 0.54.The analysis examines three different statesof e-scooter technology: current, upgraded,and cutting-edge. Each state is combined withboth low and high gasoline price scenarios.Each combination of e-scooter technology andgasoline price scenario is combined with twodifferent sales tax policies, one that reflects thecurrent taxation of e-scooters, and one thatprovides tax incentives for e-scooters. Marketshares are calculated for each combination oftechnology, gasoline price, and tax policy.Table 6 presents the attribute values thatwere selected for the three different states oftechnology in the low gasoline price scenariowithout an e-scooter tax incentive.The upgraded state of technology implementsmid-level enhancements in e-scooter technology,relative to the current technology, withoutassociated increases in price or operating costs.The e-scooter refuel range increases from60 km to 120 km; the recharging time fallsfrom 360 minutes to 30 minutes; accelerationincreases from being 20% slower to the same asa standard motorcycle’s; and the top speed risesfrom 40 km/h to 50 km/h.19 19❚❚❚ Market Analysis17Potoglou and Kanaroglou 2007.18Chiu and Tzeng 1999.

20❚❚❚ Electric Two-Wheelers in India and Viet NamThe cutting-edge state of technology posits evenfurther improvements in refuel range, rechargingtime, and top speed, relative to the upgradedtechnology, while assuming these improvementsto be accompanied by associated increases inprice and operating costs. Refuel range increasesto 200 km; recharging time falls to 10 minutes;and top speed increases to 60 km/h. Thee- scooter purchase price rises from D10 millionto D16 million. The electricity costs increase fromD5,000/100 km to D7,500/100 km, reflectinghigher energy requirements and also the capitalcosts of supercharging devices required for rapidrecharging. Finally, the maintenance costs risefrom D100,000/month to D140,000/month toaccount for the greater expense of enhancedbatteries.In the low gasoline price scenario, fuel costs areset at D30,000/100 km for both the standardand large motorcycles. These calculations arebased on a gasoline price of D15,000 per literand a specification of 50 km per liter for standardand large motorcycles. In late July 2008, theGovernment of Viet Nam cut back on fuelsubsidies and raised the price of retail gasolineby 31% to approximately D20,000 per liter.Market share predictions based on the highgasoline price scenario reflect this increasein the price of gasoline, and using the abovespecification for kilometers per liter, the fuelcosts are set at D40,000/100 km for both thestandard and large motorcycles in the highgasoline price scenario.Examining the taxes in Table 6, the sales tax foreach of the three vehicles is set at 10% of thepurchase price in the absence of the e-scooter taxincentive. These sales taxes are set to approximatethe current policy in Ha Noi. For the market sharepredictions based on the implementation of ane-scooter tax incentive, the sales tax for thee-scooter is set to 0%, while the sales taxesfor the standard and large motorcycles eachremain at 10%. Table 7 shows the market sharepredictions for each state of technology underboth low and high gasoline price scenarios, withand without the e-scooter tax incentive.Under the current technology with low gasolineprice and no e-scooter tax incentive, thee-scooter is predicted to hold the smallest share ofthe market for two-wheeled motorized transportat 20%, with the large motorcycle holding 33%,and the standard motorcycle holding the largestshare with 47%. Moving to a high gasoline pricewhile remaining with the current technologyand without an e-scooter tax incentive increasesthe predicted e-scooter market share to 23%.In general, for a given state of technology anda given tax policy, moving from a low to highgasoline price results in a 3% increase in thepredicted e-scooter market share.An examination of the posited technologicalimprovements reveals an influence on thepredicted market shares. Without the e-scootertax incentive, switching from the current stateof technology to the cutting-edge state oftechnology results in a 13% increase in thepredicted e-scooter share of the market undereither gasoline price scenario, from 20% to 33%in the low gasoline price scenario, and from23% to 36% in the high gasoline price scenario.Similarly, when the e-scooter tax incentive isin place, switching from current technology tocutting-edge technology increases e-scootermarket share from 23% to 38% with lowgasoline prices, and from 26% to 42% with highgasoline prices.

Table 6: Low Gasoline Price without Electric Scooter Tax Incentive(Ha Noi)AttributeCutting-EdgeTechnologyUpgradedTechnologyCurrentTechnologyPurchase price (D million)Standard motorcycle 10 10 10Large motorcycle 15 15 15E-scooter 16 12 12Refuel range (km)Standard motorcycle 100 100 100Large motorcycle 200 200 200E-scooter 200 120 60Refuel/Recharge time (min)Standard motorcycle 5 5 5Large motorcycle 10 10 10E-scooter 10 30 360Fuel/Electricity cost (D/100km)Standard motorcycle 30,000 30,000 30,000Large motorcycle 30,000 30,000 30,000E-scooter 7,500 5,000 5,000Maintenance cost (D/month)Standard motorcycle 20,000 20,000 20,000Large motorcycle 20,000 20,000 20,000E-scooter 140,000 100,000 100,000Acceleration aStandard motorcycle same as common same as common same as commonLarge motorcycle 20% faster 20% faster 20% fasterE-scooter 20% faster same as common 20% slowerTop speed (km/h)Standard motorcycle 80 80 80Large motorcycle 80 80 80E-scooter 60 50 40LicenseStandard motorcycle Yes Yes YesLarge motorcycle Yes Yes YesE-scooter No No NoSales tax (D million)Standard motorcycle 10% 10% 10%Large motorcycle 10% 10% 10%E-scooter 10% 10% 10%21 21❚❚❚ Market AnalysisD = dong, D/100 km = dong per 100 kilometers, D/month = dong per month, e-scooter = electric scooter, km = kilometer,km/h = kilometer per hour, min = minute, sec = second.aRelative to standard motorcycle: 0–40 km in 10 sec.Source: Authors.

Table 7: Market Share in Ha Noi—Varying Tax, Fuel Price, and Technology22❚❚❚ Electric Two-Wheelers in India and Viet NamMarket Share Predictions for Alternative Technologies without Tax IncentiveCurrentTechnologyLow Gasoline PriceUpgradedTechnologyCutting-EdgeTechnologyCurrentTechnologyHigh Gasoline PriceUpgradedTechnologyCutting-EdgeTechnologyStandard 0.47 (0.03) 0.41 (0.03) 0.40 (0.04) 0.46 (0.03) 0.39 (0.03) 0.38 (0.04)motorcycleLarge 0.33 (0.03) 0.28 (0.03) 0.27 (0.02) 0.32 (0.03) 0.27 (0.05) 0.26 (0.02)motorcycleE-scooter 0.20 (0.04) 0.31 (0.04) 0.33 (0.04) 0.23 (0.05) 0.34 (0.05) 0.36 (0.05)CurrentTechnologyMarket Share Predictions for Alternative Technologies with Tax IncentiveLow Gasoline PriceUpgradedTechnologyCutting-EdgeTechnologyCurrentTechnologyHigh Gasoline PriceUpgradedTechnologyCutting-EdgeTechnologyStandard 0.46 (0.03) 0.39 (0.03) 0.37 (0.04) 0.44 (0.04) 0.36 (0.03) 0.34 (0.04)MotorcycleLarge 0.31 (0.03) 0.27 (0.03) 0.25 (0.02) 0.30 (0.03) 0.25 (0.03) 0.24 (0.02)motorcycleE-scooter 0.23 (0.04) 0.35 (0.04) 0.38 (0.04) 0.26 (0.05) 0.38 (0.05) 0.42 (0.05)e-scooter = electric scooter.Note: Values not enclosed in parentheses are the coefficients, while values within parentheses are the standard errors. As aresult of rounding, the market shares for some alternatives may not sum to 1.Source: Authors.For a given state of technology and givengasoline price scenario, the e-scooter taxincentive increases the predicted market share ofe-scooters by 3% to 6%. Among the scenariosexamined, the e-scooter market share reachesits highest level of 42% under cutting-edgetechnology, high gasoline price, and e-scootertax incentive.Ahmedabad, IndiaNot all experimental attributes in the Ahmedabadsurvey were significant or had the expected sign.There are a number of possible explanations forthis, including lack of importance of the attributein the choice decision. However, it could alsobe that respondents did not read the choicequestions carefully or had a preconceived biasagainst electric two-wheelers. This is evidenced inthe high alternative specific constants for gasolinescooters and motorbikes. It could be the casethat individuals chose those modes consideringattributes that were not included in the choiceexperiment. Alternatively, individuals may havechosen based on the attributes in the choiceexperiment, but may have had preconceivednotions of those attributes as opposed to thelevels provided; or individuals may simply valuegas scooters solely for the fact that they arepowered by gas and not electricity.Table 8 shows the parameter estimates forthe conditional logit model estimated inAhmedabad. The alternative specific constants

Table 8: Parameter Estimates of the Conditional Logit Model (Ahmedabad)Variable Coefficient Standard Error p-valuePurchase price (Rs) (0.0000291) 1.57E-06 0Refuel or recharge range (km) 0.0001977 0.0001042 0.058Refuel or recharge time (min) (0.0019452) 0.0002849 0Fuel or electricity cost (Rs/km) (0.7535194) 0.0797702 0Maintenance cost (Rs/15000 km) 0.000057 0.0000623 0.36Top speed (km/h) 0.0022291 0.0011376 0.05Acceleration (0–30 km in X sec) (0.0127484) 0.0113414 0.261VAT + registration tax (Rs) 4.40E-06 5.85E-06 0.452Caplow (1 passenger) (0.5077588) 0.0678198 0Caphigh (3 passengers) 0.314273 0.050005 0Transmission (0.0016645) 0.0277165 0.952License (0.0577002) 0.046505 0.215Price x female (0.0000323) 0.0000119 0.007Speed x female 0.0206921 0.0069034 0.003Caplow x female 1.190801 0.3827393 0.002Caphigh x female (1.252734) 0.3179304 0Maintenance x female (0.0009319) 0.0004108 0.023Motorcycle alternative specific constant 2.078798 0.1689444 0Motor scooter alternative specific constant 2.073141 0.1416126 0N Obs 16,962Log-likelihood (0) (5060.6495)Log-likelihood (4947.4576)Wald Chi-Square 556.8023 23❚❚❚ Market Analysis( ) = negative, km = kilometer, km/h = kilometer per hour, min = minute, N Obs = number of observations, Rs = rupee, Rs/km= rupees per kilometer, Rs/15,000 km = rupees per 15,000 kilometers, sec = second.Note: p-value95% confidence that the parameter estimate is not equal to zero.Source: Authors.indicate a strong disposition toward gasolinepoweredtwo-wheelers. A notable insignificantvariable is VAT + Registration tax. The implicationhere is that Indian vehicle purchasers are lesssensitive to taxes than purchasers in Viet Nam.This could also indicate that the respondents didnot conceptualize the effect of the tax on theirpurchase choice, an inherent challenge withstated-preference choice experiments.There was difficulty including gender-attributeinteractions because females were undersam-pled. Unfortunately, the predominately malesurvey team had difficulty collecting data fromfemales, which creates estimation problemsin the model. Still, price, speed, capacity, andmaintenance costs interacted with genderinfluencedchoice. The interpretation of thenegative sign on maintenance cost and purchaseprice variables, interacted with females, indicatesthat females are more price-sensitive than males.Females are also less concerned with capacityas an important variable in their decision.Surprisingly, speed, interacted with female

24❚❚❚ Electric Two-Wheelers in India and Viet Namgender, is positive, indicating that females preferfaster vehicles than males, contrary to findingsin the Ha Noi model or in Chiu and Tzeng. 19Willingness to Pay EstimatesThe MWTP of various attributes is important tounderstand the substitution patterns of potentiale-scooter purchasers. Again, the MWTP isexpressed as the amount of money one wouldpay for a marginal increase or decrease in anotherparameter and is calculated as the quotient ofthe vehicle purchase price parameter estimateand the parameter of the variable in question.Notably, the alternative specific constantswere dominant in the MWTP estimates, aboutRs71,000, just for having a gasoline two-wheelerinstead of an electric. This exceeds the purchaseprice in many cases, yielding a strong prevalenceaway from electric two-wheelers. Speed isimportant, and respondents were willing to payRs76 per km/h top speed increase. Similarlyrespondents would pay Rs438 per secondreduced to reach 30 km/h (for instance,respondents would pay Rs438 more for a twowheelerthat accelerated from 0 to 30 km/h in5 seconds, compared to the same two-wheelerthat accelerated from 0 to 30 km/h in 6 seconds).Interestingly, capacity proved important asindividuals were willing to pay Rs10,000 fora scooter with an additional person-carryingcapacity. Regarding cross-price sensitivity,individuals were willing to pay Rs26,000 to saveRs1/km on fuel costs. Over the reasonable lifeof a vehicle (80,000 km), this fuel savings fromadditional investment in a fuel economy wouldpay for itself threefold. To put it another way,a vehicle purchaser will only pay an up-frontcost of about 1/3 of the expected fuel costsavings over the life of the vehicle. Consideringmaintenance costs, respondents were willingto pay about Rs2 to save Rs1/15,000 km inmaintenance costs. Again, assuming a vehiclelifespan of 80,000 km, the up-front willingnessto pay for an expected gain is about 1/3 of theexpected savings.Market Share PredictionsThe results of the conditional logit modelspecification are used to estimate marketshares for Ahmedabad, creating several classesof vehicles and estimating the future marketpotential of each class of vehicle. Similar tothe Ha Noi model, the analysis examines threedifferent states of e-scooter technology: current,upgraded, and cutting-edge. Each state iscombined with low and high gasoline pricescenarios. Since taxes did not enter significantlyin the model, they were not included as adeterminant of market share. Market shares arecalculated for each combination of technologyand gasoline price.Table 9 presents the attribute values thatwere selected for the three different states oftechnology in the low gasoline price scenario.Again, the upgraded state of technologyimplements mid-level enhancements in e-scootertechnology, relative to the current technology,without associated increases in price or operatingcosts.19Chiu and Tzeng 1999.

The two states where market share is analyzedare low and high gasoline price scenarios. Thelow gasoline price scenario reflects the currentmarket conditions, while the high gasoline pricescenario reflects a 33% price increase. This priceincrease is consistent with increases in fuel pricesseen around the world and could be a result oftaxation policy or market forces.Considering the high and low fuel prices,coupled with different performance and priceattributes of current and future generatione-scooters, market shares are estimated asshown in Table 10. In Ahmedabad, e-scootermarket potential is much lower than in Ha Noi.In the low gasoline price scenario, the currenttechnology e-scooter is estimated to penetrateonly 6% of the market. With an upgradedtechnology (performance), this value increases to19%. Interestingly, the market share drops in thecutting-edge technology case, to about 11%.The explanation of this drop is that the operatingcosts increase given higher energy requirementsand more expensive maintenance costs, whichoutweigh the performance improvements. Theimplication here is that consumers might not bewilling to pay for higher performing batteries andpower, in exchange for improved performance.Increasing gasoline prices by 33% results in a2–3 percentage point increase in market sharefor all three e-scooter classes.25 25❚❚❚ Market Analysis

26❚❚❚ Electric Two-Wheelers in India and Viet NamTable 9: Market Estimation Attribute Values(Ahmedabad)AttributeCutting-EdgeTechnologyUpgradedTechnologyCurrentTechnologyPrice (Rs)Motor scooter 39,500 39,500 39,500Motorcycle 58,700 58,700 58,700E-scooter 37,000 27,750 27,750Range (km)Motor scooter 100 100 100Motorcycle 200 200 200E-scooter 200 120 60Recharge time (min)Motor scooter 5 5 5Motorcycle 10 10 10E- scooter 10 30 360Fuel/electricity cost (Rs/km)Motor scooter 1.08 1.08 1.08Motorcycle 1.08 1.08 1.08E-scooter 0.09 0.06 0.06Maintenance cost (Rs/15,000 km)Motor scooter 7,500 7,500 7,500Motorcycle 7,500 7,500 7,500E-scooter 10,850 7,750 7,750Acceleration (0–30 km in XX sec)Motor scooter 5 5 5Motorcycle 4 4 4E-scooter 4 5 6Speed (km/h)Motor scooter 80 80 80Motorcycle 80 80 80E-scooter 60 50 40Capacity high (# adults)Motor scooter 2 2 2Motorcycle 2 2 2E-scooter 2 2 1TransmissionMotor scooter Automatic Automatic AutomaticMotorcycle Manual Manual ManualE-scooter Automatic Automatic Automaticcontinued on next page...

Table 9 continuedAttributeCutting-EdgeTechnologyUpgradedTechnologyCurrentTechnologyLicenseMotor scooter Yes Yes YesMotorcycle Yes Yes YesE-scooter No No NoVAT + registration taxMotor scooter 3,600 3,600 3,600Motorcycle 4,750 4,750 4,750E-scooter 1,600 1,600 1,60027 27❚❚❚ Market Analysiskm = kilometer, km/h = kilometer per hour, Maint = maintenance, min = minute, Rs = rupee, Rs/15,000 km = rupees per15,000 kilometer, Rs/km = rupees per kilometer, sec = second.Source: Authors.Table 10: Market Share in Ahmedabad—Vary Fuel Price and TechnologyCurrentTechnologyLow Gasoline PriceUpgradedTechnologyCutting-EdgeTechnologyCurrentTechnologyHigh Gasoline PriceUpgradedTechnologyCutting-EdgeTechnologyMotorcycle 0.32 (0.02) 0.28 (0.02) 0.30 (0.02) 0.31 (0.02) 0.26 (0.02) 0.29 (0.02)Motor scooter 0.62 (0.02) 0.53 (0.02) 0.59 (0.03) 0.60 (0.02) 0.50 (0.02) 0.57 (0.03)E-scooter 0.06 (0.01) 0.19 (0.02) 0.11 (0.03) 0.08 (0.02) 0.23 (0.03) 0.14 (0.04)e-scooter = electric scooter.Note: Values not enclosed in parentheses are the coefficients, while values within parentheses are the standard errors. As aresult of rounding, the market shares for some alternatives may not sum to 1.Source: Authors.

Environmental ImpactsAlthough e-scooters can be referred toas zero-emission vehicles, they do infact emit pollution from power plants.Additionally, they emit lead from battery manufacturingand recycling. A study in the PRCshowed that electric two-wheelers emit upto 30% of the mass of a battery over its lifecycle. Electric vehicles also tend to emit moresulfur dioxide (SO 2) pollution than conventionalgasoline vehicles because of reliance on coalpower plants. 20 Because electric two-wheelersare competing against gasoline scootersand motorcycles in India and Viet Nam,e-scooter-style vehicles will likely be requiredto attain market share. E-scooters have higherenergy requirements than smaller e-bikes soe-scooters could have higher emissions during theuse phase. In this section, use-phase emissions ofe-scooters were estimated and compared againstgasoline two-wheelers. Lead pollution was alsoestimated based on regional efficiencies of thelead battery production and recycling industries inIndia and Viet Nam.Ultimately, e-bike emission rates depend onemissions from the power sector. Both Viet Namand India have a high reliance on thermal powersources and, as demand grows, thermal powercontinues to constitute a high proportion of newcapacity. In 2006, 16% of India’s power was suppliedby hydropower, 2% by nuclear and about81% by thermal power, 86% of which is coalbased.21 Viet Nam relies much more heavily onhydropower sources, although thermal powersources are a large share. In 2004, 52% ofpower was generated by thermal power while48% was produced by hydropower. Only 12%of power was generated by coal, while the remainderwas generated by natural gas and otherthermal sources. 22Several studies have quantified motorcycle emissionrates worldwide. A recent, comprehensivestudy identified emission rates of two-strokeand four-stroke motorcycles. In both India andViet Nam, four-stroke motorcycles are quicklyreplacing two-stroke motorcycles, with fourstrokesconstituting 70% of new motorbike salesin India in 2004. 23E-bikes vary by country and region. E-scooteremissions in the PRC, with 85% reliance onfossil fuel electricity generation, are also shownin Table 11 for comparison. Notably, emissionrates from gasoline motorcycles are at least anorder of magnitude higher for most pollutants,compared to e-scooters.20Cherry et al. 2009.21US Energy Information Administration. 2009. Country Analysis Briefs–India. www.eia.doe.gov/emeu/cabs/India/Electricity.html22US Energy Information Administration. 2009. Country Analysis Briefs–Vietnam. www.eia.doe.gov/emeu/cabs/Vietnam/Electricity.html23Meszler, D. 2007. Air Emissions Issues Related to Two and Three-Wheeled Motor Vehicles. San Francisco:International Council of Clean Transport.

Table 11: Motorcycle Emission Rates(g/km)vehicles. 25 scooter, with mid-range motor power29ExhVOCEvapVOCTotalVOC CO NO X PM CO 2MaxCO 2 N 2 O CH 4 SO 2Two-stroke 15.5 1.25 16.75 18 0.05 0.5 40 118 0.002 0.15 …Four-stroke 1 1.25 2.25 12.5 0.15 0.1 55 77 0.002 0.2 …E-scooter, … … 0.007 0.02 0.06 0.017 21.5 … … … 0.13PRC... = not available, CH 4 = methane, CO = carbon monoxide, CO 2 = carbon dioxide, e-scooter = electric scooter, Evap = evaporativeemissions, Exh = exhaust emissions, g/km = gram per kilometer, max CO 2 = maximum CO 2emissions carbon dioxide,N 2 O = nitrous oxide, NO x = nitrogen oxide, PM = particulate matter, PRC = People’s Republic of China, SO 2 = sulfur dioxide,VOC = volatile organic compound.Source: Meszler, D. 2007. Air Emissions Issues Related to Two and Three-Wheeled Motor Vehicles. SanFrancisco: International Council of Clean Transport; Cherry, C., et al. 2009. Electric Bikes in the People’sRepublic of China (PRC)—Impact on the Environment and Prospects for Future Growth. Asian DevelopmentBank: Manila.Impact Estimation Methodology(750 W) and a maximum speed of 45km/h. This class of scooter is not widelyE-scooters in India and Viet Nam, to compete manufactured in the PRC because ofdirectly against gasoline motorcycles and regulatory pressure to develop slowerscooters and become more widely used, willdemand higher energy and thus more electricitygeneration with concomitant pollution perkilometer, compared to a smaller e-bike onthe same grid. In this analysis, three classesof e-scooters are analyzed for environmentalemissions:and lighter vehicles. The electricityrequirements at the plug are 2.3 kWh/100km.(iii) The third class is a more advancede-scooter, with motor power greaterthan 1,000 W and maximum speedsof over 55 km/h. There are few of this(i) The first class is the same estimated inCherry and Weinert et al., a lower power(350–500 W) scooter with a maximumspeed of 30 km/h. These scooters aretechnologically mature and very commonin the PRC. The electricity requirementsat the plug are 1.8 kilowatt-hours per100 km (kWh/100 km). 24class developed in Asia. The electricityrequirements at the plug of this class areestimated to be 3.1 kWh/100 km.Transmission losses require more electricity tobe generated at the plant than is delivered tothe outlet—10% more in Viet Nam, 14% morein the PRC, and 34% more in India. The higherthe transmission loss, the more electricity must(ii) The second class is an intermediate be generated per kilometer to power electric❚❚❚ Environmental Impacts24Cherry et al. 2009.25Lawrence Berkeley National Laboratory. 2004. China Energy Databook 6.0. http://china.lbl.gov/research/china-energy-databook; WebIndia123.com. 2009. Steps Will Be Taken to Bring Down Transmission Loss:Balan. 14 June. http://news.webindia123.com/news/Articles/India/20090614/1275122.html; VietnamNews. 2009. EVN Wants Cap on Power Losses. 10 July. http://vietnamnews.vnagency.com.vn/showarticle.php?num=03ECO190509

30❚❚❚ Electric Two-Wheelers in India and Viet NamOnce plug-to-wheel and plant-to-plug energyuse is estimated, one can estimate the totalelectric energy use requirements per kilometer.First, one has to estimate the emission intensityof electricity generation, expressed as grams ofpollutant per kilowatt-hour. Emission rates fromthe power sector, per kilowatt-hour of generatedelectricity, are estimated using two databases.For CO 2 emissions, the Carbon Monitoring forAction (CARMA) database is used to estimatethe intensity of CO 2 emissions per kilowatthourof electricity generation, averaged over thecountry. Conventional pollutant emission ratesare estimated by summing aggregate emissioninventories in the power sector, estimated by theNational Aeronautics and Space AdministrationIntercontinental Transport Experiment PhaseB (NASA INTEX-B), and dividing by the totalelectricity generation in each country provided bythe CARMA database. 26 Each of these analyseswas conducted using a geographic informationsystem (GIS) to spatially estimate emissions. Inall cases, aggregate emissions from the powersector were averaged, rather than plant-specificemission rates. The pollutants estimated includeCO 2 , black carbon (BC), CO, NO X , organiccompounds (OC), particulate matter 10 (PM 10 ),particulate matter 2.5 (PM 2.5 ), SO 2, and volatileorganic compounds (VOC).Regionally, emission rates could vary dependingon the electricity generation fuel mix in eachspecific grid. In the PRC, regional variationscan account for some regions having up to sixtimes higher emissions per kilowatt-hour than“cleaner” grids for some pollutants. Viet Namhas one continuous power grid, so it wasassumed that each unit of electricity generationhas the same emission intensity. India has fivedistinct power grid networks, but grid-specificemission rates were not estimated because ofthe lack of region-specific power generationlocations. Given this, national emission rates forIndia were estimated. The calculation method isshown in Appendix 2.Emission Rates of ElectricScooters in India and Viet NamUsing the above methodology, the emissionrates for the three vehicle classes are estimatedand presented in Table 12. Because of thestructure of Viet Nam’s energy and leadprocessing industry and resources, e-scooteremission rates are significantly lower thanIndia’s for most pollutants. Still, compared withgasoline two-wheelers, e-scooters have muchlower emission rates on almost all pollutants inboth countries.Importantly, on a per-kilometer basis, e-scooterscan reduce CO 2 emissions by one-third to onehalfof a motorcycle’s emissions. CO is practicallyundetectable compared to a motorcycle’s emissions.The only pollutant that has a potentially higheremission rate during the use phase is SO 2 , whereasSO 2 emission rates of vehicles using unleadedgasoline are often undetectable. There are someimportant differences to note between using ane-scooter in India and Viet Nam. Particularly,the CO emission rate in Viet Nam is orders ofmagnitude higher than CO emissions in India. Onthe other hand, the OC emission rate is severalorders of magnitude higher in India than the OCemission rate in Viet Nam. This is likely because ofa different fuel mix for electricity generation.26Argonne National Lab. 2006. 2006 Asia Emissions for INTEX-B. 7 June. http://www.cgrer.uiowa.edu/EMISSION_DATA_new/index_16.html; CARMA. 2009. Carbon Monitoring for Action. July 1. http://carma.org

CO 2(g/km)BC (mg/100 km)CO (mg/100 km)NO X(g/100 km)OC(g/100 km)PM 10(g/100 km)PM 2.5(g/100 km)SO 2(g/100 km)VOC(g/100 km)Table 12: Emission Rate of Electric Scooters in India and Viet NamClass ILowPowerE-scooterIndiaClass IIMidPowerE-scooterClass IIIHighPowerE-scooterClass ILowPowerE-scooterViet NamClass IIMidPowerE-scooterClass IIIHighPowerE-scooterIndia andViet Nam4-StrokeTwowheeler21.9 28.0 37.8 16.1 20.5 27.7 5527.3 34.8 47.0 0.8 1.0 1.4 –0.03 0.04 0.05 31.5 40.2 54.2 1,250,0004.8 6.2 8.3 1.3 1.7 2.3 1592.8 118.6 159.8 0.4 0.5 0.6 –4.5 5.8 7.8 0.3 0.4 0.6 102.8 3.6 4.9 0.2 0.3 0.4 –8.1 10.3 13.9 1.9 2.4 3.3 –0.4 0.5 0.6 0.0 0.1 0.1 22531❚❚❚ Environmental Impacts– = no data available, BC = black carbon, CO = carbon monoxide, CO 2 = carbon dioxide, e-scooter = electric scooter,g/100 km = gram per 100 kilometers, g/km = gram per kilometer, mg/100 km = milligram per 100 kilometers,NO x = nitrogen oxide, OC = organic compound, PM 10 = particulate matter 10, PM 2.5 = particulate matter 2.5, SO 2 = sulfur dioxide,VOC = volatile organic compound.Source: Authors; Meszler, D. 2007. Air Emissions Issues Related to Two and Three-Wheeled Motor Vehicles. San Francisco:International Council of Clean Transport.Environmental Impacts ofElectric Scooter AdoptionWhile e-scooters have lower emission ratesthan gasoline scooters, their impact can onlybe realized with high adoption rates. Couplinge-scooter scenarios developed in the marketanalysis section with environmental emissionrates can show reductions in transportationrelatedemissions, in terms of both local pollutantsand greenhouse gases. The market scenariosdeveloped in Tables 7 and 9 are extended belowin Tables 13 and 14, coupled with the weightedemission rate of two-wheelers in the country byscenario. These tables present several scenariosof e-scooter adoption, based on improvedperformance and economic incentive. Based onthese scenarios, the impact of e-scooters canbe estimated through an average two-wheeleremission rate that takes into account theproportions of the fleet comprising gasoline andelectric two-wheelers. This weighted emissionrate includes the appropriate e-scooter class andweights the emissions by the proportion of thetwo-wheeler market that the e-scooter captures.This assumes that as e-scooters replace gasolinetwo-wheelers, e-scooter users use gasolinetwo-wheelers in the same way. For instance,

32❚❚❚ Electric Two-Wheelers in India and Viet NamTable 13: Two-Wheeler Average Emission Rate Impacts of Electric Scooter Market Penetration—Ha NoiNo Tax Incentive Tax IncentiveScenario 1 Scenario 2 Scenario 3 Scenario 4% Change(comparedto 100% gastwo-wheeler)High GasPrice Class IIIE-Scooter42%E-scooters% Change(comparedto 100% gastwo-wheeler)Low GasPrice Class IIIE-Scooter38%E-scooters% Change(comparedto 100% gastwo-wheeler)High GasPrice Class IIIE-Scooter36%E-scooters% Change(comparedto 100% gastwo-wheeler)Low GasPrice Class IIIE-Scooter33%E-scootersCurrentState b0%Pollutant a E-scooters55 46.0 (16) 45.2 (18) 44.6 (19) 43.5 (21)CO 2(g/km)1,250 838 (33) 800 (36) 775 (38) 725 (42)CO(g/100km)15 10.8 (28) 10.4 (30) 10.2 (32) 9.7 (36)NO X(g/100km)10 6.9 (31) 6.6 (34) 6.4 (36) 6.0 (40)PM 10(g/100km)1.4 Newemissions1.2 Newemissions1.2 NewemissionsSO 20 1.1 New(g/100km) c emissions225 151 (33) 144 (36) 140 (38) 131 (42)VOC(g/100km)( ) = negative, CO = carbon monoxide, CO 2 = carbon dioxide, e-scooter = electric scooter, g/100 km = gram per 100 kilometers, g/km = gram per kilometer, NO X = nitrogen oxide,PM 10 = particulate matter 10, SO 2 = sulfur dioxide, VOC = volatile organic compound.aSome pollutants were omitted from this table because they were not consistently reported across data sets.bFrom Meszler 2007.cSO 2 is unreported in Meszler 2007. It is assumed that the emission rate is zero for gasoline two-wheelers since this is an important new emission from electric vehicles.Source: Authors; Meszler, D. 2007. Air Emissions Issues Related to Two and Three-Wheeled Motor Vehicles. San Francisco: International Council of Clean Transport.

Table 14: Two-Wheeler Average Emission Rate Impacts of Electric Scooter Market Penetration—AhmedabadLow Gasoline Price High Gasoline PriceScenario 1 Scenario 2 Scenario 3 Scenario 4% Change(comparedto 100%gas twowheeler)Class IIIE-Scooter14%E-scooters% Change(comparedto 100%gas twowheeler)Class IIE-Scooter11%E-scooters% Change(comparedto 100%gas twowheeler)Class IIIE-Scooter23%E-scooters% Change(comparedto 100%gas twowheeler)Class IIE Scooter19%E-scootersCurrentState b0%Pollutant a E-scooters55 50.0 (9) 48.7 (11) 52.0 (5) 51.2 (7)CO 2(g/km)1,250 1,016 (19) 960 (23) 1,113 (11) 1,075 (14)CO(g/100 km)15 13.4 (11) 13.0 (14) 14.0 (6) 13.8 (8)NO X(g/100 km)10 9.2 (8) 9.0 (10) 9.5 (5) 9.4 (6)PM 10(g/100 km)1.4 Newemissions1.1 Newemissions2.4 NewemissionsSO 20.0 1.9 New(g/100 km) c emissions225 183 (19) 173 (23) 200 (11) 194 (14)VOC(g/100 km)( ) = negative, CO = carbon monoxide, CO 2 = carbon dioxide, e-scooter = electric scooter, g/100 km = gram per 100 kilometers, g/km = gram per kilometer, NO X = nitrogen oxide,PM 10 = particulate matter 10, SO 2 = sulfur dioxide, VOC = volatile organic compound.aSome pollutants were omitted from this table because they were not consistently reported across data sets.bFrom Meszler 2007.cSO 2 is unreported in Meszler 2007. It is assumed that the emission rate is zero for gasoline two-wheelers since this is an important new emission from electric vehicles.Source: Authors; Meszler, D. 2007. Air Emissions Issues Related to Two and Three-Wheeled Motor Vehicles. San Francisco: International Council of Clean Transport.33❚❚❚ Environmental Impacts

34❚❚❚ Electric Two-Wheelers in India and Viet Nama 33% shift toward e-scooters will result in a33% replacement of vehicle kilometers traveled.There are two potentially counterbalancingforces that could produce biased results from thisassumption: (i) since the marginal cost of travelis lower, there could be more induced travel bye-scooter owners; and (ii) e-scooters generallyhave a lower range than their gasolinecounterparts, so e-scooter owners might makeshorter trips on average.It should be noted that emission rate reductionsare compared to the average emission rate ofthe gasoline two-wheeler, and do not suggestthat ambient air quality will improve by thispercentage in urban areas. It is uncertain whateffect e-scooters will have on ambient air qualityin populated areas for two reasons.Gasoline two-wheelers are responsible formuch, but not all air pollution in urban areas. Forinstance, gasoline two-wheelers are responsiblefor about 80% of transport-related CO pollutionin Ha Noi. By displacing 33% of gasoline twowheelerswith e-scooters, total transport-relatedCO emissions could be reduced by 26%. Onthe other hand, gasoline two-wheelers areonly responsible for 20% of transport-relatedPM emissions (dominated by heavy-duty dieselvehicles), so by displacing 33% of gasolinetwo-wheelers with e-scooters, transport-relatedPM emissions will be reduced by 6% (20%times 31%). 27Gasoline two-wheelers emit pollution directlyinto the urban environment, impacting localambient air quality directly. E-scooters emitpollution from sometimes remote power plants,impacting ambient air quality in different regions.This could result in significantly improved publichealth through reduced exposure efficiency ofair pollution. 28Although e-scooters do emit slightly more SO 2 ,there are very clear advantages of promotinge-scooters in Viet Nam and India. In fact,subsidizing e-scooter adoption could be a morecost-effective method of reducing CO 2 emissionsthan many competing alternatives. Moreover,e-scooter adoption will likely result in muchgreater local air pollution improvement.E-scooters have the potential both to improvelocal air quality and reduce greenhouse gasemissions derived from the transport sector. Infact, they can be very cost effective at both.For instance, in Ha Noi, 12 billion passengerkilometerswere traveled by motorbike in 2005,or about 8,000 km per year per motorbike. 29 Thisanalysis shows that 33% of the future marketcould choose e-scooters with little governmentintervention, assuming that the best technologyis developed and marketed by industry. Assumingthat 33% of the 12 billion passenger-kilometersare taken by e-scooters in the future, the totalemissions would be 552,000 metric tons ofCO 2 yearly. E-scooter market adoption couldincrease to 38% if e-scooters were exemptfrom registration tax (10%) and gasoline twowheelerswere still subject to that tax, resultingin a 5-percentage-point increase in adoption.This market penetration would result in total27Schipper et al. 2008.28Heath et al. 2006.29Schipper et al. 2008.

two-wheeler CO 2 emissions of 535,200 tons,or a 16,800 ton reduction per year. If an e-scooter’s lifespan is 6 years, on average, each e-scooter that replaces a gasoline scooter wouldreduce CO 2 emissions by 1.3 tons. 30 This wouldcost about D1 million per e-scooter, or about$48/ ton. While this is more expensive than somealternatives, the co-benefits of improved airquality could justify public subsidy of this mode.The potential improvements are more modestin Ahmedabad for two reasons. The first is thate-scooters have a negative perception, even withprice and performance advantages. This results ina low market adoption, impeding policy attemptsto influence market demand. The second reasonis that India’s electricity generation emissionrates are relatively high, reducing the netbenefit of a shift from gasoline two-wheelers toe-scooters. With effective marketing campaigns,public perception could shift toward e-scooters;however, current consumers seem unresponsiveto direct price incentives, like VAT reduction.Lead PollutionLead pollution is a significant concern when consideringe-scooter adoption. Lead acid batteriesare still the dominant battery technology adoptedby e-scooter manufacturers in Asia, withover 95% of electric two-wheelers using them. 31In addition, Asia has a relatively poor record forbattery production and recycling efficiency. Inthe PRC, lead pollution rates from e-scootersare about 420 milligrams per kilometer (mg/km),compared to about 32 mg/km for a gasolinetwo-wheeler. 32 All of these emissions occur duringthe mining and smelting, battery manufacture,and recycling phases.Estimating lead pollution of e-scooters in Indiaand Viet Nam is complicated since a large portionof lead batteries are imported from the PRC. Maoand Dong et al. estimate regional emission ratesof lead from battery production and recycling. 33For the most part, regional rates are discussed,but given India’s size, the authors calculate Indiaspecificloss rates. India has one of the lowestlead-loss rates in Asia, 10.9% of lead output,while Asia’s average is 19.6% of lead output.Battery life is related to both recharge cycles andweather. Battery life can deteriorate significantlyin hot or cold temperatures. 34 Since e-scooters arenew vehicles, it is difficult to estimate how manykilometers one might travel before replacing abattery. Additionally, batteries for larger, fastere-scooters are significantly larger than batteries inmost Chinese e-scooters. Table 15 shows batterysize, weight, and lead emissions for differente-scooter classes and mileage assumptions.35❚❚❚ Environmental Impacts30This is a calculation of the total amount of CO 2reduction over the life of vehicle. CO 2reduction (in grams) =8,000 km/yr*6 (55gCO 2/km-27.7g CO 2), where 55g/km is the assumed emission rate of gasoline motorcyclesand 27.7g/km is the average CO 2emission rate of electric scotters.31Jamerson and Benjamin 2007.32Cherry et al. 2009.33Mao, J. et al. 2008. A Multilevel Cycle of Anthropogenic Lead: II. Results and Discussion. Resources, Conservationand Recycling. 52 (8–9). pp. 1050–1057.34Weinert, J.X. et al. 2007. Lead-Acid and Lithium-Ion Batteries for the Chinese Electric Bike Market and Implicationson Future Technology Advancement. Journal of Power Sources. 172 (2). pp. 938–945.

Table 15: Average Emissions from Lead Acid Batteries36❚❚❚ Electric Two-Wheelers in India and Viet NamE-scooterClass IIndiaE-scooterClass IIE-scooterClass IIIE-scooterClass IViet NamE-scooterClass IIE-scooterClass IIIBattery capacity (Ah) 20 30 40 20 30 40Lead content (kg) 18 29 40 18 29 40Lead loss rate10.9 10.9 10.9 19.6 19.6 19.6(% of output) aMileage over15,000 15,000 15,000 15,000 15,000 15,000battery life bAverage emissionrate (mg Pb/km)131 211 291 235 379 523Ah = amp-hour, e-scooter = electric scooter, kg = kilogram, km = kilometer, mg Pb/km = milligram lead per kilometer.aFrom Mao and Dong et al. 2008. India-specific rate of 10.9% used for India and Asia average rate or 19.6% used forViet Nam.bEmission rate per kilometer is very sensitive to battery life since all production and recycling emissions are averaged overthe life cycle of the battery. Estimates vary on the amount of mileage one can achieve per battery, but most makers report10,000–15,000 km.Source: Authors; Mao, J. et al. 2008. A Multilevel Cycle of Anthropogenic Lead: II. Results and Discussion.Resources, Conservation and Recycling. 52(8–9). pp. 1050–1057.

ConclusionsE-scooter adoption is dependent on anumber of variables, including purchaseprice, operating costs, maintenance cost(battery purchase), performance, and regulation.In both Ahmedabad, India, and Ha Noi, VietNam, individuals valued various attributesdifferently, illustrating the need for locationspecificpolicies. For instance, removing licenserequirements is “worth” about D1 millionon average in Ha Noi, whereas they are notimportant in Ahmedabad. One of the commonthemes among survey respondents and othertransport experts in both cities is that e-scooterssuffer a perception problem. Individuals seemskeptical of their reliability or perceive themto be low-power, low-performance vehicleswhose quality is not proven. In fact, a poorreputation for quality is likely a significant factor.If given accurate information related to e-scooterperformance and price, individuals have somelikelihood of choosing them over gasoline twowheelers.However, many individuals do not haveadequate knowledge to make this decision in themarketplace. It is incumbent upon industry andthe government to increase public awareness toadequately market the performance and pricecharacteristics of e-scooters, in an environmentwhere gasoline two-wheelers are ubiquitous andtheir performance well known.replaces a gasoline two-wheeler reduces CO 2emissions by 1.3 tons per vehicle over its lifespanin Ha Noi. Moreover, almost all local air pollutantsare reduced, with the likely exception of SO 2 . InAhmedabad, the direction of the impact is thesame on all pollutants, but more modest sincethe power generation sector is more emissionintensive and the likelihood of wide-scaleadoption seems lower, based on the surveys.Lead pollution is a serious concern that needsto be avoided through adoption of cleanerlithium-ion and/or nickel-metal hydride batterytechnologies or vastly improved recovery andrecycling processes. Some of the more advancedlead production, battery manufacture, andrecycling processes have quite low loss rates,in the order of 5% of the final lead mass ofthe battery. Moreover, steps can be taken toassure containment of emissions to improveenvironmental and occupational health. BothIndia and Viet Nam have begun adoption ofan environmental certification program, BetterEnvironmental Sustainability Targets, whichfocuses on reducing negative impacts associatedwith lead battery manufacture.Instruments to Improve ElectricScooter AdoptionThe air quality improvement and CO 2 reductionswill be significant if e-scooters can replacegasoline two-wheelers. Each e-scooter thatThere are many ways to support e-scooteradoption, including removing fuel subsidies forgasoline two-wheelers and subsidizing clean

38❚❚❚ Electric Two-Wheelers in India and Viet Nambattery technology, preferential taxation andregistration fees. While operating costs (electricity)are very low, the up-front cost of batteries isprohibitive for many consumers, even thoughthe average cost over time could be significantlylower than that of a gasoline two-wheeler.Alternative financing models could potentiallyovercome this problem, like leasing or financingbatteries, but these models are unproven in thiscontext. Without marketing to inform the publicand address negative perceptions of e-scooters,or shifts in the economics of vehicle choice (likemajor gasoline price shifts), e-scooters will onlyconstitute a small portion of vehicles on thestreet. As technology advances and prices drop,coupled with improved performance, e-scooterscan begin to become more widely used. Untilthen, government intervention to improve theeconomic advantage of e-scooters relative togasoline two-wheelers could be a cost-effectivepollution mitigation strategy.Role of Policy MakersPolicy makers have a few tools that they can useto improve the market of e-scooters. In general,preferential taxation policy is shown to factorin increasing market share. This policy couldinclude raising sales taxes and registration fees atthe point of purchase for gasoline two-wheelers,while simultaneously reducing e-scooter fees.In Ha Noi, a D1 million tax differential is worthabout a D1.6 million purchase price advantagetoward e-scooters. This tax preference could benear term, until adoption rates are reasonableand the technology proven. Removing licensingrequirements also encourages adoption inHa Noi, although this could have safetyconsequences. While it is difficult for thegovernment to reduce operating costs (fuelprimarily), a more country-level response wouldinclude reducing gasoline subsidies, effectivelyincreasing gasoline prices. Unfortunately, thisbroad-brush approach does not target gasolinetwo-wheelers specifically, but will increaseoperating costs of gasoline vehicles and thusincrease the operating cost advantage of electricvehicles.Two main components of the success of e-bikesin the PRC are infrastructure availability andsomewhat draconian bans on gasoline twowheelersin many cities. The current e-scootertechnology is comparable in performance to agasoline two-wheeler in an urban environment,so e-scooters do not necessarily require exclusiveinfrastructure. Increasing regulation againstgasoline two-wheelers, although difficult, isone of the most effective ways to promotee-scooters.Role of IndustryThe models presented in this report identifymany performance characteristics that willimprove the overall marketability of e-scooters,in addition to price components that are largelyin the hands of the industry. Several factors weredeemed important, including top speed, range,acceleration, and purchase and operating costs. Itis the responsibility of the companies and industryassociations to improve the performance ofe-scooters so that they can compete on a similarlevel as gasoline two-wheelers. The disadvantageof e-scooters is the battery system that must bepurchased up-front. This makes the purchaseprice significantly more expensive and consumersare only willing to pay one-third the expected

lifetime savings at the time of purchase. This is asignificant hurdle, but research and developmentare resulting in improved e-scooter performanceat lower prices. Unfortunately, because of therelatively modular e-scooter industry, weakintellectual property protection, and low barriersto entry, e-scooter companies have little incentiveto innovate. 35One of the biggest hurdles is negative perceptionsand misconceptions. An industry association thatregulates the quality of vehicles and effectivelymarkets e-scooters is important to overcomepersistent, if unwarranted, negative perceptions,many of which are based on some bad earlyexperiences of the e-scooter industry.Joint RoleTo increase e-scooter adoption, government andindustry must join to develop marketing strategiesfor e-scooters. Government can also serve as anearly adopter for agencies and employees tocreate an initial market and overcome negativeperceptions. Government can also provide directsubsidy to overcome higher-quality batteryprice barriers, which simultaneously improvesperformance and reduces environmentalimpacts. Finally, because of the fragmentednature of the e-scooter industry, government ornongovernment research and development canimprove the technology, which can be sharedwith industry.Final RemarksE-scooters have potential to improve air qualityand reduce greenhouse gas emissions inViet Nam and India. This research developedseveral models to estimate the effects of policymeasures and technological improvements onvehicle choice and, ultimately, air quality. Theapplication of these models can test a numberof policy and technology scenarios, of which afew are presented in this report. Future workcan apply these models to specific policies orimprovements in performance or price. Notably,the models do not estimate all of the factorsthat could influence choice, as evidenced bythe “alternative specific constants” for gasolinetwo-wheelers. These constants include manyfactors that vary between vehicle types but areunobserved, and likely include issues relatedto perception. E-scooter adoption can increasewith a combination of increased performance,reduced price, regulations favoring e-scooters(or harming gasoline two-wheelers), improvedinfrastructure, and effective marketing. Theseare all difficult to achieve, but the benefitscould supplant other strategies toward reducingenvironmental problems.39❚❚❚ Conclusion35Weinert, J.X. et al. 2008. The Future of Electric Two-Wheelers and Electric Vehicles in China. Energy Policy.36 (7). pp. 2544–2555.

40❚❚❚ Electric Two-Wheelers in India and Viet NamAppendix 1: Logit ModelingFormulationThe data analysis applies the conditional logitmodel based on the theory of random utility. 1Let the indirect utility associated with vehicle kbe given by:where k = 1,...,m (m alternatives)ƒε kX kßα={1y ji0( dkXk; ) + kV = f , , ,k= deterministic component of utility= stochastic component of utilityreflecting researcher uncertainty= sector of attributes for option k= vector of attribute parameters to beestimated= the parameter on to be estimatedif j chose iotherwised kwhere k = 1 denotesthe reference alternative.variables, the probability of choosing alternativei from choice set C is given by:Let the subscript j denote the jth respondent forj =1,…,Nand letP( i / C)={1y ji0 mk1expexp( d X)( d X)Then the log-likelihood to be maximized isspecified as follows:logL=Nikif j chose iotherwisem∑∑j=1 k=1yjilogm∑k=1iexpkexp( f )i( f )kNow assume an additively separable linearindirect utility function:Vkd Xkk kFurthermore, assume ε κ ∼iid that across all alternativesas a Type I Extreme Value Distribution.It can be shown that, as a result of the propertiesof Type I Extreme Value Distribution random1McFadden, D. 1974. Conditional Logit Analysis of Qualitative Choice Behavior. In Zarembka, P. ed. Frontiersin Econometrics. New York: Academic Press.

Appendix 2: Electric VehicleEmission Rate Estimatione = electricity requirement from the plug towheel41Once emission intensities are estimated, one canestimate emission rates of electric vehicles perkilometer as follows:EmissionRate (g/km) = e ×(1+tl)×∑Epowerplants∑Gpowerplantstl = transmission loss rate∑Epowerplants∑Gpowerplants= total emissions of a certain pollutantfrom all power plants= yearly electricity generation of allpower plants.❚❚❚ Appendixeswhere EmissionRate = emission rate of a certainpollutant from an e-scooter

42❚❚❚ Electric Two-Wheelers in India and Viet NamAppendix 3: Market AnalysisStated-preference experiments are frequentlyused in marketing for forecasting new productdemand and in recent years the methodologyhas been applied by transport and economicresearchers to assess the demand for new“green” vehicles. Most of this stated-preferenceresearch on electric cars and alternative fuelvehicles has focused on the effects of price andvehicle performance attributes on the purchasedecision; relatively few studies have examined theeffect of economic instruments on this decision.Potoglou and Kanaroglou examined the ability ofeconomic incentives to encourage clean vehicleadoption, using a stated-preference internetsurvey in Hamilton, Canada. 1 Their experimentinvolved the choice between an alternative fuelvehicle, a conventional gas vehicle, and a hybridelectric vehicle based on class/size, purchase price,annual fuel cost, annual maintenance cost, fuelavailability, and acceleration. The authors madeincentives explicit attributes in the experiment,which included access to high occupancy vehicle(HOV) lanes, exemption from parking/meter fees,and exemption from sales tax.Potoglou and Kanaroglou found that theprobability of adopting an alternative fuelvehicle or a hybrid electric vehicle increased inthe presence of a tax free option. 2 In particular,their analysis indicated that all else being equal,respondents would pay an additional C$2,000to C$5,000 for a vehicle that was exempt ofsales tax.Relative to the number of studies on preferences for four-wheeled alternative vehicles, theresearch that has been conducted to assess themarket potential for two-wheeled alternativevehicles is quite limited. Only one paper to date(that the authors know of) has used the statedpreferencemethod to dissect the choice decision fore-scooter purchases. Chiu and Tzeng examinedthe demand for e-scooters in Taipei,China. 3 Theirrandom sample of households in Taipei,Chinawas used to evaluate the choice between a largeenginemotorcycle, a small-engine motorcycle,and an electric motorcycle based on purchaseprice, top speed, emission level, operatingcost, cruise range, style, and environmentalfriendliness.Chiu and Tzeng’s investigation revealed thatmotorcycle preferences differed between maleand female riders, and thus they estimated asegmented multinomial logit model for malesand females. 4 The authors found purchase priceand speed to be significant choice determinantsfor all riders, and found that education and thenumber of motorcycles per household memberhad positive effects on choosing an electricmotorcycle. Their results confirmed genderspecificeffects for operating costs, range, andstyle. Cruising range was positive and significant1Potoglou and P. Kanaroglou. 2007. Household Demand and Willingness to Pay for Clean Vehicles. TransportationResearch Part D. 12. pp. 264–274.2Potoglou and Kanaroglou 2007.3Chiu Y.C., and G.H. Tzeng. 1999. Transportation Research Part D. 4(2). pp. 127–146.4Chiu and Tzeng 1999.

for all males, while operating costs were importantto older males. Females showed a preference fora scooter-style bike over a traditional style, mostlikely because the scooter-style is lightweight andis more comfortable. Economic incentives werenot explicitly considered, although increasinge-scooter subsidies were offered as a way tostimulate adoption.43❚❚❚ Appendixes

Electric Two-Wheelers in India and Vietnam—Market Analysisand Environmental ImpactsWhile the use of electric two-wheelers has increased in the People’s Republic of China(PRC) in the past decade, such unparalleled growth has not extended beyond the PRC’sborders to countries, such as India and Viet Nam, where environmentally detrimentalgasoline motorcycles dominate. This report documents market conditions in Ahmedabad,India, and Ha Noi, Viet Nam, to explain why this is so, and analyzes the potentialenvironmental impact of electric two-wheelers to show how they could chart a pathtoward sustainable transport in these and other countries in the region.About the Asian Development BankADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help itsdeveloping member countries substantially reduce poverty and improve the quality of lifeof their people. Despite the region’s many successes, it remains home to two-thirds of theworld’s poor: 1.8 billion people who live on less than $2 a day, with 903 million strugglingon less than $1.25 a day. ADB is committed to reducing poverty through inclusiveeconomic growth, environmentally sustainable growth, and regional integration.Based in Manila, ADB is owned by 67 members, including 48 from the region. Its maininstruments for helping its developing member countries are policy dialogue, loans, equityinvestments, guarantees, grants, and technical assistance.Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgISBN 978-971-561-873-1Publication Stock No. RPT091118Printed in the Philippines