Competition in electric two wheeler market ramps up as Honda unveils electric bike 

Atlas Honda, Pakistan’s largest two-wheeler manufacturer, has unveiled its inaugural electric two-wheeler for Pakistan. The vehicle, christened the BENLY-e, is currently in its test marketing phase, and as such neither has a release date nor a price tag. However, its advent heralds the dawn of a new era in the two-wheeler space: electric mobility.

The Honda BENLY-e was revealed by Noriaki Abe, Chief Officer of Motorcycle and Power Products at Atlas Honda, at a ceremony held at Atlas Honda’s Sheikhupera factory on November 28 as part of its 60th anniversary celebrations. During the event, Noriaki Abe announced that the Honda BENLY-e was a trial product, and the company would introduce innovative products based on the market feedback. Reflecting on the success of Atlas Honda in Pakistan, Noriaki Abe stated, “Honda products have become an indispensable part of the daily life of many in Pakistan”.  

“It will take them some time before they are able to go beyond the test marketing stage, and actually launch it.   Even if they manage to launch their product in a mere six months, it will come with a hefty price tag. The estimated cost is around Rs 1 million, which would severely restrict the volume to a meagre 5,000 – 6,000 vehicles per annum. In the most optimistic scenario, it might sell 10,000 units,” asserts Muhammad Sabir Shaikh, Chief Coordinator of the Electric Two Wheelers Manufacturing Group.

The BENLY-e currently retails internationally for between ¥7 lakh 37 thousand and ¥7 lakh 48 thousand — which translates to Rs 14 lakh 29 thousand and 14 lakh 44 thousand, using a rate of 1¥: Rs 1.9, respectively. “Customer purchasing power has dwindled. Even the Chinese electric motorcycles that debuted in the range of Rs 300,000 have received a lukewarm response from the customers,” elaborates Shaikh.

With Honda’s entry to the market, all major two wheeler manufacturers have their own electric mobility solution. However, Honda’s entry to the two wheeler market sends the signal that the electric two wheeler market is now a force to be reckoned with because of the scale that it brings.

The scale of the giant 

To grasp the implications of Honda’s move, one must first comprehend the magnitude of Honda’s operations. For the past decade, from fiscal year (FY) 2014 to FY 2023, Honda has produced an average of 9 lakh 86 thousand vehicles per annum.

This translates to a staggering market share of over 80% in two of those years, peaking at 90% in FY 2015. Honda has consistently dominated the market with more than 60% share every year, and currently holds 89% in FY 2024, according to the statistics provided by the Pakistan Automotive Manufacturers Association.

What does this entail? Trouble, for starters. It is improbable that Honda will not seek to replicate its success from the two-wheeler market into the electric vehicle market. Its existing supplier network, courtesy of its near 1 million annual sales volume, will give it an unparalleled advantage in terms of localising as many of the parts as possible to reduce the costs of its new electric offering. The parts that it cannot localise will benefit from the duty breaks available for electric vehicles in the prevailing Auto Industry Development and Export Policy (2021-26).

The policy itself is also what Sheikh believes to be the catalyst for Honda’s announcement of the BENLY-e in its current state. However, Sheikh also contends that Honda’s decision will have a positive spillover effect for their competitors, “Chinese manufacturers are set to benefit and be emboldened because customers will now inevitably believe that not only is electric the future, but that more electric two-wheelers will be coming to the market”.