Tehran Municipality Sees Potential in Electric Motorbikes

EghtesadOnline: Tehran Municipality is of the opinion that electric motorbikes could be a part of the solution to the overcrowded capital’s worsening air pollution.

News ID: ۷۸۱۴۹۴

24 January 2018

With 2,600 premature pollution-related deaths every year, Iran is among the top five countries in terms of air pollution mortality. Motorcycles are a major nuisance in the capital and contribute terribly to the toxic air that for years has closed down schools and offices at irregular intervals and filled hospital beds.

The deputy mayor for transportation affairs says that the TM will offer incentives for purchasing electric motorbikes, Financial Tribune reported.

“TM is developing a scheme to replace gasoline-powered motorbikes with electric two-wheelers. Loans at low or zero interest rates are to be offered to at least 2,000 people in the initial phase,” IRNA quoted Mohsen Pourseyed Aghaei as saying.

The deputy mayor however concurred that such schemes have no chance of success “unless the government pays its due share and creates the necessary infrastructure, namely setting up of charging stations.”

>Previous Failures

The municipality under the previous mayor Mohammad-Bagher Ghalibaf introduced a similar scheme to offer 25 million rials ($550) in loans to electric bike buyers. The interest rate on the loans was 18%. However, the plan, like many others introduced by the controversial mayor and his minions, failed simply because no one was interested in what the TM was offering.

Now the present mayor, Mohammad Ali Najafi, who took office in the summer, says that scheme fell on the wayside as it was not affordable.

“A fossil fuel powered motorbike costs 15 to 20 million rials ($330 to $440) while the cheapest electric bike in the local market sells for 100 million rials ($2,200).”

After the loan amount was reduced from the price of the electric motorbike, the customer needed to pay the remaining upfront, which for the cheapest e-bike translates into the equivalent of $1,650 down payment.

It merits mention that the main target market of motorbikes in Iran relates to the low-income strata. The nominal monthly minimum wage (announced by the government)   for the current fiscal, ending in March, is 9.3 million rials ($204).  Simply put, those who need the electric bikes cannot afford it. Period.

Furthermore, Mayor Najafi says, “The prices of imported electric bikes are excessively high and people cannot afford them. A task force has been set up for negotiating with domestic local motorbike makers to see whether their factories can be retrofitted for manufacturing e-bikes.” The mayor notes that such plans demand government-backed investment and meaningful state support.

The sales manager of local motorbike producer Tolidi Niro Mohareke Mohammad Ghorbani, says his company can produce electric bikes but does not see a dynamic market to make such an enterprise economically feasible. “Low demand and lack of charging stations has made us think twice.”

>Charging Stations

TM has also announced plans to set up an EV charging station in District 12. Details are not known, but if constructed this would be Iran’s first commercial charging station.

Energy Ministry’s Niroo Research Institute has designed and constructed a solar-powered electric vehicle and motorbike charging station. It does not offer services to the public yet and is only part of a trial project. Two vehicles and two motorbikes can charge simultaneously at the station.

The organization’s EV department director Ali Bakhshi is of the opinion that, “The local electricity distribution network can offer services to e-bikes but powering electric vehicles would be a major challenge.”

NRI’s priority is to acquire the technology needed for charging stations and create infrastructure needed for powering such stations.

>Beleaguered Industry

Some 2.5 million carburetor-equipped motorcycles ply Tehran’s almost permanently clogged roads. Since they are not equipped with catalyst converters and release toxic fumes directly into the environment, the amount of fumes each of the motorbikes spew into the air equals that of eight vehicles with Euro 3 emission standards. The added problem is that such bikes are fuel-intensive.

As if this was not enough, the outdated motorbikes are the number one culprits in creating noise pollution. It is estimated that in Tehran, motorbikes have a 25% share in air pollution and cause almost half of the noise pollution in and around the city of 12 million people.

The production of carburetor-equipped motorcycles has been banned since September 2016 following a government directive. However, the polluting two-wheelers are still sold in the market.

Aware that the official ban was coming into effect, some manufacturers produced and registered unusually large numbers of carbureted motorcycles earlier to make an extra buck.

According to Abolfazl Hejazi, director of Iran Motorcycle Manufacturers’ Syndicate, 800,000 carbureted motorbikes were produced in the last fiscal that ended in March 2017 while market demand was below 500,000.

“Last year’s motorbikes are still being sold and are expected to remain available in the market until March,” he added.

With their warehouses filled to the rafters with the polluting motorcycles, local producers have significantly cut down output. During the nine months to Dec. 21 motorbike production plummeted 81% with 73,934 units rolling out of local factories.