Ultra Motor not restrained from selling high powered, high range and high speed e-scooters

After the disengagement of Hero Cycles and Hero Exports from Ultra Motor India, the Delhi High Court has upheld the exclusivity clause between Hero Cycles and Ultra Motors in relation to sourcing electric vehicle kits (battery, motor and controller) from anyone but Ultra Motor for a period of 180 days starting April 23, 2008.

Ultra Motor Company can be the only electric vehicle kit Supplier to Hero Cycles or any of its affiliates. As per the exclusivity clause, Hero is required to procure similar products only from Ultra Motor. Both Hero Cycles Limited & Ultra Motor India would be bound by the stipulations in Clauses 7.1, 7.2, and 7.4 of the Agreement for Technical Collaboration and Joint Marketing dated September 29, 2006.

While the High Court judgment restrains Ultra Motor from selling specified low speed e-bikes (or products of equivalent specification, as mentioned in the original agreement) the High Court’s judgment does not include any high powered, high range and high speed e-scooters which have a battery configuration of 48V/20 AH and above, which are outside the arrangement between the parties.

Vehicles running on this power pack specification are commonly known as e-scooter and e-scooter plus. Prior to disengagement these vehicles were available under the model name Maxi (48V/20AH) and Velociti (48V/24AH). The latest trend in Electric two wheeler industry is skewed towards high powered, high range and high speed electric scooter. Equivalent models of the above configuration constitute approximately 95% of the electric two wheeler industry in India.

Close on the heels of a successful FY 08 and buoyed by the ready acceptance of electric two-wheelers in India, the UK-based Ultra Motor Company (UMC) has decided to rapidly scale up its operations, expand outreach and enhance its product portfolio. As a result of aggressive dealer expansion and marketing efforts in the last financial year, Ultra Motor (in partnership with Hero Exports) had sold 22,000 electric two wheelers across the country in FY 2008.

Ultra Motor has set itself a target of 60,000 units by for the FY 09 and in order to achieve this, the company has already committed an investment of Rs 140 crore in product development, marketing and distribution. The company will launch a range of five electric two wheelers in FY09, and is also looking at vertical integration in the supply chain in India, in the form of acquisition.