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Terra Motors And Asia’s Electric Motorbike Horizons

I love the feature-length documentary Revenge of the Electric Car, which centers around the return of electric cars, as seen with Tesla. So when I met Shingo Hayashi, I was delighted. He’s the general director in Vietnam for Terra Motors.

Terra Motors manufactures luxury and mainstream electric motorbikes for Asian markets. Mostly centered in Japan, the Philippines, and recently Vietnam.

The company was started in April 2010 by Toru Tokushige. After working in Silicon Valley, he returned to Japan with the dream of building a startup that would go global, as happened to major technology manufacturing companies like Sony and Yamaha. Armed with $8 million to start, he hired young energetic members like Hayashi, and experienced engineers from Honda, Suzuki, and Yamaha. He also gathered around him major shareholders like a former Apple VP, a Sony CEO, a Google Japan CEO, and a McKinsey partner. With these men around him, how could Terra Motors fail?

But it’s passion that really lead to success. When showing off his tiny Tokyo office packed with the only 15 employees in the company, Tokushige says:

We do not pay for a large office, instead we spend money on bike development.

Terra Motors’ tiny office.

Hayashi says he used to sleep on the floor in that same office, and the team worked really hard on sales. Well, it’s paid off. By 2011, Terra Motors was already the market leader in the e-bike market in Japan and by 2012, it held 40 percent of the market. Those 15 employees? They’re in a company that manufactures 1,000 e-bikes per month.

By mid-2012, Tokushige sent two of his staff into the Philippines and Vietnam.

In the Philippines, Terra Motors is working with the Philippines government to produce 100,000 units in the next five years. Five years ago, Filipino authorities were jazzed about a new cheap Chinese electric tricycle that would replace their smoky tuk-tuks. Within months, the e-trikes broke down. Terra Motors is now coming in to manufacture quality tricycles for the Filipino government. Hayashi draws parallels with Vietnam, where the company plans to open a factory in Vietnam in September this year:

In Vietnam, a similar situation occurred with Chinese e-bikes. In 2006, e-bikes experienced a huge jump in sales. They were cheap, $300 to $500. But customers, mostly students, quickly realized that the batteries got old and you couldn’t safely fit two people on the e-bikes. Effectively, after a few months, the e-bikes would become bicycles as consumers kept using them with their dead batteries.

Thus, Terra Motors’ first strategy is to enter the luxury motorbike market, avoiding the cheaper market.

We entered Vietnam because Vietnamese people are motorbike crazy. China is too risky, Indonesia is too big, and Thailand is migrating to cars. Vietnamese people also pay a lot for their scooters and motorbikes. In Italy, home of the Vespa, our Italian colleagues were shocked to hear that Vietnamese people pay $3,000 to $5,000 for a motorbike. Here, nice motorbikes are a status symbol. So when we enter the market, we will enter with expensive luxury e-motorbikes around the $5,000 price point focusing on the rich and celebrities. We need to change the perception of the consumer around e-motorbikes.

Hayashi is confident that this will not deter Vietnamese customers. After all, as he says:

Gas is going up, and Vietnamese people are fascinated by new technologies. Despite the poor economy, we still think we can capture a significant market share.

And I can see why, the first e-bike can drive up to 60 kilometers without a charge, is beautifully designed, can plug into any outlet to charge, and allows drivers to plug in their smartphone to the motorbike’s dashboard to track speed, battery usage, and other relevant data.

Terra Motors’ next, cheaper model, will be around $1,500 to $3,000 and will be able to run 40 kilometers without a charge. Both of these models are geared towards city people who don’t have to go on roadtrips. When I asked, what if I want to take a longer trip? Hayashi replied:

Well, we’re always working on improving battery technology. Also, we’re looking at building hybrid motorbikes that can go over 100 kilometers, and cost about $1,500 to $2,000. This way, you can drive in the city on battery and drive to the countryside on gas. No company currently has hybrid motorbikes.

Tokushige’s dream is to leverage Japanese high tech to build a big global business, and at the same time to change the world. He wants to become the “iPhone of e-motorbikes” or, perhaps more aptly, the “Tesla for e-motorbikes”. And I’m all for it. I don’t want to live in a smoky city anymore – it’s bad for my health. And with the US Department of Energy pumping $120 million into creating batteries that have five times the current power, this future just might be possible.

My friend who visited Guangzhou, China, said there’s a city somewhere in the country that only has electric motorbikes. It has nice clean air. Only problem was, you can’t hear the motorbikes as they’re heading towards you. I’d say that’s not a major problem.

I should point out that I’m a big fan of Tesla, and religiously follow the work of Al Gore and environmentalists the world over. So forgive me if I’m a tad enthusiastic.


Join us at Startup Asia Tokyo 2014 this September 3 and 4. Get 25 percent off with the SuperEarlyBird code when you get tickets here. Hurry because the discount ends on June 6.

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