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Terra Motors drives brand Japan abroad

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Japan-based electric motorbike startup, Terra Motors, has been a pretty busy company over the past year, with branches opened in Vietnam, the Philippines, and in India. In addition to those, the company is partnering with dealers all around the world, just last week announcing a big partnership to sell their bikes in Nepal. Ok, admittedly Nepal isn’t the biggest of markets. But when I visited their office earlier this week, Terra Motors’ overseas sales director Koshi Kuwahara told me why it is an ideal market for an electric vehicle company like theirs. He explained: There are several aspects to deciding whether or not to enter a market, whether or not to set up the company or a factory. Yes, there is a big market in China. Yes, there is a big market in Indonesia. But we have to consider the competition, how eager partners are, and we also have to consider the government. In the country’s where we have our own branches, local governments are very eager about electric vehicles. In Nepal, the reason they are so interested in EVs, is because Nepal has the highest petrol price in Asia. From a Western point of view, the decision to go…

Terra Motors showroom in Nepal
Terra Motors showroom in Nepal

Japan-based electric motorbike startup, Terra Motors, has been a pretty busy company over the past year, with branches opened in Vietnam, the Philippines, and in India. In addition to those, the company is partnering with dealers all around the world, just last week announcing a big partnership to sell their bikes in Nepal. Ok, admittedly Nepal isn’t the biggest of markets. But when I visited their office earlier this week, Terra Motors’ overseas sales director Koshi Kuwahara told me why it is an ideal market for an electric vehicle company like theirs. He explained:

There are several aspects to deciding whether or not to enter a market, whether or not to set up the company or a factory. Yes, there is a big market in China. Yes, there is a big market in Indonesia. But we have to consider the competition, how eager partners are, and we also have to consider the government. In the country’s where we have our own branches, local governments are very eager about electric vehicles. In Nepal, the reason they are so interested in EVs, is because Nepal has the highest petrol price in Asia.

From a Western point of view, the decision to go electric is often made with consideration to the environment. But Kuwahara showed me a list of countries, along with corresponding fuel prices and GDP per capita, noting that in places where gas prices are relatively high and GDP relatively low, it really has nothing to do with saving the earth.

It’s all about saving money.

Crowded Terra Motors press conference in Kathmandu
Crowded Terra Motors press conference in Kathmandu

A huge gap in import duties for conventional versus electric bikes means that Terra Motors can sell for about $100 cheaper than their gas-guzzling competition. And they’re very optimistic about their prospects in Nepal, where gas and diesel prices have spiked in recent years [1]. The press conference for their opening in Katmandu attracted about 150 people from most major media, a reflection of that optimism and enthusiasm.

Katmandu is a small city spanning about 15 kilometers edge to edge, says Kuwahara, so a Terra Motors bike, which can get about 45 kilometers from a full charge is more than adequate for getting around. And the city’s notorious air pollution, which is among the worst of all the worlds cities, means that they will be very much welcome by the local government.

The startup is aiming to sell about 1000 bikes in the next year, and has already sold 500 from this new dealership. While most of the market conditions are great for Nepal, it is still a pretty tiny market with about 200,000 motocycles sold per year. But at this early stage for Terra Motors, it’s a perfect place to expand without overextending.

Currently the company’s headcount sits at 27, but they are hiring staff for local offices.

The Japan Advantage

Perhaps the most interesting aspect about Terra Motors, in my view, is how greatly it benefits just from being a Japanese company. Kuwahara explains that they are not the first company to push electric bikes in the markets where they operate, but coming from Japan carries credibility that serves them well. Many of their competitors quickly developed a bad reputation due to poor battery performance or some other quality issue. He adds:

[Those companies] just imported from China and then assembled bikes, and sold them. People were interested in electric motorcycles, but they were not satisfied with that quality. We are the only company manufacturing electric motorcycles from Japan. And people know Japanese cars andproducts are good. If some Japanese company manufactures some electric vehicles, then it must be good.

Even as many of Japan’s electronics giants flounder, the nation’s reputation for quality seemingly endures, with overseas business partners approaching cooperation without reservations. As I have written previously, this is an obstacle that China is still struggling to overcome, and will be burdened with for quite some time still.

Beyond Asia

In addition to its overseas offices, Terra Motors now has dealers in Singapore, Turkey, Mexico, Italy, Egypt, and Nigeria. And Kuwahara himself has been busy trying to expand that list in recent months:

I went to Africa for two months, with stops in Ethiopia, Tanzania, Kenya, Nigeria, Egypt, South Africa. I’m a bit baked now. (laughs) My colleague went to South America, Guatemala, Peru, Columbia, where there are many three wheelers. So we are focusing on some other markets beyond Asia where we can sell our three wheelers.

Will we see Terra Motors bikes in the US anytime soon? Kuwahara tells me that America is not such an interesting market for them right now, since the motorcycle market is not so big and restrictions on bikes differ from state to state.

Asia certainly looks to be their primary focus, and with solid progress in India as well. The company was very well received when recently presenting at India’s biggest auto show, Delhi Auto 2014. Like Katmandu, Delhi is plagued with a pollution problem, so the Indian government is especially keen to increase the amount of electric vehicles on the roads, shooting for a 300% increase by the year 2020.

We look forward to watching Terra Motors as it grows outwards. It’s certainly one of the most interesting young Japanese companies out there, one that has wisely adopted an international strategy from the very start.

terra-press meet photos¥DVS140206_2188

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terra-press meet photos¥DVS140206_2271

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  1. This according to some figures that Kuwahara presented, showing 2012 gas and diesel prices that are more than double those of a decade ago. Recent media reports reflect this as well.  ↩

Is Japan’s Terra Motors the Tesla of Asia?

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See the original story in Japanese. Terra Motors is a Tokyo-based startup manufacturing mid-range and high-end electric bikes for Asian markets. The startup held a press briefing yesterday and unveiled a brand new model called the A4000i. The new model’s big feature is connectivity with iPhones. When you set your handset on the bike’s handlebar, it will keep you updated with real-time metrics during driving, such as fuel efficiency, tracking routes, and power consumption. With this new function, the startup aims to help courier companies become more efficient in their delivery work. Their strategy is to give consumers in Asia a high-end offering, so the new bike only supports iPhone, as opposed to other smartphone devices. Its price will be around 450,000 yen (about $4,500) in Japan, and will be about the same in other Asian countries. This means the bike will not be cheap for consumers in the region, so the startup hopes that their competitive edge can be in branding rather than pricing. For the company’s mid- to long-term vision, it plans to use data collected from users to develop a new service in partnership with big data solution companies. They’re still preparing a navigation feature as well….

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Terra Motors’ A4000i

See the original story in Japanese.

Terra Motors is a Tokyo-based startup manufacturing mid-range and high-end electric bikes for Asian markets. The startup held a press briefing yesterday and unveiled a brand new model called the A4000i.

The new model’s big feature is connectivity with iPhones. When you set your handset on the bike’s handlebar, it will keep you updated with real-time metrics during driving, such as fuel efficiency, tracking routes, and power consumption. With this new function, the startup aims to help courier companies become more efficient in their delivery work.

a4000i-interface
Metric monitoring interface (under development)

Their strategy is to give consumers in Asia a high-end offering, so the new bike only supports iPhone, as opposed to other smartphone devices. Its price will be around 450,000 yen (about $4,500) in Japan, and will be about the same in other Asian countries. This means the bike will not be cheap for consumers in the region, so the startup hopes that their competitive edge can be in branding rather than pricing.

For the company’s mid- to long-term vision, it plans to use data collected from users to develop a new service in partnership with big data solution companies. They’re still preparing a navigation feature as well.

In this space, we’ve already seen a trend in the integration of mobility and data, such as the Google/Waze acquisition and Toyota’s new big data mash-up service.

Terra Motors has developed a prototype for the new model, and plans to start mass production this winter. They expect to sell more than 100,000 bikes by the end of 2015, and they’re currently inviting potential retailers and distributors from around Asia to get in touch.

Terra Motors was founded back in April of 2010, and it received investment worth of 221 million yen (or about $2 million) back in 2011. The investors include Mizuho Capital and several angel investors such as ex-Sony and ex-Google Japan CEOs.

The startup’s CEO Toru Tokushige spoke of his aspiration to be Asia’s answer to Tesla Motors in the region’s electric markets. But he’ll have a big challenge ahead.

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Terra Motors’ CEO Toru Tokushige at press briefing on Thursday