A regulatory change in a draft government notification has prompted objections from Yulu Bikes Pvt. Ltd. over proposed changes to the regulation of low-speed electric vehicles in India.

On August 21st, the Ministry of Road Transport and Highways (MoRTH) issued a draft notification proposing to substitute Rule 2(u) of the Central Motor Vehicles Rules (CMVR), 1989. The rule defines the parameters under which low-speed battery-operated vehicles are exempted from classification as conventional motor vehicles, thereby exempting them from registration, third-party insurance, helmet mandates and driving licence requirements.

While the draft retains the maximum speed limit of 25 km/h and an electric motor power limit of 0.6 kW (600 watts), with a 30-minute power rating and other parameters, it removes the unladen weight limit, which previously restricted these exempt vehicles to a maximum weight of 60 kilograms.

Yulu Bikes, a shared micro-mobility operator based in Bengaluru, has filed formal objections with MoRTH regarding the removal of the weight limit. The company stated that removing the mass limit could affect road safety, disadvantage domestic manufacturers complying with existing regulations and affect the livelihoods of gig workers who rely on low-speed platforms.

Yulu is also preparing to raise the issue through the Startup Policy Forum. If the ministry formalises the draft without physical safeguards, the company's leadership has indicated that legal action remains a possible recourse.

Yulu has raised more than US$ 198 million in equity funding and is backed by investors including Bajaj Auto, GEF Capital and Magna, among others. In the organised market, it competes with companies such as Zypp Electric and Alt Mobility, among others.

The physics of regulatory arbitrage

The industry's objection centres on the relationship between vehicle mass, speed and collision energy. The severity of a vehicular collision is influenced by kinetic energy, which is dependent on mass and velocity.

"The reason why weight was put was essentially speed at 25 kilometers, something of 60 kilo versus something of 80 kilo... mass into velocity," explained RK Misra, Co-founder and President of Ecosystem Partnerships at Yulu. "The impact will be much more if it's a heavier vehicle. You get hit by a truck at 10 kilometers per hour or you get hit by a Maruti at 10 kilometers per hour, the impact will be very, very different."

Under the previous framework, the 60-kilogram weight limit constrained the size and structural capacity of exempt vehicles, keeping their risk profile comparable to that of a traditional bicycle. With the removal of this limit, manufacturers and grey-market importers could introduce heavier tubular-steel frames with dual seating and larger cargo beds, provided the vehicles pass a dynamometer homologation test that electronically restricts their maximum speed to 25 km/h.

However, the Indian EV market is already facing issues involving aftermarket tampering. According to Misra, a significant number of imported completely knocked-down (CKD) low-speed bikes feature hidden, reprogrammable motor controllers.

"Today, a lot of Chinese illegal bikes are running. Though they have a 25 km/h limit, they have put a switch; when they put the switch on, it can go up to 40 or 45," Misra noted. "The RTO guy says, 'Sir, when we check, it is 25,' but then they are running at 45. Now, weight is something which they can't change with a switch. It's not software-controlled. That's the only thing which is physically verifiable."

Removing the mass limit would eliminate a physical restriction that cannot be altered through software. According to the industry's concerns, this could enable the creation of unregistered 'ghost fleets' comprising heavier vehicles operating at speeds of up to 45 km/h without structural safety checks, brake homologation for higher masses, or insured and licensed riders.

Global precedents vs local disconnect

The concept of a low-speed exemption stems from global conventions established by bodies such as the International Transport Forum (ITF), along with measures adopted by local governments to provide accessible mobility. However, international regulatory frameworks generally link speed exemptions to physical constraints such as vehicle mass or pedal requirements.

In the European Union, the Electrically Power Assisted Cycles (EPAC) standard exempts vehicles from type approval only if they have a maximum continuous power output of 250W, cut off electrical assistance at 25 km/h and require the rider to pedal. The requirement for pedalling places a physical constraint on the vehicle's design and mass.

Vehicles exceeding the EPAC criteria fall under the UNECE L-category framework, including L1e-B two-wheel mopeds, which requires type approval, licensing and insurance while also applying mass limits. For example, the mass in running order can be limited to 270 kg. Similarly, ASEAN countries such as the Philippines impose maximum speeds of 50 km/h or minimum speed thresholds on various L-categories to address risks associated with heavy, slow-moving vehicles in traffic.

Evaluating the government's rationale

MoRTH has not issued a formal explanatory memorandum alongside the draft. However, industry analysts suggest that the ministry's intention may be related to streamlining the existing homologation process.

Testing agencies such as the Automotive Research Association of India (ARAI) have encountered difficulties certifying vehicles that marginally exceeded the 60 kg limit, weighing 61 kg or 62 kg because of manufacturing tolerances or the integration of heavier Lithium Iron Phosphate (LFP) battery chemistries.

By moving towards performance-based criteria centred on speed and power, the government may be seeking to adopt a regulatory model that places greater emphasis on electronically governed performance.

However, operators argue that this approach assumes a level of technological enforcement that is not readily available on Indian roads. Traffic police cannot easily interrogate a proprietary motor controller during a traffic stop to verify software-imposed speed limits, whereas a dual-seat, 120 kg vehicle operating without a number plate can be identified through physical inspection.

The judicial threat to gig economy

The potential economic implications extend to India's quick-commerce sector. Platforms such as Swiggy, Zomato, Zepto and Blinkit rely heavily on a transient workforce of rural migrants who move to metropolitan areas without driving licences or sufficient capital to purchase conventional motorcycles.

Yulu currently has an estimated 35% share of the shared micro-mobility market serving this economy, facilitating between six and 10 deliveries every second nationwide with a fleet of more than 50,000 compliant vehicles. Misra said the sector provides livelihoods for approximately 600,000 gig workers.

The industry's concerns include increased competition from low-cost imports and the possibility of judicial intervention. If heavy, tampered ghost fleets enter the market in significant numbers and contribute to an increase in serious pedestrian or rider fatalities, civil society groups could file Public Interest Litigations (PILs) seeking a ban on the low-speed two-wheeler industry.

"There will be bikes without numbers running around without helmets, causing accidents. Somebody going to the Supreme Court (calling for a ban against micro-mobility industry) and saying these low-speed bikes are bad, without realizing who caused it," Misra warned.

Proposed remedies and next steps

In its formal submission to MoRTH, Yulu outlined specific regulatory measures intended to retain the low-speed exemption while accommodating technical developments. The primary recommendation is to reinstate an unladen weight limit of 60 kg for Battery Operated Vehicles under Rule 2(u). The industry has also suggested introducing a limited tolerance to accommodate modern battery packs.

If the government proceeds with removing the weight criterion, Yulu has urged the implementation of alternative physical safeguards. These include a strict single-seat mandate prohibiting pillion riders, an explicit load-carrying capacity limit and mandatory physical verification mechanisms at the point of sale to prevent the integration of heavy passenger frames. As the statutory 30-day objection window closes, the automotive sector is monitoring the proposed regulatory changes.