The Government’s focus on reducing pollution and providing a clean air environment through tighter emission norms (with the implementation of Bharat Stage-VI from April 1, 2020) and encouraging electrification (FAME 2 Policy) is certainly the way forward as it would also pave the way to have a positive impact on our biggest payout in oil.
I have tried to capture my perception on how each of the business segments would evolve, the kind of challenges the industry will face and how the Government/Industry /Academia can jointly work together to increase the pace of adopting cleaner mobility.
For the three-wheelers segment, I would like to classify e-rickshaw, e-auto (passenger carrier and goods carrier). We all have witnessed the surge of e-rickshaws. But in this segment except for two large players like Kinetic Green and Mahindra & Mahindra, the manufacturing is dominated by many small players.
These e-rickshaws are low speed and powered by small DC motors and use Lithium-Ion Batteries.They currently prevail in the market to cater to transferring passengers within a short route.
On the other side, e-autos are high speed and manufactured by big players and cater to passengers on a longer route. I personally see going forward post Covid-19, the e-auto (goods carrier) taking a big leap forward as large retail players like Amazon, Flipkart etc will increase their online business. However, this can be true for traditional three-wheelers too. Rather, in a post Covid scenario the shift towards tried and tested technology will be more acceptable.
In a nutshell this segment would be the first to be headed for total electrification.
With respect to buses we have seen the introduction of e-buses within the cities and all the major players like Ashok Leyland, Tata Motors, Volvo Eicher, JBM have entered into this segment and once the charging infrastructure / longer battery life is ensured, this segment is poised for a good growth as they enter into the intra-city segment.
As far as two-wheelers are concerned most of the existing large players are working on the introduction of electric two-wheelers. Some new entrants with a focus on manufacturing only on electric two-wheelers have also entered into the indian market. I personally feel that electrification of scooters would prevail over motorcycles and in this segment I foresee by 2025 about 10 percent of the total vehicles produced would be electric.
With respect to passenger cars in India we are still gradually working on this and the high cost of ownership will be the key driver for a delayed introduction/demand.
Here are some of my recommendations:1. For two-wheelers or three-wheelers, if we have to bring down the cost of ownership by 30 to 50 percent, swappable batteries should be the answer. Private entrepreneurs/government owned fuel stations should come forward to set up this facility. It should primarily work on the concept of how much of energy cost a consumer pays vis-a-vis the present fuel cost/litre and in this way one can increase the demand.
2. Cars – I am totally surprised why the Govt did not encourage hybrids. It would have been a great transition/natural hedge to fully electric. In Japan 20 percent of cars sold are hybrids and in India since the Japanese manufacturers represent over 60 percent of the total cars sold and they had the hybrid products, the Govt should have encouraged it as it would have given time for creating the charging infrastructure /manufacturers to gain experience.
I still believe it is not too late and citing by example, Toyota since 1997 has sold over 15 million hybrids and as what one understands has contributed to reduction of 120 million tonnes of Carbon Dioxide emissions. According to me the production of electric cars would only constitute 20 percent of the total production by 2030 and we must look at alternate fuels example- fuel cells /hydrogen as needless to say this would have a direct impact on our oil spent and at the same time have a positive impact on the reduction of emissions/better efficiency.
Suggestions for the Government
Indian Automotive world relies heavily on other countries and multinationals to set up shop in India for technology and Indian companies barring a few, generally taking the easy route of joint venture and technology transfer but to be honest we are very poor in investing money and talent in R&D.
The Govt has to encourage this to make India self reliant on R&D but sad to say if we don’t do this we may have FDI in this sector but would permanently stall our own initiatives/drive on Innovation with respect to Research & Development. Depicted below are the few areas which the Govt should concentrate on:1. Work with Industry/Associations/Fuel stations to introduce Swappable Battery Solutions for three-wheelers and two-wheelers.
2. Create the necessary battery charging infrastructure first for Cars before announcing policy directives, reference from other countries France, Germany etc and in the meanwhile rethink of fostering the manufacturing of Hybrids in India and needless to say work on introduction of alternative fuels.
3. Thrust On R&D
1) Batteries are the most expensive component of an electric vehicle and India does not have Lithium reserves and it needs to import this. Do we want to have a high import bill just like fuel? I would suggest that if we truly want to inculcate the Make In India concept, then the Govt along with Industry, Associations and Academia (IIT’s/others) must come together to work on other battery solutions where raw materials are present in India and we can bring down the cost of ownership.
2) Electronics- Even as we go ahead and this becomes an integral part of an EV system this has been a very weak area in Indian manufacturing and we are heavily reliant on other countries ie Japan, Korea, Taiwan ,China for critical technology components ie Sensors, PCBs, Traction Motors & Controllers etc.
In a nutshell the Govt must quickly make a task force, work with industry through its Associations, Academia and look on working on key projects as defined above.
It can create just like many other countries a Grant Structure /consortium to encourage companies engaged in R & D initiatives on Electric Vehicles /Components.
The above will go a long way in ensuring our drive of introduction in Cost Competitive EVs in India and perhaps make India a Global hub in certain segments of EVs in times to come.