Electric vehicles are energy efficient, substantially less polluting than the existing ICE (Internal Combustion Engine) vehicles, are almost noiseless and require much lesser maintenance compared to the conventional fuel operated versions. Realizing these advantages, the world is moving towards global deployment of 20 million electric vehicles by 2020. Is India ready to welcome and adopt this future?
To discuss and comprehend the many challenges faced by Indian manufacturers and consumers, The Blue Circle organized its Roundtable discussion on Electric Vehicles-How Prepared is India. The panel comprised of industry experts, CEOs and CXOs from across the country.
It included stalwarts like – Sohinder Singh Gill (CEO, Hero Electric), Pavan Vaish (Head of Operations- India/SA, Uber), HE Adam Bukowski (Ambassador- Poland Embassy), Andrzej Stuczynski (Third Secretary – Economic Section, Poland Embassy), Sanjiv Kumar Jain (Group CITO, Spark Minda Group), Anmol Singh Jaggi (Director, Gensol and Blu Smart), Samrathjit Singh (COO, Trontek), Ankur Agarwal (CEO, Lectro (Hero Cycles Electric Division)), Priyank Dahanukar (CEO, Electric Vehicles India), Kanv Garg (Director-Renewables & Electric Mobility, Ernst & Young), Rajesh Singh (Founding Partner, EV Advisory Group), Vinay Piparsania( Global Consulting Director-Automotive, Counterpoint Research), Piyush Gupta (CEO, Lithion Power), Bhupinder Pal Singh (CEO, Sunbeam Auto), Manav Kapur (ED, Steelbird International), Rakesh Malhotra (Founder, SAR Group (Luminous Power)), Chandrashekhar Bhide (Co-Founder – Lithion Power), Muktesh Lekhi (Owner, M & M Machine Craft), Dr. C R Prasad (Chairman & MD, Everest Power), Pankaj Bhardwaj (Country Manager South Asia, Avery Dennison), Prabal Chakraborty (MD, Boston Scientific), Anupam Prakash (Board Advisor, Blu Smart and Guidant Group), Ramesh Lakra (CEO, Quanteon Powertrain), Dr. P Meganathan (MD, Tapams Group), Sunil Goyal (MD, Yournest Ventures), Mira Saraf (Business Manager, Windsor India), Ashok Maheshwari (Founding Partner, AKM Global), Harmeet Chopra (AVP-Corporate Sales, Optima Insurance), DR Goyal (CTO, Rahinfotech). The session was moderated by Mr. Pavan Choudary (MD, Vygon-India, Tedx Speaker & Coach).
Advances and Roadblocks
The Indian government has laid out incentives for mass adoption of Electric Vehicles by giving subsidies through its FAME 1 and FAME 2 schemes.
Fame 1, Vinay Piparsania underlined, was launched to motivate faster adoption of EVs. Though Fame 1, through its subsidizing of EV 2-wheelers did help in their faster adoption but the subsidy did not cover 4-wheelers or hybrid vehicles. Also it came with riders such as engine size and indigenization factor. To cover up the shortcomings of Fame 1, FAME 2 was launched. Unfortunately, it brought in other handicaps such as battery size, subsidy only for fleet and not for individuals.
Kanv Garg and Vinay asserted that the Government is pushing for a swift transition from BS6 to Electric Vehicles. This knee jerk implementation may result in affecting India’s position as a leading global manufacturer.
Pavan Choudary cautioned that Indian auto companies are hugely invested in ICE vehicles; and if there is a now a sudden shift towards electric vehicles, all the investment made in the former will go for a toss. He further added that there are about 2000 moving parts involved in an IC engine vis-a-vis 20 in an electric engine; and the manufacturing of these ICE vehicles and their maintenance provides employment to many. A sudden and mass migration to electric vehicles would lead to substantial displacement of manpower and businesses.
Also considerable government revenues are generated from taxes levied on petrol and diesel. Is there a way in which the government continues to receive its dues while India moves towards electric?
Subsidy vs No Subsidy
Piyush Gupta said that consumer led adoption (depending on consumer demand) is better than state led adoption (through government subsidies). Elaborating the point, he said that the Chinese EV market has grown with practically no government subsidy and the same goes for the Indian mobile phone industry, pharmaceutical industry and now the e-rickshaw industry.
Aman Jaggi, who has recently acquired a fleet of 70 EV cars for his Blu Smart ride hailing platform, endorsed Piyush. He explained that with existing ICE manufacturers having to bear additional cost to be BS6 compliant, the cost advantage which IC cars had over EV cars is reduced, making EVs more competitive. Also since EV is right now at the start of technology curve, things will only get better – the battery will get better, its cost will come down, charging time will improve, and payback will get shorter.
Why Policy Support is Required for EV adoption
Sohinder Gill agreed with Piyush on e-rickshaw success but pointed out that for personal use, fleet or public transport market to grow well in next 5-7 year, government subsidy would be required. He cites the example of Ather in which 500 crores have been invested and which could sell only 450 scooters last year.
EV 2 wheelers, according to Manav Kapoor, do not face a charging issue. The EV scooter has an average battery capacity of 50-60km, whereas the maximum a person travels in a tier 2/tier 3 city is 36kms a day. Then why are Indians hesitating in adopting EV 2 wheelers?
Sohinder explained that this is because it requires steady government support at the seeding stage, in the form of mandating, interventions or incentives, so that the threshold is reached and exponential growth starts. Not in insensitive spurts like MNRE, FAME 1 and now FAME 2.
Also the customers’ earlier experience of EV scooters not delivering on good performance nor increased savings plus lead batteries needing change after just 12 months of use, has created skepticism among people regarding EVs. Sohinder believes that once there are around a million EVs on the road, and their owners start broadcasting the advantages, the ripple effect would lead to an increase in 2-wheeler sales.
But, he added, to get to the first one million sale price parity is required along with good performance. To provide price parity, the Indian manufacturer compromises on quality which is not good for the industry. Therefore, policy support is necessary.
What is Hampering EV 4-Wheelers Adoption
Rajesh Singh feels it is the lack of choice in 4-wheelers offered by auto companies which is hampering large scale adoption; A home grown Tesla like technology company is needed to disrupt the consumer market.
Rajesh Singh and Ramesh Lakra both agreed that government riders like 50% Make in India, subsidies only on certain battery capacity and only for fleet operators are hindering EV 4 wheelers market gaining momentum in India.
Bhupinder Singh Gill expressed grave concerns about existing auto component manufacturers not ready for electric vehicles yet. Parts which are used in IC engines or hybrid models are too heavy for EVs. EVs need lighter components and the large component manufacturers are still at the ideation stage for this product mix and therefore getting funding is proving to be a big challenge.
Micro Mobility and Shared Infrastructure
Ankur Agarwal hoped that the industry is prepared that the ownership of cars per family would fall with increase in on-demand car and driver aggregators, rental services and micro mobility.
Pavan Vaish shares that for EV 2-wheeler adoption, the product needs to improve for the pillion rider as cost and performance is not up to the mark. The moment there is a pillion rider, the speed drops dramatically.
Charging Infrastructure and Battery Solutions
Under FAME 2, government is offering 1,000 crore subsidy on setting up charging stations. However, Kanv cautioned that setting up charging stations is not a financing or a tech problem, it is a real estate roadblock. And this is where a city driven collaborative effort between the urban planning, transport and power departments is necessary.
Chandrashekhar Bhide stated that since almost 50% of the cost of an EV is due to the battery component, a standardized battery solution is needed for 2 wheelers and 4 wheelers.
There was also talk on battery swapping stations, in addition to charging points.
Learning From Others
C.R. Prasad drew comparison with how Indians adopted CNG vehicles with minimal government support.
HE Adam Burakowski shared the Polish experience with electric vehicles. The Polish government inherited a very polluted country from the communist regime. Through its government driven €500 million Clean Transport Development Project, the country today is much less polluted.
The Way Forward
Kanv explained that to take electric mobility off the ground the industry and the government need to focus on 3 main areas – Installation of charging points for EVS on a city level, domestic manufacturing – with special emphasis on the battery capacity, and transitioning of public fleets and shared mobility towards electric.
While China may be the largest producer and exporter of Electric Vehicles and its components, India, with a push in the right direction, can soon be welcoming mass adoption of Electric Vehicles.