World over Electric Vehicles(EVs) and a supporting ecosystem is gaining pace.
In India, the incumbent government has aggressively set EV mobility targets to combat the acute air pollution problem.
However, a debate around customer adoption of this new technology is still on.
Expanding The Market
Speaking at the EVConIndia 2019, a conference meant to discuss the problems faced by the EV industry in India and the possible solutions, Sanjay Aggarwal, Managing Director-Fortum India, predicted that EVs will be the next solar. He shared further just as the energy sector has seen a major shift in last 10 years from coal or hydro based plants to solar plants, similarly in next 7-8 years he is expecting a major shift towards EVs.
Naveen Munjal, Managing Director, Hero Electric, stressed on the need to first focus on how electric vehicles can benefit the average customer and then in the longer run, the environment.
According to Rajeev Chaba, Managing Director, MG Motor India, to be a significant player in the Indian Electric Vehicle (EV) market, companies need to come into the more affordable segment, Even though nobody has all the answers relating to the EV space right, Chaba feels it is important to make a start.
Hero Electric Chief Executive Officer Sohinder Gill feels the existing OEMs are so good at what they are doing they lose the nimbleness to take advantage of the changing ecosystem. That is where the startups gain strength. If the established businesses have to get into new areas like EVs they should create a whole new vertical driven by startup culture and R&D. He also explained that the flip flop policies are one of the reasons behind lower sales of electric vehicles this year compared with previous years and believes that the Center has little role to play in the electric vehicle space.
Vignesh Nandakumar, Partner at Lightstone Aspada said that the government needs to make EV adoption simple. It should not make subsidy conditional. He also added that government subsidies should be made available to both manufacturers, service providers and consumers to boost EV adoption in India.
Other panel speakers Ayush Lohia, Chief Executive Officer, Lohia Auto, and Vinit Bansal, Managing Director, EV Motors India, believe consumer anxiety about battery performance and lack of infrastructure is pulling customers back from making a purchase.
Panelist Sameer Pandita, Director of the Bureau of Energy Efficiency (BEE) under Ministry of Power, explained that the Indian government has been pushing to develop the charging infrastructure after realising that it will mirror the growth in adoption of EVS in India and has come up with revised guidelines to spur EV ecosystem.
Amended Charging Infrastructure Guidelines
According to the revised guidelines, a phase-wise installation of network of charging infrastructure has been planned with at least one charging station in a grid of 3 Km X 3 Km in the cities and one charging station at every 25 km on both sides of highways/roads.
Apart from this, fast charging station for long range and/or heavy duty EVs such as buses and trucks, among others, shall be installed at every 100 km for the ease of inter-city travel. Also private charging at residences/offices will be permitted and any individual or entity can set up public charging point.
Atul Arya, Head – Energy Systems, Panasonic and Vinay Pipersania – Director, Counterpoint, urged the government to address the safety issues while using public areas for charging.
On the lack of government incentive for battery swapping, Nitish Arora, Research and Policy Lead, Ola Electric Mobility, while speaking on Ola’s Multi-Modal EV Pilot Project in Nagpur said that battery swapping should be encouraged by the Government as it helps in substantially reducing down time for an EV and in better usage of renewable energy.
Bansal countered that battery swapping may be viable for two and three wheelers for a short period of time but charging will make more sense in the longer period. According to him, battery swapping would mean investment in an additional battery which is outside the vehicle and this may not be viable as battery constitutes almost 40 per cent of a vehicle’s price.
Saurav Kumar, Founder- Euler Motors, shared that in his experience, lithium ion batteries run longer than lead batteries, especially for commercial vehicles where everyday battery discharge goes up to almost 90%.
Another concern voiced was the financing available for both manufacturers and consumers when it comes to EVs.
Electric vehicle (EV) technology is at a nascent stage in India and thus financial institutions are wary of investing as they do not understand the risks associated with the technology, said Bansal. “The upfront costs are very high and thus financial re-engineering is very important for e-mobility,”
Moderator, Kavan Mukhtyar, Partner and Leader at PwC, too agreed that “the key to the puzzle (expanding EV fleet) lies” in resolving financial bottlenecks. He, however, added that apart from financial re-engineering, business model renovation can also address the financial issues.
Akshay Gupta, founder of Zypp (earlier Mobycy) while agreeing with Mukhtyar gave his own company’s example about how in the initial years of its start, his boot strapped venture increased its fleet through crowd funding.
Investor vs Owner
Answering Moderator Koushik Bhattacharya, Director and Head (Industrials) of Avendus Capital on the role of investors in EV manufacturing, Sohinder Gill said that there is often a conflict between the investor and the owner. Investor’s approach is ROI driven with an eye on exit in 5-7 years whereas owner sees it as a business lasting generations. Because of investor’s ROI approach some strategic moves /certain markets/ products need to be dropped by the owner which is a tussle.
Since the technology is still at a nascent stage, there are concerns about the potential resale value of such vehicles. Even though groundwork has been laid out to bring costs down for the consumer and make an EV that could compete with traditional ones on all fronts, it would take some kind of framework in terms of reselling to attract more customers.
Despite all these issues the general consensus at the EVConIndia conference was that India, with a push in the right direction, can soon be welcoming mass adoption of Electric Vehicles.
- Can Government’s Push to Develop Charging Infrastructure Increase Demand For Electric Vehicles? – Enterpreneur
- Road for switch to e-cars not clear, say industry leaders – Times of India
- Govt’s electric vehicle policy receives mixed reaction from carmakers, industry stakeholders – Financial Express
- One danger of electric vehicles no one’s talking about – The Week
- Electric Vehicle: How Prepared is India?