“WITH RIGHT TAXATION, PRODUCTION OF HYBRIDS CAN BE SCALED UP ”

Insights into the future of hybrid technology in India from Vikram Gulati, senior VP, CSR and PR, Toyota India

Sirish Chandran: What are Toyota’s plans for hybrid powertrains

in India?

Vikram Gulati: “Toyota has been a pioneer globally in electrified vehicle technology, that refers to self-charging hybrids, plug-in hybrids, BEVs and even FCEVs. In fact the first vehicle that we brought out was the electric RAV way back in the early 1990s. It is premature for us to comment on the direct plans of the hybrid powertrains, we are fully committed towards this shift towards electrification in India. The way we move forward largely depends on volume, customer preferences and government policies.”

SC: In terms of policy, what will help accelerate bringing hybrids to India?

VG: “Public policy should target the end objective that society seeks to achieve, that is to lower fossil fuel imports, increase the manufacturing contribution to GDP and reduce carbon emissions. This requires growth in automotive space because automotive is 50 per cent of manufacturing GDP. Now you have preferential taxation for electrified vehicles over ICEs. It is sensible for India to adopt carbon-based taxation, in terms of GST that is levied on it. Better fuel efficiency captures these three key end objectives and that’s a great way to promote electrified vehicles.”

SC: Do you have any figures for what GST levels you are looking at for electrified vehicles?

VG: “According to our calculations, 18 per cent for smaller hybrid cars and 28 per cent for large ones is what we believe is the right taxation rate. This rate of taxation also demands commitment and contribution from the OEMs, because it doesn’t translate into an economically viable figure for the consumer. Our calculations show that around this taxation rate, contribution from all three stakeholders – consumer, OEM and the government is roughly one third from each. In that proportion the consumer will be able to absorb that delta of higher price owing to recovery that he can do on fossil fuel savings over a period of time.”

SC: If this GST regime were to be implemented, what timeline do you see before there is mass adoption of hybrids?

VG: “It takes two to three years for products to be introduced. There is a lead time to fine tune the vehicle for these conditions, testing, certification and homologation. But if taxation is encouraging, most players in the industry can rapidly scale up production of hybrids and this would also lead to greater investments in electrified technologies.”

SC: Currently, what components of hybrid powertrains are on the verge of localisation?

VG: “Most electric powertrain parts are imported. Whether it’s the motor, cells, battery, or the controller, most of these imports are from a particular country, and we have geopolitical considerations and sensitivities around that now.”

SC: What critical volume is required for these investments to be put in for hybrid or electrified powertrains?

VG: “People talk about ‘giga scale’ and the government also spoke about setting up four or five gigawatt plants totaling up to 50 gigawatts. That’s the kind of scale you need for cell manufacturing. Similarly for motors and electronics. The other way of looking at this is policy signalling. If that is right, OEMs can calculate the volume accordingly.”

SC: If an agreeable GST regime was implemented now, and if two years later we see mass adoption of hybrids, what reductions in terms of oil and component imports, and CO2 emissions reductions, are we looking at? VG: “Mid-size EVs require anything between 35-40kWh battery packs while hybrids need 1.2-1.8kWh batteries. So almost 15 to 20 times reduction in terms of battery size. Fossil fuel imports can be reduced to anything between 35-50 per cent on a tank level basis. When you look at these parameters, it becomes clear that hybrids are better options in terms of import. For carbon emissions, the ‘wellto-wheel’ approach is a real parameter. Source of energy generation in a country has to be factored in, whether it is renewable, fossil fuel or coal based. The efficiency of the plants and transmission losses have to be factored in. When you take these into account, there are studies done by Indian Institute of Science (IISc), and International Energy Agency (IEA) that say that for India, carbon reduction on a well-to-wheel basis will be much better for strong hybrids.”