Auto mak­ers may go slow on EVS

While some wait for a pol­icy doc­u­ment from gov­ern­ment, oth­ers may not launch elec­tric ve­hi­cles till ecosys­tem ma­tures

Mint Asia ST - - Inside - BSY HALLY S ETH M OHILE

In­dian au­to­mo­bile mak­ers are un­likely to for­mu­late a strat­egy for elec­tric ve­hi­cles (EVS) in a hurry al­though they re­al­ize that its adop­tion is in­evitable amid a gov­ern­ment push to switch to zero-emis­sion tech­nol­ogy by the be­gin­ning of the next decade.

While some are wait­ing for the gov­ern­ment’s in­tent to be backed by a pol­icy doc­u­ment, oth­ers are un­likely to in­tro­duce EV mod­els till the ecosys­tem ma­tures.

Util­ity ve­hi­cle maker Mahin­dra and Mahin­dra Ltd is still the only auto firm go­ing ahead with the launch of EVS to cap­i­tal­ize on its first-mover ad­van­tage.

Most launches in the ini­tial phase will be fo­cused on pub­lic trans­port seg­ment, Pawan Goenka, man­ag­ing di­rec­tor at the firm, said dur­ing the launch of firm’s first pas­sen­ger e-rick­shaw on 8 Septem­ber in New Delhi.

India, the world’s fifth largest auto mar­ket, is poised to be­come the third largest by 2020 and the gov­ern­ment has un­veiled a vi­sion to make the coun­try an all-ev mar­ket by 2031 in a bid to re­duce de­pen­dence on fos­sil fuel and achieve zero emis­sion. Ad­dress­ing auto in­dus­try ex­ec­u­tives on 7 Septem­ber at its an­nual con­fer­ence, Amitabh Kant, chief ex­ec­u­tive at gov­ern­ment think-tank NITI Aayog, said ow­ing to its low per capita own­er­ship of au­to­mo­biles, India is uniquely po­si­tioned to pur­sue a very dif­fer­ent model of growth as it will not have “to strug­gle to re­tire the large fleet of tra­di­tional in­ter­nal com­bus­tion en­gine (ICE) and re­place them with elec­tric ve­hi­cles.”

High cost of bat­tery, which ac­counts for al­most three-fourth of the cost of an elec­tric ve­hi­cle, makes EVS twice as ex­pen­sive when com­pared to ga­so­line-run ve­hi­cles, and cre­ation of an ad­e­quate in­fra­struc­ture, among other factors such as ac­cep­tance of such ve­hi­cles, are some of the chal­lenges that the EV mar­ket faces.

India has close to 500 charg­ing points and a city like Delhi alone will need 350,000 points to meet de­mand, Shivan­shu Gupta, part­ner at con­sult­ing Mckin­sey and Co. said in a pre­sen­ta­tion dur­ing the an­nual con­fer­ence of auto com­po­nent man­u­fac­tur­ers’ as­so­ci­a­tion on 8 Septem­ber. “There has to be an eco­nomic case so that who­ever makes an in­vest­ment is able to re­cover it fast.”

But Kant is op­ti­mistic. “Sev­eral fore­casts are pre­dict­ing the price per unit of elec­tric car will be equiv­a­lent to that of a ga­so­line car by 2025. That will be the tip­ping point,” he said.

“India is in the midst of big­gest dis­rup­tion, so it can’t be busi­ness as usual for in­dus­try and the gov­ern­ment,” he said.

While top of­fi­cials at lo­cal arms of global firms con­ceded “it’s an idea whose time has come”, they are not buy­ing into Kant’s op­ti­mism and are un­likely to get to the draw­ing board un­less the vi­sion and in­tent is backed by a pol­icy frame­work and a long-term road map.

“It’s a di­rec­tion that is cor­rect but the steps need to be clearly enun­ci­ated and worked along with in­dus­try,” said C.V. Raman, ex­ec­u­tive di­rec­tor, re­search and de­vel­op­ment at Maruti Suzuki India Ltd, point­ing out that Maruti has done tech­nol­ogy projects on EVS and show­cased prod­ucts at Com­mon Wealth Games in 2010. “Even Suzuki has the tech­nol­ogy. But the point is whether it would make eco­nomic sense,” he said, adding if it’s based on im­ported tech­nol­ogy, it won’t work.

Oth­ers are more scep­ti­cal. “They are say­ing the price of the bat­tery can be re­duced by lo­cal­iz­ing it. Even in coun­tries such as China and Ja­pan where lithium-ion bat­ter­ies are pro­duced for many years, they haven’t been able to meet the rea­son­able price tar­get so far,” said Yoichiro Ueno, pres­i­dent and chief ex­ec­u­tive at Honda Cars India Ltd.

Mi­noru Kato, pres­i­dent and chief ex­ec­u­tive at Honda Mo­tor­cy­cle and Scooter India Pvt. Ltd, agreed. “Honda Ja­pan has the EV tech­nol­ogy know-how for 20 years,” he said. But still it hasn’t been able to come up with a model that can meet the price and per­for­mance pa­ram­e­ters, he added.

Lone ranger: A file photo of Mahin­dra Reva e20. Mahin­dra and Mahin­dra is still the only auto maker go­ing ahead with the launch of elec­tric ve­hi­cles.

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