BSVI will be the death of small diesel cars and EVs could be cheaper than petrol cars by 2025: Mayank Pareek, Tata Motors - The Financial Express

BSVI will be the death of small diesel cars and EVs could be cheaper than petrol cars by 2025: Mayank Pareek, Tata Motors

Tata Motors is making good pace in the area of electric mobility and is already producing electric Tigors and has some impressive concepts also in store. So is all this indicative of a huge shift by Tata Motors in the right direction and how soon could we see electric vehicles being adopted by the masses? We got these answers and more and here are the most important takeaways if you're inquisitive about Tata Motors' plans for future mobility.

By: | Updated: June 13, 2018 5:02 PM
Tata E-Vision concept

Electric mobility has been the single most talked about and important topic in the automotive fraternity globally. India, being the fourth largest automobile market cannot distance itself from new propulsion technologies and thankfully that hasn't been the case. Apart from the usual noise being created by the government regarding electric mobility, there are private companies too spearheading India's entry into an electric era. Tata Motors is one such company that has been actively working on the development of electric propulsion technology across passenger and commercial vehicles. In fact, the company showcased the EVision electric sedan concept some time back, stunning everyone with the progress it has made in terms of design and technology capability in a short span of time. While one could argue that it was a concept vehicle and could not make it to production, there are numerous developments taking place inside Tata Motors in terms of E-mobility. We got a chance to interact with Mayank Pareek, President, Passenger Vehicle Business, Tata Motors some time back. He gave us a detailed look into the approach being adopted by Tata Motors to embrace E-mobility and here are the most important takeaways from the interview in terms of long-term developments at Tata Motors.

Mayank Pareek, President, Passenger Vehicle Business, Tata Motors

What is the vision for Tata Motors in terms of electric vehicles and what about the challenges?

Mayank Pareek: We at Tata Motors think that as a leading Indian manufacturer we should lead the country in the direction of Government's direction and become electric. Apart from the EESL contract we recently got the Indore Municipal corporation contract as well and we're proud of it. According to me, there are basically three speed breakers in the path of electric mobility.

First is the cost of the battery. Globally, in countries like China and Norway, the battery cost has been heavily subsidized by the government. The good news is that the cost of batteries is falling down every day. Two years back, it was 650 dollars per kilowatt hour but now it is around 180 dollars or 200 dollars per kilowatt hour. Prediction is that by 2020, it could be below 100 dollars.

Second is the range anxiety as even in petrol vehicles we are concerned about fuel-efficiency. In battery-powered vehicles, we see two years back the range was only 100 km. Now we can get 450 to 500 km range so as the range has increased and the range anxiety will come down. Third, is the charging infrastructure. This is a very obvious thing as when you buy an electric car, charging infrastructure is definitely needed. So I think all these three things will get covered very shortly and things will start changing in India.

So on one side where u have cars like the Tigor electric, by approximately what time will we see electric mobility turning into reality in India?

We have been taking a lot of feedback from the customers about what they like or not and then decide. The fact is that we already have electric mobility solutions with us and we have put that in our cars.

The EVision comes with a lot of technology and connectivity options so would you have to largely rely on global suppliers?

The idea is that India is one of the largest markets of smartphones so in a way we are the most electric people. The young generation is smart and the first thing that they want to do is get connected to the world. We also want to get a similar set of environment for automobiles. If you see the infotainment system, it is not just a longer dashboard, this one is differently designed. So we are working with many suppliers. Even more than suppliers, it will be more about technology that has not been invented yet. A lot of startups will also be involved.

When we talk about overall Tata Motors, there are a lot of segments where you are not present. Any plans to enter these new segments?

Today we are present in about 65 to 69 percent of the segments and that means we still have a lot to cover. So on the basis of our internal discussions that we had, by the year 2020, we will be present in 95 percent segments.

What is the kind of increment in numbers that you are looking at with newer vehicles?

More than the increment, I think that anybody who buys a car in India should think about our product. Typically, any car buyer considers 2.6 cars so our desire is that one of that cars should be from Tata Motors.

When you talk about overall market image, the challenges in the past and the recent success stories what new initiatives are you going to take for to improve further?

First and foremost is the product and our aim is to deliver technologically sound and feature loaded products. We are also working on the experience of the customers when it comes to buying a car and are in the process of revamping our networks. We are also planning to create digital showrooms that are actually updated with virtual reality features. Overall, we are working on offering a superior buying and service experience as well.

Tata H5X SUV concept at Auto Expo 2018

Any interesting incidents related to new products signal a shift in the overall experience offered to a buyer?

Once we got an interesting letter from a person. He wanted to buy a Hexa but his wife didn't approve of the same. I told the team to give them the Hexa for a week and not ask them regarding the sale. After a week, they really liked the car and the reason they gave is that the car really grew on them. As they drove the car more and more, they discovered more features of the car such as ambient mood lighting and the fantastic audio system. Later, the couple not only ended up buying the car but they also referred the Hexa to some people. This is a different type of selling experience but it's possible only if we have confidence in our car. Talking of Hexa, one major challenge was people's thought process that who will spend Rs 20 lakh for this type of car. Hence, we gave 500 cars to different segmentations of the society, say, doctors, architects, lawyers, commission agents and other people. As a doctor is closely associated with other doctors and so on, other people too got to know about the car.

Before launching the car in January 2017, we started this program in the month of September. When we finally launched the car, we already had some 5000 people committed to the car. Then we started getting feedback about the car. We started our journey with the Hexa and we earned good numbers in sales. We started selling close to 1000-1500 Hexas per month and 80 percent of it was the top-end model. We also conducted Hexa Experience centers or the HECs. We created off-road tracks in multiple places across the country for people to experience. This actually turned out to be a big success as each event used to garner at least 70 to 80 bookings.

So there are innovations that we try and keep trying every time and we love to find such type of challenges. For our upcoming cars like H5X, we will arrange even more test drives. Considering hundred and thousands of test drives, even if 10 percent of the people talk about the vehicle, that will be a lot.

For the year 2018, what all can we expect from Tata Motors?

You will see more customer-centric approaches as we live for the customers. There will be the launch of the H5X by fiscal 2019. We are also working on revamping our dealer network as well as its digitisation. Our outlets will see new technologies and new showrooms will be equipped with AR/VR technology so we are really excited for it. We are also working extensively on the BS-VI transition and the EESL tender.

With the incoming BS-VI emission norms, a lot of manufacturers have said that the small diesel cars will die out. What is your take on it?

I think it is understandable why people say that. See our data says that today our price of diesel car is a hundred thousand more than the petrol car. Once BS-VI kicks in, petrol cars will become expensive by Rs 10,000 but diesel cars could become expensive by Rs 80,000 to Rs 1 lakh. That means that the difference between diesel and petrol car will be around Rs 2 lakh. If we consider the case of a small diesel car that comes at say Rs 5 lakh and the increase of Rs 2 lakh in that will be very high. On the other hand, an increase of Rs 2 lakh in a Rs 40 lakh will be much less significant. So for bigger engines, it could still work but for smaller ones, according to me, it will be death of diesel.

Some global companies maintain that 2030 is the time when the price of electric cars will come to a point that they will start tapering and that of the conventional petrol cars will start rising. Your take?

I think it could be earlier than that, maybe by 2025. I also think that why should charging a car is different than charging a mobile. I think technology distractions are never linear. Suppose you get an electric car, which is priced similar to an IC engined car or say 10 percent more expensive. Also, consider an electric car with lifetime warranty and its operating cost being 1/10th or 1/12th of a similar petrol car. In this scenario few would buy a petrol car.

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