The buzzword for the Automotive Industry in 2018 is electrification in the country and on a global scale. In a myriad of contrasting voices the big question is when are these electric cars, buses and motorcycles really going to make it to the roads, and if so many have already been built, where in God's name are they? The question gains gravitas if you consider that almost every auto-show be it in India or around the world has seen OEMs showcasing electric vehicle concepts as their mainstay, the common theme though seemed to be centred around vague production dates and even vaguer launch timelines.
Meanwhile closer to home, Transport Minister Nitin Gadkari started the year saying that he would accept nothing less than 100% electrification by 2032 and nothing less, threatening to bulldoze any OEM that did not comply. Later the government appointed think tank in charge of sustainable development models like Electrification said that they would be happy to see 30% electrification by 2032. This seeming inability of the government to reach a timeline consensus will work to the benefit of OEMs, as we shall explain further into this article. We will try to explain what exactly is behind this delay and try to chart the course of the next decade or so, as Electric vehicles will implement themselves across the segments.
Lithium is a limited resource. To put that in perspective according to the Handbook of Lithium and Natural Calcium, "Lithium is a comparatively rare element, although it is found in many rocks and some brines, but always in very low concentrations. There are a fairly large number of both lithium mineral and brine deposits but only comparatively few of them are of actual or potential commercial value. Many are very small, others are too low in the grade." What this means, in other words, is that we are never going to be able to run all the cars in the world with lithium batteries on a sustainable basis. Something that most automakers will not tell you, considering up unto now there is no real alternative scalable battery technology. Not that it won’t emerge and with the amount of money being spent every day on new materials something will emerge soon, that is a given. It's just not here right now.
Passenger fleet vehicles like buses, taxis and last-mile transportation units will be the first to go electric. This part of the transformation will happen over the next two years leading up to a 100% electrified fleet in the latter half of the 2020s. To the layman, it might seem strange that we can electrify a bus that runs between Manali and Rohtang, one of the toughest routes in the world and can’t electrify a small car for people to commute in. The truth is both as it can be done. The former can be done at scale and remain profitable, while the latter is unlikely to achieve scale and be profitable or even practical. A bus like the BYD-Goldstone buses that run between Manali and Rohtang, has a fixed route and operates within the confines of two fixed points travelling the same exact number of kilometres on each run. This means that range-anxiety can be easily overcome, and charging infrastructure can be easily implemented at each of the stations that the bus runs between. For a passenger car, neither of these are true, the entire value proposition of personal transportation lies in free movement between any two points at YOUR convenience. If that is limited then your Electric car is limited, and sans public charging infrastructure, the car loses its point entirely.
The second reason for this is the fact that electrification allows for a bus to drop a large amount of weight considering that there are less moving parts in an electric vehicle. In turn, this allows buses to be loaded to the teeth with batteries without compromising the weight from a convention ICE (Internal Combustion Engine) Bus. This allows for a more practical range. As of now, a hub-and-spoke model seems to be the only practical solutions for EVs in the country. This can be applied to large fleet operators like Ola and Uber as well, provided the infrastructure is properly set up.
Electric Two and Three Wheelers
This process has already begun with a few electric two-wheelers already on sale in India and more following shortly. In major cities, two-wheelers are mainly used for last mile connectivity or point-to-point commute. A small electric motor paired with a range of 60-80 kms is easily doable for most companies in this space in present times. In the initial phase, expect primarily electrified scooters with focus on high-end feature and user experience. Motorcycles will follow soon as they fundamentally require more range and more power. This will be the second major phase that will start later this year and see strong growth in the at the turn of the decade.
Amit Gupta, President & CEO – Group Automotive Business, Hero Motors said, ‘’It’s not rocket science that electric vehicles are the future. Modern advances in electric technology are making electric powered vehicles closer to mainstream reality than they ever were. If the progress continues at the current pace, the conventional internal combustion engine powered vehicles may soon go extinct. In terms of the Indian society, a push for the adoption of electric vehicles is the need of the hour. We, at Hero, are completely prepared for the future and are working along with our partner Hewland, UK on e-transmission from design to cost for OEMs in EU.’’
Three-wheelers are perhaps the most prevalent Electric Vehicle in the country right now. The electric auto/ rickshaw is also called the ToTo for some undefinable reason. Most of them are fabricated locally around standard lead acid batteries and Chinese electric motors. Their range is pitiable and the ride from the stiff locally fabricated chassis is often appalling, but it gets the job done and provides a cheaper alternative from standard auto rickshaws for point-to-point transport. We see some standardisation in the sector over the coming years, where aggregators will bring better-tested versions of the electric Toto to various urban locations. With safety being a key concern for such vehicles we hope for regulations being imposed on their quality and safety.
Luxury Cars & Mass Market Cars
We recently spoke to a components manufacturer based out of India that supplies parts to German and Japanese OEMs for their electric motors and cars. According to their estimations, 2020 will be the date where at least 6 manufacturers will bring electric cars to the Indian market, starting a hockey stick growth that will stay right through the decade. These 6 offerings are likely to be positioned as flagship premium products, thought-leaders if you will. Up until this point, as per our understanding, Electric cars will still need to be charged at home, although we foresee major metropolitans showing the first signs of charging infrastructure around public places like malls, coffee shops and convenience stores. This growth will continue till a feasible architecture is in place, and then and only then, will India have its first truly mass-market electric car. As per our calculations, this should be no later than 2025.
For this to happen, though, the need of the hour is good governance strong policies that will ensure that this transition that involves millions of lives and hundreds of thousands of jobs be done smoothly. Such that we can keep up the strong growth in the automotive industry that currently makes 7% of our annual India’s Gross domestic product and develops an ecosystem of sustainable mobility!