‘Further increase on import duty on EV components required to ensure a level playing field’

Today the biggest challenge that many electric vehicle manufacturers are facing is that they cannot guarantee their battery pack for more than 3 years.

‘Further increase on import duty on EV components required to ensure a level playing field’
Sanjeev Vasdev, Managing Director, Flash Electronics
Sanjeev Vasdev, Managing Director, Flash Electronics

Flash Electronics, which has changed its brand identity after 30 years, going from electrical and electronics to machining, announced two major collaborations during the Auto Expo: 2020 Components. The company which is now completely BS6 ready will be focusing on battery pack, battery management, controllers, onboard charging and active battery management system under these two new collaborations. Express Drives had a detailed interaction with Sanjeev Vasdev, Managing Director, Flash Electronics on the sidelines about the new innovations that the company is doing and electric mobility in India. Following are the edited excerpts.

What technological innovations are Flash Industries working on in order to reduce the cost of a battery pack?

At the Auto Expo: 2020 Components, we have launched our battery pack. This battery pack is quite compact and is removable. This allows you to remove the battery from the two-wheeler, take it home and charge it like your mobile phone. This battery pack has out a new active battery management system, which gives an enhanced life of nearly 500 cycles per life of the battery pack. This active balancing system is far better than the passive systems currently being used. This system actively balances each and every cell of the battery, automatically giving them an optimal charge at the same level. This helps in giving an enhanced battery life. The testing for the same was done in French laboratories, taking a year to complete. And these tests have revealed an additional 34 per cent battery life.

Today the biggest challenge that many electric vehicle manufacturers is facing is that they cannot guarantee their battery pack for more than 3 years. If any finance company to get interested in financing a particular electric vehicle, they look at minimum 4-5 years of battery life in order to be secure on the loans which they are giving. The battery constitutes nearly 50 per cent cost of the EV today. And if the EV battery fails tomorrow and the customer does not want to change it, the finance companies have nothing, they can only take a non-functional two-wheeler back home, with no resale value. So with our active BMS, we are giving 500 additional cycles of battery life, which will be quite exciting for any customer and it would be hugely beneficial for the OEMs too.

What were your expectations from the budget? Were your expectations met?

Frankly, I don’t think much has been done by the government. Besides the reduction of the corporate tax which was done prior to the budget, I don’t think there has been something substantial. As an EV component manufacturer, one thing which is beneficial for a company like us is that they have raised import duties on EV components. That is definitely a plus point. But I think the import duty increase is a very small step. The government should promote local manufacturing. And they should further increase the import duty for EV components, make it mandatory for people even if they want to be in this Indian field. They should have a level playing field with us and try and compete with us at the same time. This would give an advantage to the local industry.

Do you see electric vehicles driving the growth going into the future?

The EV growth story will be driven by two important aspects. One, through government regulations and this will be predominantly in the three-wheeler industry. For instance, Delhi has a polluting environment and hence, Delhi’s three-wheelers, according to the regulation, run on CNG which is an eco-friendly fuel. So unless the government regulations are put in place, people are not going to shift. This is because is there is a regulation in place, then the cost difference is not going to matter as an electric vehicle is going to be the only option available in the market.

Another important sector in the electric vehicle growth story in India is going to be that of the two-wheeler. Here, the transformation is not going to be through regulations. Once two-wheelers become BS6 compliant, they are already eco-friendly and meet the norms set by the government. In this segment, the choice of the customer plays a very important role. Now whether the customer decides to pay the extra for an electric vehicle in this space is anybody’s guess. However, I believe that in the next four to five years time, we will see five to seven per cent of the market converting to EV. By this time, the local manufacturing would have reached a substantial level, through which cost reduction will be achieved. And then, it would make more sense for the OEMs to promote electric vehicles.

At the moment, I believe that all the OEMs currently selling electric vehicles in the two-wheeler space are selling them at a loss. Even at Rs 1 lakh or Rs 1.20 lakh ex-showroom prices, I do not think that OEMs are recovering the cost. That said, the cost recovery will start taking place once the volumes increase. In the next 4-5 years, a seven to eight per cent share of EVs in the two-wheeler market in India, which sells 20 million units annually would mean 1.5 to 2 million units.

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First published on: 20-02-2020 at 12:42 IST