Schaeffler will be carbon neutral by 2040: Keen on hybridisation

In a recent interaction with Express Mobility, Sanjeev Saxena, President, Automotive, Schaeffler India, shared the company’s plan on hybridization of the Indian automotive space and to go carbon neutral by 2040.

Express Mobility: Share some numbers on the pace of electrification in India in the years to come

Sanjeev: We have made our estimates based on the powertrain scenarios and geographical conditions. So, there is a North American model, European model, Chinese model and of course the local Indian scenario too. In the mass market car segment, by 2030, electrification will still be in the single-digit. We at Schaeffler see a good share of 25-35 per cent of hybridization, whereas the rest of the market will be still ICE. Since all hybrids will also have an ICE, there will be continuous improvement in the tech of internal combustion engines.

On electrification, every company thinks very differently, but these numbers that we have shared are based on the customer inputs and the market that we know. And this is what we at Schaeffler believe. Everyone is talking about government, but our point is that the government has done quite a bit by announcing FAME subsidies, etc. Moreover, people are now questioning 100% electrification and are looking for alternatives. Hybridization is a very strong alternative, but it still has certain limitations. In terms of two-wheelers, the market penetration will be much higher. In fact, by 2025, we should be having around 4 million electrified two & three-wheelers. There will be a very little scope of hybridisation in two & three-wheelers. Ideally, the shift will happen from ICE to EVs.  

The government has announced 10-year-old diesel cars can now ply on roads if they retrofit and transform into EVs. What does that announcement change, and what role will that play in these numbers, which you just spoke about?

An old vehicle is an old vehicle. Just imagine how many people would want to drive a 10-year-old vehicle. Due to these new retrofitting policies, some people are betting big on it. I believe there might be some changes in these numbers, however, there won’t be any major change. We have seen people converting scooters to rickshaws, and there is a market for it. Similarly, for e-rickshaws or small three-wheeler commercial vehicles, it might happen. If there will be any market for retrofitted mass-market cars? I doubt it.

I believe at Schaeffler, you have solutions to convert ICE cars to hybrids?

Converting normal ICE cars to hybrids, I don’t recommend that because there are way too many changes required. Hence, The real impact of hybridisation you won’t get. But yes, we at Schaeffler do have pretty good solutions as far as hybridisation goes. Also, we need to calculate the total cost of ownership for around 10 years. Today, EVs have a claimed battery life of 8 years, and they are around 50-60% of an electric car’s overall cost. So, what will happen to its resale value and second-hand market? In hybrids, the battery cost is less than 1/4th, and it still has an option to continue to run on fossil fuel.

How easy is it to get a Schaeffler hybridization module and put it into an existing platform or model?

That is possible. We will have to make certain changes, but it can be done. We will have to look at what kind of hybridisation or to what extent are you looking at. However, if we talk about retrofitting, as of now, it looks a bit far from reality.

Now, since it’s possible, what percentage of price increment is expected to fit a basic level hybrid to an existing car?

It will depend on the size of the car, the kind of battery solution we are looking at, but approximately 20-25% increment will be a reasonable number. In the long run, if you talk about the total cost of ownership, it makes sense.

In the next 3-4 years, a lot of carmakers are coming up with mass-market EVs in the price range of Rs 10-15 lakh. Do you see we could skip hybridisation and jump to EVs?

There is certainly a possibility that it may happen. A lot of Japanese and Chinese carmakers have hybridisation as a part of their strategy, but Indian manufacturers are against it, and they say they will go directly to electrification.

In terms of electrification or hybridisation, what is the biggest challenge or difference in the Indian market, as compared to other developed markets?

The challenges and journey are almost the same. It all depends on when you start and how quickly you are able to do it. India has made very good progress in the last four years.

There is a lot of focus on ‘Make in India’, so how much of engineering and development of Schaeffler solutions happen in India?

Complex technologies are usually done elsewhere. India is the best-cost country for software, design, and certain manufacturing activities.

By when do you see for mass-market EVs, local manufacturing can be done here, save for the battery cells?

This is just a matter of time. In the next 4-5 years, we might see manufacturing happening in India too. When we talk about batteries, the trouble is that the investment required is quite high, initially, subsidies could have to be given and eventually a free market will come into play.

What kind of business prospects are you looking at in the next few years? How much could the business from India account for in terms of global revenue or percentage growth you are looking at from the Indian market?

As of now, 5% of our total revenue comes from India, and we think this will go up. We are growing at a pace of 2-2.5 times more than what we are growing at some other places.

India aims to become carbon neutral by 2070. And if we want to achieve it, we will find various solutions, and the hydrogen economy is something which we are keeping a very keen eye on both from an Indian’s perspective as well as Schaeffler’s perspective.

Schaeffler will be carbon neutral by 2040, and we will be using 100% renewable energy by 2024.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express Telegram Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.