Electric Vehicles (EVs) are the way forward, be it personal transport, shared mobility, or first and last-mile connectivity or delivery. However, for a new industry to thrive over something that was seen as the norm for the last 100 years and above, there are a set of unique challenges and opportunities EV makers need to either overcome or seize.
In a fireside chat on how the industry has come a long way in recent years and the way forward, Arun Malhotra, Auto Industry Expert and former MD of Nissan Motor India spoke to Chetan Maini, Co-founder and Chairman of Sun Mobility at the First & Last Mile Mobility Conclave 2022 hosted by The Financial Express.
Among the various segments, the electric two-wheeler space has seen the maximum growth in terms of pure numbers, while three-wheelers are recovering from the Covid lockdowns. However, for the first time the electric three-wheeler have seen a strong growth and have outsold their ICE counterparts. In the passenger vehicle segment, Tata Motors dominates EV sales with the Nexon.
Chetan Maini says, “The demand today is much more than probably what the industry can supply, because of the battery and Chip shortages.”
However, Arun Malhotra pointed out the numerous subsidies and tax waivers for EVs that are helping EV makers price their products at par with their ICE counterparts. He queried what if these benefits are taken away at a point in time since the government also needs the revenue that is collected in the form of taxes?
Maini explained how the industry can be supercharged in the next 18 months before the FAME 2 subsidy comes to an end. “There will be a little bit of delay, for example, battery manufacturing, it’s a major cause has been moved to India. Now the new PLI scheme for ACC (Advanced Chemistry Cell) has been announced. But it will take 24 months for companies to adapt, and probably another year for them to ramp up. It will be a three-year process before costs of batteries can start to become globally competitive in India.”
He adds, “The volumes have to go up to drive down costs tremendously. If the industry is still at 4 per cent, in this area, it needs to be at 20 per cent levels for cost recombinant.” The Chairman said that a combination of the volumes, the PLI and ACC schemes coming in would help reduce cost, along with new business models.
Touching upon the growth of CNG vehicles and flex-fuel vehicles, Malhotra asked Maini to share his perspective. “From an Indian policy point of view, it needs to think short term, midterm and long term. Even if electrification accelerates, which it will to around 30 to 40 per cent, by 2030, India will still have a base of 200 million vehicles. Flex fuel will make that existing vehicle cleaner, and the option of using CNG will make it even cleaner in a shorter duration. Hydrogen may have a role in transportation with long-distance vehicles like trucks. Each of them has to co-exist for us to have the right energy bucket. But clearly, electrification is the big piece that you’re seeing which is very important for the country,” added Maini.
Watch the link below for more details on the conversation between Arun Malhotra and Chetan Maini at the First & Last Mile Mobility Conclave 2022.