ELECTRIC CAR ALL CHARGED UP
How manufacturers -and not just of cars are gearing up for the
massive opportunity that's up for grabs in the electric vehicles space in wake
of the govt's big 2030 dream of only electric cars plying in India
I have been asked this question ever since I joined Mahindra
& Mahindra (M&M) in 1991. We're still alive and thriving against
competition.“
The question: How does M&M stack up against competition? The
person answering: The chairman himself. “We're marathon runners...like our
vehicles.Never underestimate us,“ says Anand Mahindra. The context: The
opportunity in one of the next frontiers of automobiles, electric vehicles
(EVs), where M&M is distinctly a first mover but where competition of all
hues -from Elon Musk's Tesla to homegrown startups -is a charging point away.
Mahindra Electric, which makes models such as the eVerito and
e20, sells some 100 EVs every month.That's a small start, but an ideal
launching pad for the opportunity ahead to scale up volumes.
Consider: The government will soon float tenders for battery
swapping and charging stations, as well as battery and cell manufacturing, in
its bid to achieve power minister Piyush Goyal's dream of having only electric
cars on Indian streets by 2030. Early this month, the stateowned Energy
Efficiency Services (EESL) invited global bids for 10,000 electric sedans that
will run up to 150 km on a single charge.
“Whether the future will come in one year, five years, 10 years
or 15 is not certain, but it will happen. No automaker can ignore EVs,“ says
Pawan Goenka, managing director, M&M.
EVOLUTION OF
THE EV
Rate of EV adaptation will depend on battery prices coming down,
driving range going up, charging infrastructure coming up, more and more
automakers launching multiple EV models, aggregators realising the value of EVs
in their fleet, government incentives continuing and on the government
catalysing the use of EVs, Goenka said. “We were perhaps ahead of our times in
bringing EVs to the country when the market was not quite ready. As volumes
pick up, we will be ahead of others with reliable and affordable vehicles.“
Mahindra is also working on swappable batteries, where charging
stations can replace smaller batteries appropriate for buses and three-wheelers.
Currently, batteries are more of the entry-level 48V and 72V variety, which
will be increased to 380V and 650V. M&M will launch the high-end
powertrain, 380 volts-plus, in the higher end range of cars, said Goenka.
Through joint ventures and licence agreements, these batteries
can be sold to other potential manufacturers in the EV space. Goenka expects to
sell 5,000 vehicles in 18-24 months, from the current levels of 100 a month.
M&M has invested about `500 crore in the EV business and recently committed
an additional `600 crore for the next two to three years. It currently imports
cells, packages them into a battery and fits it on to the vehicles.
“The first-mover advantage lies less in the technology, which is
constantly evolving, and more in the data we have collected. Right from the
first customer of Reva, we have information on driving patterns and driver
behaviour and requirements that is worth its weight in gold,“ explains
Mahindra.
M&M is conducting pilots with online cab aggregator Ola
while corporate EV fleets in Delhi and Bengaluru are being conducted for better
understanding and technical and commercial viability. Over eight to 10 years,
taxi aggregators will be all EVs, as it makes more economic and environment
sense for cities, reckons Goenka. It's not just M&M responding in a big way
to the government's 2030 vision. A transport ministry official requesting
anonymity said more than 30 auto companies are working on different kinds of EV
projects.
Tata Motors, in collaboration with its U K subsidiary Tata
Motors European Technical Centre (TMETC), has been working on an electric Tata
Tiago, which is expected to borrow heavily from the Bolt BEV, the electric
version of the Bolt. The Tiago could be the first passenger car from the domestic
auto major to have an electric motor, say sources close to the project. The
auto major is also testing electric commercial vehicles and has started test
drives for the first batch of electric buses under the Marcopolo brand in
Shimla. It's also considering an electric version of the Nano as otherwise the
small car is no longer viable.
Bajaj Auto is working on electric three-wheelers
as part of its EV strategy.
Nissan which along with alliance partner Renault is
“the worldwide leader“ in EVs, according to chairman Carlos Ghosn -will
undertake a pilot project in partnership with government bod ies and the
private sector players to assess the viability of EVs in India.The best-selling
five-door hatchback Nissan LEAF will figure in this plan. Nissan LEAF has sold
over 270,000 units globally, says Arun Malhotra, managing director, Nissan
Motor India (NMIPL). For several months in 2017, the best-selling car in Japan
was the Nissan Note ePower, an EV with LEAF technology and a small,
highly-efficient petrol motor that charges the battery from inside. “So you
don't need any external charging infrastructure. We believe the ePower could be
a fantastic gateway to accelerate the path to 100% EVs for India,“ says
Malhotra.
Hero Electric, which has been selling electric scooters for
eight years now, feels traction for EVs is increasing. “EVs are catching on now
because of reducing lithium battery prices and increased subsidies,“ says
Sohinder Gill, global CEO, Hero Electric. For instance, there is a subsidy of
`17,000 for Hero's 250 watt lithium battery scooter, and of 22,000 for the 1200
watt lithium battery model, explains Gill.
Electric scooters with portable lithium batteries have a
substantial advantage over the lead battery ones. These include easy and fast charging,
low running costs, reduced maintenance and reliability. This, says Gill, is
making such models an option worth considering for a two-wheeler buyer.
The 12% GST on EVs, combined with a `1 lakh benefit under FAME
(Faster Adoption & Manufacturing of EVs) scheme and a road tax waiver in
some states, has come as a big relief for manufacturers of clean energy
vehicles. Meanwhile, the falling cost of both solar power and energy storage in
the form of lithium ion batteries (LiBs) is also driving adoption. This shift
is being driven by government policy and technological advancements and this
disruption has already impacted industries in the US, Europe and China.
Globally EV sales have risen eight times in the US and 66 times in China since
2011; this is attributed to falling LiB costs (battery costs have fallen by
more than 80% since 2008 while battery density has increased more than five
times over the same period) and a move towards cleaner fuel, according to a
recent Ambit Capital report.
It's not just carmakers who are exploring EV opportunities. The
Sajjan Jindal-led JSW group, which has power, steel and mining operations, will
diversify into EVs; it aims to roll out its first such vehicle by 2020. JSW
Energy will manufacture EVs, electrical batteries and energy storage systems
and charging infrastructure. It is scouting for a technology partner in EV
space, as well as for a supplier for the electric powertrain.
Stanford economist Tony Seba recently published a futuristic
forecast of a potential doomsday scenario for a number of traditional
industries that use petroleum and coal as a source of energy. Specifically, he
said no more petrol or diesel cars, buses or trucks will be sold anywhere in
the world in eight years.The entire market for land transport will switch to
electrification, leading to a collapse of all prices and demise of the
petroleum industry.
Such predictions are just the impetus the EV sector needs, along
with rapid technological progress. For instance, the moving parts in an EV are
much lower than in a conventional car. Seba claims in his report that an
internal combustion engine drivetrain contains about 2,000 parts, while for an
EV it's just 20.
The Society of Manufacturers of Electric Vehicles estimates
20,000 electric two-wheelers and 2,000 electric cars were sold in fiscal
2016.That's less than 1% of total annual vehicle sales. High capital costs
-battery costs account for 30% -lack of charging infrastructure and the fear of
running out of battery are some factors in the way of mass adoption. All that,
however, will change sooner than later. As Mahindra, the eternal optimist, puts
it in the M&M context, “It's a seamless evolution of our core mobility
business.“
Lijee Philip
Aug 29 2017 : The Economic Times (Mumbai)
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