Long road for EVs, clear policy needed to cross speed breakers

While the government think-tank Niti Aayog envisages an all-electric vehicle fleet by 2030, Union minister Nitin Gadkari has given an ultimatum to the industry to either join the bandwagon or else be "bulldozed".

The billion dollar question is can the country do it?

There is no easy answer and the auto industry wants a clear policy road map to make an attempt.

Already sulking for being forced to leapfrog to BS-VI emission norms by 2020 in a short span, automobile manufacturers feel the road to electric vehicles (EV) is fraught with speed breakers in the absence of a clear policy.

"Electric mobility is the future and we see that transition approaching... This transformation to EV has to be strongly driven by a clear road map, which defines the transition plan of the government with proper timelines,"

Mercedes Benz India CEO and MD Roland Folger told PTI.

Hyundai Motor India Director, Marketing and Sales, Rakesh Srivastava said the industry will be ready as per government direction, "however, a clear road map with infrastructure solutions is required to help car manufacturers for future planning".

The industry players are of the opinion that as EV technology is evolving at a rapid pace, the government needs to consider issues like charging interfaces before finalising the infrastructure.

"There is a foreseeable risk in adopting current solutions, which may not remain the technology of future," Folger said.

Moreover, the transition to EV will call for significant investments which will be over and above the estimated spending of around Rs 1 lakh crore that the auto industry would have to make in upgrading products to comply with several upcoming regulations related to emissions, safety and fuel efficiency.

According to a report by Niti Aayog and Rocky Mountain Institute, India is required to set up a minimum of 20 giga factories to produce batteries at an investment of USD 100 billion for its transition towards 100 per cent EV fleet by 2030.

The report also points out that lack of clear long-term policies and technology uncertainty are hindering investments.

Folger said, "While defining the future of mobility, we shouldn't adopt an 'either or' approach; rather we advocate the coexistence of existing and future technologies."

The auto industry is unanimous that the gap for electric vehicles must be bridged by intermediate technology such as hybrid vehicles to support building charging infrastructure and reduce 'range anxiety' of customers.

"While we applaud the government's initiative to promote electric vehicles, it must be appreciated that encouragement of strong hybrid vehicles will eventually be the stepping stone for faster adoption of pure electric vehicles," Toyota Kirloskar Motor Vice-Chairman Shekar Viswanathan said.

Folger said plug-in hybrids have to be considered in the transition plan as these will not only offer 100 per cent electric mobility for a considerable number of kilometres on a single charge, but also support in building charging infrastructure and bring down range anxiety.

"For the industry to mature, a staggered approach is much needed to establish EVs in the initial transition years and attain a certain desired threshold level," he added.

Offering a different perspective, Hero Electric, which produces electric two-wheelers, said that in order to successfully move towards EVs, the government will have to adopt a carrot-and-stick approach.

"Carrot, where is it due in the form of subsidy for R&D and infrastructure and tax rebates and they will have to stop combustion engines from coming into certain areas," the company's MD Naveen Munjal said.

According to the Niti Aayog-RMI report, opportunity of USD 300 billion could be created in India for EV batteries by 2030.

As individual companies chart out their strategies, the country's largest carmaker Maruti Suzuki India said its approach will not be limited to bringing products alone as EVs require consumer acceptance and a ubiquitous charging infrastructure.

"We will discuss with government and related stakeholders to create an ecosystem, putting up end-to-end infrastructure to support the vision of the government," a company spokesperson said.

Plans to set up a lithium ion battery manufacturing facility through a joint venture with Toshiba Corporation and Denso entailing an investment of 20 billion yen (nearly Rs 1,200 crore) are the first step in that direction, the spokesperson said.

Honda Cars India Ltd (HCIL) said it is also in the process of formulating an EV strategy for the Indian market, but more study needs to be done before it comes up with exact schedules and model details.

"In India, we still don't know to what extent we can expect hybrid vehicles to grow and how much electric vehicles are likely to increase," HCIL Senior V-P Marketing and Sales Jnaneswar Sen said.

On the other hand, Swedish firm Volvo Cars is pressing ahead with its global strategy of bringing to market an entire range of hybrids and fully electric cars from 2019.

"India will get an array of products that reflect this strategy. Volvo Cars' global ambition is to have 1 million electric and electrified cars on the roads by 2025. India is destined to play an important role in making this number," Volvo Auto India Managing Director Charles Frump said.