A Honda Motor Co. Sports EV concept vehicle stands on display at the Auto Expo 2018 held in Noida, Uttar Pradesh. (Photographer: Anindito Mukherjee/Bloomberg)

Electric Vehicles In India: It’s Early Days

At a time when air pollution and vehicular emission have are being debated at highest levels, it is no coincidence that most automakers participating in Auto Expo 2018 gave electric vehicle technology pride of place, even if it mainly consisted of displaying concepts.

The overarching theme, if it can be called that, through consensus, seemed to be electric mobility and its future in one of the world’s biggest automobile markets.

And while most of the automakers present don’t currently have a vehicle that is commercially available, they all weighed in on the debate. While some have decided to take the plunge, and believe that investing in technology now will bear dividends in the future, others are more circumspect, waiting for a clear policy from the government.

The government, which is expected to launch an electric vehicle policy, has an ambitious target for 2030—40 percent of new vehicles sold will be electric.

It is clear at this point that infrastructure to support a broad-based shift to electric technology is lacking. And, while one might think that this needs to be set up before electric vehicles are launched in a big way, most automakers believe differently. Many told BloombergQuint that the development of technology and setting up of infrastructure must go hand in hand.

There are, however, questions that need to be answered.

Mercedes Benz, which displayed a concept of its electric vehicle at the Auto Expo 2018, is “hypothetically” ready for a launch in India in 2019. Roland Volger, managing director and chief executive officer of the company’s division in India, said the first concern is that the government hasn’t yet come out with a clear policy on electric mobility; particularly, there is a question about where the energy for an electric vehicle push will come from.

I mean specifically what are the plans where the energy will come from. Can this energy be cleaner, and it should be cleaner than the existing vehicles, which at the moment it is not. You still have challenges with regard to production of electricity in this market specifically.
Roland Folger, MD & CEO, Mercedes-Benz India

The other issue, Folger believes, is the treatment of used batteries. Lithium-ion batteries if not disposed off properly can seriously damage the environment.

“And third of all, is there some support (from the government), because these vehicles in the ramp up curve will be very costly--definitely luxury segment vehicles,” said Folger.

Is A Public Fleet The Required Catalyst?

One suggestion to speed up the acceptance and use of electric vehicles is for the government, particularly state transport utilities, to start using a fleet of them. India’s commercial vehicle manufacturers already have products that can be used.

But a key issue here is the size and capacity of the batteries used on these buses. These batteries are not currently manufactured in India.

The question of the range that the batteries offer leads to another one—the rate at which they can be charged. At the Auto Expo held in the National Capital Region, there were two schools of thought. One said fast-charging facilities were the solution. Another, said the more effective option would be to set up the necessary infrastructure to be able to swap batteries.

Chetan Maini’s Sun Mobility, in partnership with Ashok Leyland, displayed a solution that the two entities said would soon be commercially available. With a live demonstration, Maini explained that his automated process could swap a used battery with a charged one in three minutes.

Vinod Dasari, the managing director and chief executive officer of Ashok Leyland, said each battery swapping hub would be able to change 300 batteries per day.

Going forward, Maini expects that the process will be made more efficient and will use renewable energy.

Mahesh Babu, the chief executive officer at Mahindra Electric Mobility, believes that fast charging is the comfortable option. This is perhaps true for most of the vehicles that M&M currently offers. It currently sells the only electric passenger vehicle that is commercially available in India—the E2O Plus.

It will soon bolster its portfolio of vehicles with an electric version of its compact sport utility vehicle, the KUV 100, and an electric three-wheeler.

Babu, however, conceded that no solution—fast charging or battery swapping—should be discarded before they are tried first.

Learnings From Europe

If there is one region that can be said to have somewhat embraced electric mobility, it is Europe. In Norway, over half of the vehicles sold are electric. So, what’s worked in Europe that hasn’t yet been tried in India?

Eric Feunteun, the global head of Renault’s electric division, believes there are five ‘bricks’ that can build a solid foundation for electric mobility. Renault, along with its partners, is the market leader for electric vehicles in Europe, with a market share of over 50 percent.

The first one is clearly the financial benefit. Currently, he believes that electric vehicle technology is too expensive. And, while the price gap between electric vehicles and the conventional internal combustion vehicles will go down with time, the former needs support from the government.

The second brick is equally important, according to Feunteun. Non-financial benefits can increase adoption simply because they make it more convenient to own an electric vehicle. Here, a separate lane for electric vehicles, preferential parking at malls and work places, a waiver on toll payments, free charging, and other similar benefits could prove to be a big push for the cause of electric mobility, he said.

Thirdly, investments need to be made to create private infrastructure; that is facilitation of charging at home and at the office space--the two places where people spend most of their time. Automakers in Europe are toying with the idea of providing housing societies with charging infrastructure to incentivise them to buy electric cars.

The next brick, according to Feunteun, is a strong public charging infrastructure. Here, the government is starting to make some moves, with NTPC Ltd. having announced that it is setting up a network of charging stations for electric vehicles. However, as BloombergQuint found out when travelling from Gurugram to Noida via the national capital in an electric vehicle, these aren’t easily found.

Finally, Feunteun said, there need to be big public fleets of electric vehicles to show people that such technology is feasible. In France, the national post office has the largest electric vehicle fleet in Europe.

Should Hybrid Be The Logical Stepping Stone?

The roll out of the goods and services tax brought with it a major conversation in automotive circles about the future of mobility. A higher tax for hybrid vehicles led many to put their plans for such vehicles on the back burner, and some even interpreted the move by the government as a clear preference for fully electric vehicles.

Maruti Suzuki India Ltd., the market leader in passenger vehicles in India, is of the firm opinion that hybrid vehicles are the next logical step. This, according to CV Raman, senior executive director in charge of engineering, is because the use of batteries for hybrid vehicles will reach scale if the sale of such vehicles is propagated.

That in turn will reduce the cost of batteries, which will lend itself to the eventual rise in use of electric vehicles.

Suzuki, in partnership with Toshiba and Denso, is currently setting up a lithium-ion battery plant in Gujarat at an estimated investment of Rs 1,100 crore. The company is also investing in a treatment facility for used batteries, said RS Kalsi, senior executive director - marketing at Maruti Suzuki.

The batteries developed in the plant will power both hybrid and electric vehicles in the near future. Maruti Suzuki intends to launch an electric vehicle by 2020.

Whether electric mobility will take off will depend on a number of factors, particularly adoption of the technology by the end user. Driving such a vehicle can be a little disconcerting for a user that is used to driving a vehicle with an internal combustion engine. Electric vehicles make little or no noise.

One passenger vehicle head at an Indian automaker joked that his team was considering the use of a chip that will replicate the sound of a diesel engine to ease the shift to electric vehicles. Who knows, it might just work.