SUMMARY
Important Developments From The World Of Electric Vehicles [18-24 January]
“The time is right for electric cars. In fact, the time is critical.” – Renault Chairman and CEO Carlos Ghosn.
Reiterating Ghosn’s epigrammatic statement, a government panel led by Cabinet Secretary P. K. Sinha has suggested the commercial use of ISRO’s lithium-ion battery technology for electric vehicles under the “Make in India” initiative. One of the frontrunners of the EV race in India, the Karnataka government has invited two of the country’s leading automotive companies, Maruti Suzuki and Honda Cars, to set up EV units in the state.
After Tata Power, Reliance Energy is gearing up to set up over 15 EV charging stations across suburban Mumbai over the next three months. On the other hand, the Power Ministry is in the process of releasing a set of regulations for promoting EVs in the country. Ahead of the Union Budget 2017-18, Japanese Ambassador to India Kenji Hiramatsu has called for tax relief on hybrid and electric cars, as a way to incentivise foreign automakers.
In other news, Ola is planning to enter the market of manufacturing electric auto-rickshaws with the “right partners”. To that end, the homegrown cab aggregator appointed Chinam Netaji Patro, a former executive of Bajaj Auto, as its senior director for Electric Vehicles last month.
The country’s automotive industry abuzz with activities and excitement about the upcoming Auto Expo 2018. To be held next month, the annual auto show will see giants like Renault and Maruti Suzuki showcasing their futuristic electric car concepts.
Given that so much has been happening in the country’s electric vehicle sector, we bring to you the tenth edition of the weekly EV roundups.
Ola Looks To Build Electric Auto Rickshaw Fleet In India
After the success of its auto-rickshaws fleet in Bengaluru and Chennai, homegrown cab aggregator Ola is planning to enter the market of manufacturing electric auto-rickshaws with the “right partners”. To that end, Ola has appointed Chinam Netaji Patro, a former executive of Bajaj Auto, as its senior director for Electric Vehicles last month.
Commenting on the development, an Ola spokesperson said, “Chinam is an auto industry veteran, who brings in deep understanding when it comes to assessing the right technologies for Ola and collaborating with the right partners so as to bring forward India’s EV ecosystem.”
In November last year, Ola was reportedly looking to forge an alliance with Tata Motors to launch an EV version of Nano. As per sources, the Tata Nano EV will be deployed in Delhi/NCR by the end of 2017, as part of Ola’s fleet of taxis.
Lucas TVS To Join The EV Bandwagon By 2019 With Traction Motors
TVS Group-owned automotive electricals manufacturer Lucas TVS is gearing up to launch traction motors for electric vehicles by 2019. In line with that aim, the company is preparing to set up a trail production line in one of its seven existing plants.
As per the company’s spokesperson, Lucas TVS will be expanding its EV business in a phased manner, starting with the traction motors that can be used in electric rickshaws and electric three-wheelers. Over the coming months, the company will evaluate and identify more product segments within the electric vehicles sector that could make for a profitable business.
On the government’s push to switch to 100% EVs by 2030, Arvind Balaji, Joint Managing Director a the Lucas TVS said, “Everybody is working on the technology aspect of electric vehicles. What is still not clear is the roadmap. What is the government policy to promote EVs? What is the roadmap for charging infrastructure? What is the degree of localisation in the manufacturing of EVs? In India, as opposed to other countries where electric vehicles are driven by subsidies, economic value propositions will be a key driver.”
Pure Electric Vehicles Not Ideal For India: Lexus Asia Pacific Division Head
Lexus, the luxury vehicle division of Japanese carmaker Toyota, has announced that it would continued to sell hybrid cars in India, despite heavy taxes under GST. According to Vince Socco, Executive Vice-President at Lexus’ Asia Pacific Division, hybrid vehicles, instead of the pure electric variants, are the best solution to the Indian automotive industry’s chief concerns: vehicular pollution and increasing fuel prices
Socco said recently, “Our point is that the government of India must consider a comprehensive view of electrification rather than a very specific one, battery electric. We are ready with the technology, but we are conscious about how the consumer can adapt that technology. Otherwise, it is just on paper. It is zero emission, but it is not deployable, therefore we cannot realise zero emission.”
Some of the immediate challenges that India currently faces, Socco averred, are high costs of battery-powered electric vehicles as well as lack of adequate charging infrastructure. Hybrid cars, he believes, are the answer to both these problems. He added, “They are deployable and are part of the solution today. At some point, pure battery electric vehicles will also be a solution, but it needs time to get to the point where critical mass will happen because there are issues.”
Govt. Panel Proposes Commercial Use Of ISRO’s Li-Ion Battery For EVs
A panel led by Cabinet Secretary P. K. Sinha has advocated the commercial use of ISRO’s lithium-ion battery technology for electric vehicles under the “Make in India” initiative. As per sources close to the development, the Committee of Secretaries has also suggested having “requisite power tariff and access policies” in place to expedite the establishment of EV charging infrastructure across the country.
According to media reports, the panel is doubling down to promote zero-emission vehicles, as a way of reduce pollution levels as well as lowering the country’s dependence on oil imports. Incidentally, government-run think tank NITI Aayog is also pitching for other zero-emission fuel sources like methanol as a more efficient alternative to fossil fuels.
The Aayog, in its recommendations to the government, had earlier said that vehicles fueled by conventionally-generated electricity are neither sustainable nor cost-effective. As per a government official close to the development, NITI Aayog’s reasoning is based on the following facts: methanol is more easily available, less polluting and has higher electricity mobility than gasoline.
Karnataka Govt. Invites Maruti, Honda To Set Up EV Facility In The State
As an added push to its electric vehicles ecosystem, the Karnataka government has reportedly invited two of the country’s leading automotive companies, Maruti Suzuki and Honda Cars, to set up EV units in the state. To that end, the state’s Industries Minister R. V. Deshpande has written to Maruti Suzuki Chairman R. C. Bhargava and Honda Cars CEO Yoichiro Ueno about the same.
In the letters, Deshpande averred that Karnataka already has an electric vehicle policy in place and also has sufficient availability of land in industrial areas – such as Hosakote, Bidadi, Hubballi-Dharwad, Shivamogga and Belagavi – for state-of-the-art electric vehicles facilities. He added that companies like Volvo, Telco, BEML, TVS, Honda, L&T Komatsu and Toyota Kirloskar already have a presence in the state, which essentially makes Karnataka an attractive destination for firms dabbling in EV technologies.
Recently, in the first week of January, the Karnataka government announced plans to purchase 640 electric vehicles under the Central government’s FAME India subsidised scheme. As per an official statement, out of the total batch of electric vehicles, 40 will be buses, 100 cars and 500 three-wheelers.
Renault, Maruti Suzuki To Showcase Electric Vehicles At Auto Expo 2018
With Auto Expo 2018 just around the corner, French car manufacturer Renault has announced that it will be showcasing offerings from its global portfolio – including electric vehicles, concept cars and F1 racing car – at the automotive show. The theme will revolve around the company’s latest game-changing technologies and innovations.
In a recent statement, the company said, “Also, on display would be the existing range of Renault India product portfolio with innovative themes.” Renault is also in the process of developing an EV version of its SUV-inspired small car, Kwid. As per sources, the electrified car will first be launched in China, followed by India. In line with that goal, the company is currently evaluating the car’s road-worthiness and is also conducting range extension tests.
Interestingly, Maruti Suzuki will also be unveiling its first electric car concept, called the e-Survivor, at the Auto Expo next month. It is an two-seater, open-top SUV. The company’s spokesperson elaborated, “It symbolises Maruti Suzuki’s commitment to helping develop the entire lifecycle of EVs (electric vehicles) in India including the local manufacture of components, charging infrastructure and recycling of batteries.”
Reliance Energy To Set Up 15 EV Charging Stations Across Mumbai
Reliance Energy is gearing up to set up over 15 EV charging stations across suburban Mumbai in the coming three months. The move is part of the company’s aim to set up electric vehicle charging stations across its entire distribution licence area over the next three years.
A spokesperson for Reliance Energy said in a statement, “Apart from being environment-friendly, electric vehicles have low running cost which is one-sixth of conventional vehicles powered by petrol or diesel. This year, we are installing smart slow and fast charging stations at strategic locations of Reliance Energy.”
“The company is also working on a third-party business model to provide charging stations facilities for electric two-wheelers and four-wheelers in public places, parking plazas near highways, and offices and malls,” added the spokesperson. The development comes just over a month after the Mumbai business of Reliance Energy was sold to Adani Transmission for over $2.95 Bn (INR 18,800 Cr).
Recently, in the second week of January, Tata Power, a subsidiary of Tata Group, launched two electric vehicle charging stations in Mumbai: one at a mall in Lower Panel and the other at Kurla’s Marketcity. As per sources, the company is in the process of setting up two more charging stations in the city.
Power Ministry To Release Regulations For Promoting Electric Vehicles Soon
During a recent media interaction, Union Power Minister R. K. Singh spoke in favour of tax incentives for faster adoption of electric vehicles. As part of the development, Singh also announced that the ministry will soon release a set of regulations for promoting EVs in the country.
An amendment to the country’s Electricity Act, allowing discoms to renew their distribution licences, will be likely passed in the upcoming budget session, announced the minister.
The development comes just a week after reports surfaced that the Power Ministry was considering amending the country’s power laws to facilitate faster adoption of electric vehicles. As per sources, the ministry is considering doing away with the restriction on electricity sales by distributors for the faster establishment of EV charging stations.
Tesla Still Welcome In India: Nitin Gadkari
Global electric vehicles manufacturer Tesla is still welcome to set up operations in India, stated Transport Minister Nitin Gadkari recently. The Elon Musk-led company is preparing to establish its first overseas plant in China.
Gadkari said, “If they are coming, if they are ready to come, we will welcome, we are ready to offer them land and all type of help. Presently Tesla doesn’t have any proposal to come to India.”
The US-headquartered company has been in talks with the Indian Government for ‘temporary relief on import penalties/restrictions until a local factory is built’ for quite some time now. Earlier in May 2017, Musk had mentioned that the launch of the Tesla Model 3 Sedan in India was delayed owing to strict local sourcing guidelines and supply issues.
Audi Set To Enter Indian EV Market By 2020, Provided There Is Proper Infrastructure
German automotive giant Audi is eyeing to enter the Indian electric vehicles market by 2020, provided the country has a robust charging infrastructure by then. Commenting on the company’s future plans, Audi India Head Rahil Ansari said during a recent media interaction, “Globally Audi will launch three EVs until 2020. We will be ready to launch an EV in 2019-2020 in India but for that charging infrastructure needs to be there.”
“It will depend (introduction of EVs) on how far the infrastructure has developed. If the infrastructure is ready we will make a decision of launching in India otherwise we will have to delay it,” he clarified.
Globally, Audi expects at least 30% of its sales to come from electric vehicles. To that end, the company plans to launch one EV model every year, starting from 2020. Ansari went on to state, “We already have globally certified trainers for electric vehicles in India. So we are going full throttle in terms of preparation for the EVs.”
Need Tax Relief On Hybrid, Electric Cars: Japanese Ambassador to India
Ahead of the Union Budget 2017-18, Japanese Ambassador to India Kenji Hiramatsu has called for tax relief on hybrid and electric cars, as a way to incentivise foreign automakers. In a recent media interaction, Hiramatsu also advocated the easing of norms on external commercial borrowings, a step that he believes could facilitate infrastructure development.
He stated, “We hope there will be some more cuts in tax rates under GST. We are saying that with regard to automobile issues, we would welcome a reduction in the rate for electric cars, but we hope attention will be given to import of hybrid cars, too. If some tax incentive can be provided to hybrid cars, too.”
“Also, we are hoping some measures on foreign currency restrictions including external commercial borrowings. I hope there will be measures taken to support more borrowing in foreign currency that will facilitate more infrastructure development. We also hope the dividend distribution tax issue will be addressed to some extent. That is an ongoing request not only from us but also others,” Hiramatsu added.
Auto Parts Makers Concerned Over Job Losses Due To EV Shift
Voicing concerns about the government’s continued thrust to switch to 100% electric vehicle by 2030, auto components manufacturers have stated that a sudden shift to EVs could lead to massive job losses in the sector.
As part of the latest development, the Automotive Component Manufacturers Association of India (ACMA) told the Centre that an abrupt switch to electric vehicles could result in the loss of over 1.5 Mn jobs overnight. This would be a huge blow to the country’s auto parts industry, which is already struggling to adopt the BS-VI technologies that will be implemented by April 2020.
To mitigate this problem, ACMA has appealed to the government to consider a more gradual adoption of electric vehicles. In a note addressed to NITI Aayog, the association stated, “Based on media articles of EV alone push, already component makers have started showing hesitation to make investments in ICE (internal combustion engine) technologies, which can impact growth of not only the component sector, but the auto sector as a whole.”
The industry body added, “There is clearly a cost disadvantage for BEVs (battery-run electric vehicles) and hence volume will remain limited in medium term. Auto component suppliers would be very happy to invest in EV-related parts but sufficient EV volumes are necessary to invite significant investments.”
Developments From Around The World
Billionaire Sanjeev Gupta Looks To Tap Australia’s EV Market
British industrialist and billionaire Sanjeev Gupta is planning to partake in the bidding for industrial assets at General Motors Co’s former Holden manufacturing site in South Australia. If he wins the bid, Gupta aims to transform the site into an electric vehicle manufacturing facility.
With this, the now-defunct facility would once again become operational.
Confirming the development, South Australia State Treasurer Tom Koutsantonis said, “Based on discussions I have had with the GFG Alliance I understand that, should they be the successful bidder, they intend to develop the site as a manufacturing base for an electric vehicle.”
Pune Based Bharat Forge Sets Up R&D Centre For Electric Vehicles In The UK
Pune-headquartered auto components manufacturer Bharat Forge has reportedly set up a research and development (R&D) facility in Britain for developing electric vehicle parts and subsystems. Located at the Mira Technology Park, the facility will focus on building solutions of EVs.
Commenting on the development, Amit Kalyani, Executive Director of Bharat Forge, said: “We are really impressed with the infrastructure and the facilities available in Mira Technology Park and have set up a research facility focused on R&D for powertrain solutions for EVs.”
Kalyani further stated, “Several large global OEMs and tier I companies are already present at Mira technology Park for development and testing of vehicles and systems in the EV space. The infrastructure and knowledge available would only help hasten the development for BFL and reduce our time to entry in this very important market space.”
Returns on Battery-Powered Electric Vehicles Will Be Low Initially: Report
Moody’s Investors Service, the bond credit rating business of Moody’s Corporation, has stated that returns on battery-powered electric vehicles (BEVs) will be low for global automakers in the coming years. However, by 2020, sales of EVs are expected to increase to somewhere between 17% and 19% worldwide, the report predicted.
As per the newly-released report by Moody’s, by 2025, electric vehicles will account for approximately 7% to 8% of global auto sales. However, because the production of zero or low emission vehicles is a capital-intensive process, returns on the automakers’ investment would be low compared to conventional internal combustion engine.
Elaborating further, Moody’s Senior Vice-President and Lead Auto Analyst Bruce Clark said, “One of the auto industry’s major areas of focus for the past 10 years has been improving fuel economy and preparing to meet increasingly burdensome emission-reduction rules, and battery electric vehicles are an extension of this. But BEVs will require significant capital investment by automakers, generate low returns until the early 2020s and face hurdles to achieving broader consumer acceptance.”
While the electric vehicles market remains a lucrative destination for corporates and startups like Ola in India, there are quite a few challenges that need to be overcome to make EVs ready for mass adoption. A robust battery production ecosystem is essential to be able to achieve 100% electric vehicles by 2030. Additionally, the government has to facilitate the development of a well-connected network of charging stations across the country.
For faster adoption of EVs, the government will also have to offer tax rebates and subsidies to prospective car owners. If successful, the shift to shared, electric and connected mobility could potentially help India save up to $300 Bn (INR 20 Lakh Cr) in oil imports and nearly 1 gigatonne of carbon dioxide emissions by 2030, as per a recent report by FICCI and Rocky Mountain Institute.
Stay tuned for the next edition of our weekly series of Electric Vehicles Roundup!
