Mahindra has been the first company in the Indian auto sector to invest in Electric Vehicles
India aims to have over 3 million Electric Vehicles [EVs] by 2030 from the present number of approximately 1500 electric vehicles in use. The recent announcement from the government clarifying that there will be no need for separate licences for charging stations comes as a huge relief to the EV industry with many citing that the positive announcement will create a level playing field for different stakeholders in the sector and boost the adoption of EVs in the country. With pro government policies and leading global auto manufacturers looking at introducing their EV models in India soon, the industry is also witnessing the adoption of EVs by leading cab and bike rental service providers planning in the country.
Mahindra has been one of the first movers in the Indian auto sector to invest in Electric Vehicles with the acquisition of REVA in 2010. The auto manufacturer also recently announced the launch of the luxury EV brand Automobili Pininfarina with plans to introduce an electric hypercar by 2020. Mahindra’s existing two models e2o and e2o plus have been the largest selling electric cars in India.
Manish Joshi of NewsBarons provides excerpts of an interaction with Mahesh Babu, CEO – Mahindra Electric who informs ‘Mahindra has been the pioneer and the sole player in the EV space in India since 2010’.
NB: How do you see the production and growth of EV market in near future?
Mahesh: India’s EV vision is a bold and ambitious one; and is a strong force that has brought all stakeholders together to discuss and evaluate the best way forward, foresee barriers to adoption and develop the best ways to overcome them. The exponential jump from the current 1500 (approx.) four wheelers a year to a forecasted 3 million by 2030 (based on Goldman Sachs report) will require a lot of factors to align and work in tandem.
In my view, the EV market is poised for growth backed by supportive initiatives taken by the individual ministries in line with the recommendations from the NITI Aayog report (released in May 2017) and we, at Mahindra, will be ready with globally competitive technologies and state of the art manufacturing facilities to supply.
NB: How lucrative you think is the EV market for the manufacturers?
Mahesh: For any manufacturer, an industry becomes lucrative only after a certain critical volume, sufficient to start showing results in terms of profitability, is achieved. Mahindra has been the pioneer and the sole player in the EV space in India since 2010. The investment was a conscious move in anticipation of the future potential that we believe is inherent in Electric Vehicles. While our investments may not been lucrative from a manufacturing stand point till now, it has certainly given us a leadership position in the EV technology today. We foresee a great deal of growth for the industry as well as us in the near future as EVs become more and more popular.
Recently, there have also been new entrants in the segment and several others on the verge of entering. It is heartening to see this since it stands as a proof that demand is on an upward swing with the increasing fleet penetration and initiatives like the EESL tender for 10,000 vehicles.
NB: What are the challenges the industry is facing currently?
Mahesh: Similar to all industries in their developing stages, EVs also come with their own challenges. Currently, charging infrastructure availability is challenge that all stakeholders are recognizing as an important one to address. We hope to see more traction in this space after the recent decision by the power ministry to treat charging services as separate from resale of electricity.
Another major challenge is the high cost of vehicle owing to the high cost of components and low volumes. This also we believe will improve as the demand keeps increasing.
NB: What can be the social and economic impact of Electric vehicle?
Mahesh: The movement towards EVs is going to have a positive impact on the social, economic as well as environmental spheres. With zero tailpipe emission vehicles, the pollution levels in thickly populated urban centers will reduce significantly, directly improving the health of the millions living in this space. From the economic stand point, this move will reduce the burden of increasing oil imports and give India an opportunity to be a global leader in the EV space instead of playing catch up with developed economies. Last but not the least, the shift of energy generation towards renewable sources will ensure that EVs become even more environment friendly.
That being said, change is always perceived as a challenge. There have been some concerns about how to facilitate the transition to EVs, including reskilling of the work force. We recognize these are continuously strive to engage with various stakeholders to facilitate it.
NB: Is India geared up in technical know-how and resources availability to meet the anticipated demand of EVs?
Mahesh: As the pioneers and sole player in the EV industry since the past 10 years, we at Mahindra alone have extensive experience in Lithium ion powered vehicles and their performance on Indian roads. The data we have gathered has helped us refined our expertise and has gone a long way to help us optimize technologies for local conditions. In fact, this has led us to introduce several technologies in EVs for the first time, ahead of all other players in the world. With such experience and more players joining the ranks, we believe that India has a great opportunity to become a global leader in EVs.
Perhaps the one area where we need to improve is battery cell manufacturing and this is where we are exploring global partnerships to help us bridge the gap quickly.
NB: With just 1300 electric cars and 44000 electric bikes sold in 2016-17, do you think EV will pick up in near future?
Mahesh: As a country, India has repeatedly displayed its ability to leapfrog technologies as was the case with rapid smartphone penetration and 4G network. as well as rapid solar renewable penetration. We are confident that adoption of EVs will see a similar drastic transition owing to the many social, economic and environmental benefits inherent to EVs.