Mahindra & Mahindra is betting big on its electric vehicle development programme, which is in line with its aim to be known as a pioneer in the field in India.
06 Dec 2015 | 4972 Views | By Shourya Harwani
Throughout history, the success of carmakers has relied heavily upon anticipating and responding to changing consumer behaviours and new external challenges. This has led to wave upon wave of innovation as manufacturers look to stay ahead of the game and gain an edge in an incredibly competitive marketplace. Electric powered ...
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Throughout history, the success of carmakers has relied heavily upon anticipating and responding to changing consumer behaviours and new external challenges. This has led to wave upon wave of innovation as manufacturers look to stay ahead of the game and gain an edge in an incredibly competitive marketplace. Electric powered vehicles are one of the industry’s most innovative ideas which have now evolved to become a viable means of reducing our dependence on fossil fuels.
Like many other OEMs globally, Mahindra & Mahindra, which has emerged as the country’s only electric carmaker, firmly believes in the bright future of EVs and according to executive director Dr Pawan Goenka, the home-grown automaker is placing its bets on pure electric vehicles rather than going the hybrid way.
“Electric vehicles have a direct impact on environment, while hybrids have only some incremental benefits when it comes to fuel consumption. The EVs will really have a step change with no direct fossil fuel consumption and zero pollution, therefore our focus is on pure electric vehicles. Yes we do realise that it is a steep climb in respect with the cost of batteries and controllers, but we continue to believe that there will be a breakthrough, both in terms of consumer acceptance of the product and not just as what it might mean for the environment, but also in terms of what it means to own it, because at the end of the day you look at the cost of running the vehicle. Hybrids will reduce this cost marginally, whereas electrics will bring down the cost significantly – 50 paise for EVs vs 2 rupees for Hybrids per km. So, that is the reason why we are betting on EVs and not that much on hybrids,” explains Dr Goenka.
EV VIABILITY
Justifying the viability of EVs in the present Indian scenario, where there is still a dearth of clean energy, Dr Goenka says that: “In India, all the new power plants that are coming up will be nuclear, solar or wind energy based, so in future the electricity generation would be much cleaner.
Therefore, if we do not start developing EVs today, then from 15-20 years from now, when we have clean sources of electricity, we will not be able to generate enough volumes. We will have clean electricity then, but no vehicles that could utilise it. Hence, let us not be over concerned by the fact that today electricity generation process is polluted, and even if it is taken into consideration, that pollution is happening in a controlled environment and not in the city.”
Apart from the availability of clean energy, continued support from the government for EVs is also something which lifts M&M’s spirits.
FAME FILLIP
Under its (Faster Adoption and Manufacturing of Electric Vehicles) India scheme launched on April 1, 2015, the government has incentivised the upfront acquisition cost to promote faster adoption and manufacturing of xEVs in India. Initially, it has approved a two-year scheme till 2017 that marks the end of the current five-year plan. By end-2017, a call to extend it over the next plan period would be taken. Rs 795 crore has been allotted for this two-year period to give a fillip to xEVs with demand incentives linked to the efficiency of the vehicle – pure EVs, being more efficient, get the highest incentive while mild hybrids the lowest.
Even as M&M has not completely discarded its development of hybrid vehicles, it has taken the automaker much longer-than-anticipated to develop any major hybrid vehicles. The automaker launched its first pure electric vehicle the e2o, in 2013 after it acquired the Reva Electric Car Company in 2010, and recently added the Verito electric to its fleet of EVs.
Though the e2o has not been a big volume driver for the company, sales have started to pick up after the introduction of the FAME scheme by the Ministry of Heavy Industries and Enterprises.
“Thanks to the FAME policy, sales volume are picking up slowly. We have a few products that we are working with electric technology, but hopefully, soon enough, we shall be leaders in EV technology in India,” Dr Goenka said, adding that the government has provided ample support to automakers for promoting and developing EVs in the country.
M&M’s EV thrust is not just limited to four-wheelers and the automaker has also developed a commercially viable electric scooter brand named the GenZe. Founded in 2012 with a goal to develop sustainable urban transportation solutions, the company recently showcased GenZe 2.0, its first electric scooter with a removable lithium-ion battery, which is designed and built in the United States, at the EICMA 2015 show in Italy.
CHALLENGES AHEAD
Though growing at a rapid rate, electric vehicles are still a niche rather than a mainstream product. Numerous challenges stand in the way of a flourishing EV market. Many of these are the result of macroeconomic conditions which not only have a profound effect on purchasing habits but also on the ability of governments to offer financial incentives and support investment in the necessary infrastructure.
In the overall market scenario, the biggest challenge for EVs is to take market share from traditional segments and fuel types. Economic factors such as the fall in global oil prices will continue to have the greatest influence on purchasing decisions, to the detriment of EVs. Despite increasing awareness and a generally positive perception of EVs, many consumers are still waiting. Macroeconomic factors and infrastructure challenges play a large part, but there is also a lack of choice.
Globally as well, the total number of pure electric and plug-in hybrids cars available right now doesn’t exceed seventy. That’s a low number compared to the huge variety of petrol cars on the market, but it should grow in the coming years as prices come down, more efficient batteries become available and tighter emissions regulations for the car industry take effect.
“For us the biggest concern is that EVs continue to be expensive due to the high cost of batteries and other components. A breakthrough is required to bring down the overall costs of EVs, and we can be certain that this breakthrough will happen. The challenge is how to convince the consumer that EVs are good for them, not only from the environment viewpoint, but also from the aspect of financial prudence,” says Dr Goenka.
Nevertheless, there’s a growing consensus around the benefits of EVs. The environmental case has helped the industry to introduce EVs to consumers and give them a foothold in the market. However, what M&M and other EV makers need to figure out next is how to make electric cars a mass-market proposition.