With social distancing norms in place, two-wheeler buyers could increasingly look at going electric. What's key is to enhance EV localisation to reduce costs and drive up volumes.
23 Apr 2020 | 84197 Views | By R Sricharan
The overarching goal of Earth Day, held every year on April 22, is to enhance the sustainability of our planet going forward. In this context, the current lockdown perhaps has a silver lining in terms of the impact on the environment. Once things return to normal, if at all, and ...
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The overarching goal of Earth Day, held every year on April 22, is to enhance the sustainability of our planet going forward. In this context, the current lockdown perhaps has a silver lining in terms of the impact on the environment. Once things return to normal, if at all, and the auto industry takes its time to digest the hit and bounce back and consumers increasingly look for personal over public transport, will this open up an avenue of opportunity for the EV industry boom across the country?
Naveen Munjal, Managing Director, Hero Electric, one of the four panellists in Autocar Professional's webinar on 'Driving towards a Greener, More Sustainable Auto Industry', held on April 22, certainly thinks so. "This lockdown will affect everybody for sure. It will even affect the supply chain and sourcing components will also take a hit. But, we think there will be positive outcomes. There will be a demand for e-mobility as people will shun public transport and opt for personal conveyance. And, charging from home will be another huge benefit keeping social distancing in mind. EVs will be practical for first-time users."
Given that he is leading the charge at India's leading electric two-wheeler OEM, Munjal's comments were largely driven by the happenings in this segment. So, he correctly pointed out that every sub-segment in the overall EV segment, should be viewed differently as the needs and requirements are different. "From the infrastructure requirements to the way we use the EV and charge, they are different. We have to look at these as different baskets."
Sharing his views on the EV space in the Indian market, Munjal, who is also the president of the Society of Manufacturers of Electric Vehicles (SMEV), said that the India EV market sales are very slow compared to China, which is the world's largest EV market as well as automobile market. India sold just around 156,000 EVs in FY2020, with 97% of them being electric two-wheelers. Needless to say, China leaves India far behind even in the three-wheeler and four-wheeler EV space.
"Air pollution is a major issue in India and EVs are a much cleaner way of transport. We think that the EV movement will pick up speed soon. The government has taken a number of initiatives in the EV space with policies like FAME 1 and FAME 2. However, much more work needs to be carried out. So far, these policies talk about high-speed vehicles getting subsidies. It should be the mass vehicles getting the benefits," remarked Munjal.
Addressing a question on localisation, Munjal outlined the need for demand to drive up volumes. With localisation, EV cost – a deterrent for most buyers – will come down and most customers want a product of their choice. "If an OE does not match the needs,the customer moves to another company that satisfies his needs. Consumers do not want what is being pushed to them. The FAME 2 policy does not address many factors that the consumer needs. Yes, localisation is happening to an extent. But to get to a level of getting the batteries manufactured here, there needs to be a demand of scale and volume. We believe it will happen from the two-wheeler industry. Once the lockdown is lifted, we expect the sale of EVs to go up. We are gearing up our facilities to handle the demand. I foresee strong demand for EVs with the speed of 40-45kph with price-points around Rs 70,000-75,000," he said.
Commenting on e-bicycles, he mentioned that they can be helpful in last-mile connectivity. Making his final remarks, Munjal stated that the “Opportunity is here – the air is cleanest ever since lockdown. Once we are out of lockdown, it has to be an opportunity for us to leap forward and bring down emission in every way. In terms of mobility, if the answer is electric, so be it.”
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