Shailesh Chandra, MD of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, talks about the EV charging infrastructure landscape, CAFE norms, and the return of 'hot hatchbacks.'
13 Aug 2024 | 4879 Views | By Hormazd Sorabjee
Shailesh Chandra, MD of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, talks about the EV charging infrastructure landscape, CAFE norms, and the return of 'hot hatchbacks.' Edited excerpts.
What is your view on the current growth rate for the market?
It is a triangulated view that ...
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Shailesh Chandra, MD of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, talks about the EV charging infrastructure landscape, CAFE norms, and the return of 'hot hatchbacks.' Edited excerpts.
What is your view on the current growth rate for the market?
It is a triangulated view that in FY25, the market will grow by 4-5%, that is because of the high base effect. For two years FY22 and 23 — there was a very steep growth. The Indian auto industry has a secular growth trend of 6-8%. So, it is catching up to that secular growth trend after having seen a dip during Covid-19 and then a surge. Now, it is stabilising at the 6-8% growth level.
We saw a growth of 8% plus last financial year, this year, the growth will moderate. In the first half, we have seen growth of 3-4% in the first few months. Quarter two is likely to see a similar kind of growth. Hence, it will moderate in H1. Already we are seeing a growth of roughly 3-4% in the first two months. From the third quarter onwards, it should be slightly better due to the festivities.
What led to your downward revision of the EV penetration forecast to 30% for the end of the decade?
We downgraded our forecast based on triangulated projections of different agencies, including NITI Aayog and BCG numbers, because if we had to hit the [50%] mark, we needed to have visibility in the next one or two years for it to be at a certain level. If not, then it is better to take a conservative number, especially for financial planning, which helps you to not be exposed too much to external conditions. We have taken that into consideration.
How critical is home charging for EV owners and how many are first time EV buyers?
EV buyers who have already bought the car might not be too worried about public charging. Range anxiety, public charging, lack of public charging infrastructure is in the mind of non-EV buyers. Those who feel anxious are only the ones who have not used an electric vehicle. When it comes to public charging, it is just the comfort that people want. The way they see petrol pumps on the highway, they want to see EV charging stations. It is more for comfort.
It is just a matter of one or two years [after which] cars would be able to give over 400 kilometres [per charge]. Battery prices are coming down, narrowing the gap between ICE and EV. ICE prices will go up with emission norms. So, you will be able to get 400 km plus for all categories of cars, and this will be available even in the lower category of cars. For most use cases, 400 km is coming to be the real range, and it will sort out a lot of these problems. If EVs are to go mainstream, then you need to give even smaller cars like Tiago a range of 400 kilometres.
Trends indicate that battery prices in the last two years have gone down by 50%. All the localisation work that has gone into the non-cell part of the battery is also kicking in, and has led to both benefits over time at the pack level. Therefore, the ability to start giving a higher range is also becoming feasible. We have seen that around 20% of our EV customers are first-time buyers.
Is there physical space for larger battery packs in some of your models?
That's what our EV architectures provide for. Space will not be a limitation for range; it is the price. You need a bigger pack for more range.
What about the issue of home charging versus public charging infrastructure?
We are advocating the government [to bring about] a 'Right to Charge' and to remove roadblocks. Every parking lot having a dedicated charging spot is also not a good solution because everybody will not have a three-phase connection. So, you have to ensure that there is good community charging availability. It should be a 7.2kW and 11kW charger and so on, so that they charge reasonably fast.
Do you think consumers will accept having community charging, won't they want the convenience of their own dedicated charging? Because there might be queue anxiety.
In my society, I have four chargers. I have never stood in a queue and there are 40 EVs in my society, which are charging using those chargers. I charge once a week, so just calculate — if all of them charge four times in a month, one charger needs to take care of 10 cars.
I think community charging is the best way to go forward, where you have this problem of getting your own three-phase connection in the parking lot. In tier II, tier III towns, there are a lot of independent houses and people can put solar panels for charging. That is what we will be promoting in a big way. That is where the well-to-wheel discussion gets trashed completely. Solar rooftop is behind this EV adoption. I saw the same thing in Rajasthan and Kerala.
EV adoption is happening in very different ways than we are thinking. Statistics showed that already 15% of my EV buyers are with solar rooftop panels. Now if 15% of total EVs sold are with solar power. The grid is at a 25% level of renewable energy, then 33% of my EVs are being charged by renewable energy. We are working with Tata Power. So I have got the database from them of the customers who have solar panels on their rooftops. I will try to cross sell as to why an EV as an option is good for them and show them that overall household expenditure comes down.
In tier II and tier III towns, everybody can go for a solar rooftop. Even societies can mandate that. If 50% of the EV buyers go this way, you are talking about charging from 70% renewable energy, if India reaches 40% renewable. This, only India can do, because we have sunlight round the year. This is an advantage India has and we should pursue that.
What about the resale value of EVs which could be a huge concern as EVs enter the used car market?
Resale value can only be resolved if you create the used car market first. I can always give a buyback but that is only a financial solution. But if I don't create a used car market, that stock will only pile up at my end. So I have to create that used car market. Now imagine after four years, an EV gets just 60% of its original value.
On the side [of the buyer of the used car], you don't need to worry about resale value if you are getting an electric car at such a cheap cost. You will recover the money within one year [due to fuel savings] even if there is nothing on the other side when he decides to sell it on. When you do the arithmetic, even with zero resale value for a used car, you will be able to make money. This will spur the used car market. To give confidence, I have already made the warranty transferable because the only concern is - what if the battery goes bad? I am able to solve that by making the warranty transferable.
You have brought the hot hatch back in the form of the Altroz Racer. What do you think the scope of this segment is?
We are working on an electric version of the Altroz. So there could be an electric hot hatch version too. We believe that this is a very niche category that we are experimenting with. If this works well, there will be a more holistic thinking on how we will deal with the performance brand. But, electric is just part of it, we have some engine options too going forward.
Talking about engines, when can we expect the 1.5 petrol and we hear that the Fiat diesel's future is in doubt as suppliers are likely to stop producing components for it by 2027.
The 1.5 petrol should come in the second or third quarter of 2025 and we have to get it for the Harrier and Safari. On diesel, all I can say is that we have a continuity plan. In any case, we have projected that diesel will come down to 5% of the overall market by 2030. [However] we may have a diesel mix at similar levels if future regulations don't penalise diesel and the market still accepts it. In certain segments, where diesel has had to exit, it has already exited.
What is the update on the Avinya? Work was already underway when you switched to JLR's EMA platform. Has that delayed the timeline?
We were exploring many options, including our own ground up platform. There would have been one or two options, but eventually, we looked at the concept of Avinya, and the product plan of JLR. They were both very adjacent. To have two separate platforms in the same family did not make sense. Together, we now have the scale and bargaining power with global suppliers.
Overall, it is going well, though there might be a slight delay of a quarter or so. We have our own version which will be very cost effective, tailored for our customers. There are some elements of the platform we will not touch to keep its integrity, but other areas where we can make changes, we will do. For example, we will go with a slightly lower (smaller) battery size. That is an independent development. There are three or four options and we will go with the most cost-effective one."
This feature was first published in Autocar Professional's August 1, 2024 issue.