Success is sweeter when one is passionate and consistent. One can have a worthwhile experience in life by finding out what one loves most, and the accomplishments that come thereafter are sweeter than anything else one can experience. One can say the same about Sohinder Singh Gill, global CEO, Hero Electric; and director general, Society of Manufacturers of Electric Vehicles (SMEV).
At a time when the government is vehemently supporting and encouraging growth of electric vehicles (EV), the segment per se has not seen a rapid growth. Reasons are many. For now, it does suffice to say lack of knowledge among users, charging infrastructure across the country, and the fear of limited mileage.
Enter Society of Manufacturers of Electric Vehicles (SMEV). While it has done much to raise the penetration of EVs in the country, simultaneously, it also works closely with the government to set up charging kiosks at every fuel station, while providing sufficient parking space. It also wants to rejig the FAME-II to spur demand and remove the anomaly of high GST on the batteries if sold separately from the vehicles.
There is a common view that if you accelerate electric mobility and adoption of electric mobility the way we want to in two- and three-wheelers and buses, India can become 30% electric by 2030. It means we need to really front-load the subsidies to the first few million customers, so that the vehicles can be seen and experienced. Once you have done this, only then can you sharply taper off the subsidies.
Emerging markets switching from petrol and diesel engines to electric vehicles (EVs) could save $250 billion annually and slash expected growth in global oil demand by as much as 70%, an industry analysis shows. The analysis found that the EV revolution could essentially fund itself as component costs fall over time and governments turn away from fossil fuel infrastructure such as pipelines and refineries which risk becoming stranded assets as transportation gets greener.
In another report, OEMs will require a massive capex to the tune of around Rs 3.5 lakh crore for EVs in the next five to seven years to meet the government’s target of 30% of the total vehicles on road being EVs by 2030. They currently have a capex of around Rs 25,000-30,000 crore per year in terms of enhancing their capacity for model launches and upgradation of existing models.
In a freewheeling interview, Gill tells us of his role at Hero Electric and also the leaps taken at SMEV.
How have you fostered innovations at Hero Electric?
Innovation is not a top down approach. It must be in the DNA of every employee, where only extent and efforts vary. It is the reason we encourage brainstorming among the staff. When you motivate people to make suggestions and don’t refute ideas, they are keen to see some of their ideas come to fruition, if not immediately then at a later date.
As director-general of SMEV, some of the steps taken to boost the EV segment in India in the last one year?
Lately there have been many positive news on the EV policy front from the central and state governments that has led to a higher confidence amongst OEMs, component suppliers and investors. We look forward to a big push by the government to set right what went wrong with FAME II so as to assist generation of demand which is already showing some green shoots. Some of the measures that could be adopted are removal of the ‘range criteria’ from two-wheelers for subsidy, reduction of GST on batteries from 18% to 5% when sold separately, mandating delivery businesses to convert their fleets to EVs, promote electric mobility under ‘Swatchh Bharat Campaign’.
As an association, we constantly keep an eye out for trends around the world. Then we try to influence policies in a very unbiased way. The policy makers need plenty of inputs and it should not be confined to one particular business. For example, the policies made in isolation are great, but when not integrated with other ministries, they may have a tendency to seem unfit.
More importantly, people need to be educated about managing their EV. Understanding the battery and its chemistry is necessary, Any untoward incident can throw the entire concept out of gear.
We also encourage start-ups. World over, they have introduced some major disruptions in traditional industries and the Indian automotive industry is no exception. Automotive is not an easy game. Start-ups must look to venture into e-mobility – breaking electric mobility into bits and pieces and concentrating on the part which they feel they can create a differentiator, and the greater part of this would be technology.
How would you expand charging infrastructure in the country – now a sore point that is curbing growth of EVs?
First we need to understand how much charging infra is needed to remove the bottlenecks for EVs. In India, while electric cars are yet to take off, electric 2-wheelers are more popular. Overseas, it is the reverse. If this is the case, one does not need a huge density of charging infra.
An EV usually goes for 60-70km once charged, and they are home charged as they have portable batteries. Moreover, India has sold only around 15,000 electric cars last one decade. Our demand is have a simple socket charging infra that doesn’t require too much investment and is also safe.
The rapidness of adoption – otherwise there is no challenge. Only thing is whether we can reach that curve where the exponential growth starts. When we have crossed that threshold and we have gone into a major mass mobility, that’s the challenge here. It seems to shift time and again by a few months or a few years.
Automotive companies are required to come up with new models. How does that pan out for you in electric 2-wheelers?
Since the volumes in EVs are still absent, it does not make sense to come out with new models as they are investment heavy. The total volume of all EVs in the country is 156,000 as compared to 25 million that the country makes for petrol and diesel heads. With such heavy competition there, it makes sense to come out with newer models and technology. The concept of market share is also missing in EVs.
How do you look at procurement of components and raw materials?
There was heavy dependence on China two years ago. But then the policy of localisation came in and while it is a good thing, most Indian SMEs are averse to investing so much when the returns are not heartening. Till the volumes reach around half a million, it does not make sense. I agree with that. For instance, till the batter volumes reach two million, component makers feel that it is not worth the time and money.
We reasoned with the policy makers not to make localisation a compulsion, because its absence that would mean the subsidies might go away. Two years ago, when the government set targets for localisation and manufacturers could not meet them, they didn’t see the subsidies too. Unfortunately, anti-China sentiments have gone up so much, that insisting on imports would lead to other consequences.
What are some of the unique aspects of your manufacturing plants and machinery used for e-2-wheelers?
Most of my life has been spent working with two-wheelers – Yamaha, Honda, etc. Those are highly capital- and technology intensive ventures. The engines in petrol two-wheelers are the most important components and within that there are components. Some of them are always under R&D and they come up with minor tweaks to stay ahead of the competition. In EVs, the entire concept is based on the motor and that too is not made in-house. So the whole concept is so much simpler and everything seems to shape to developing the right product. The software, the electric power control units, all contribute to making manufacturing easy. It is more of a perfection driven kind of business where we work towards higher efficiency, light-weighting, decreasing the losses of power train, managing just-in-time, and it’s a different ball game altogether.