India, Both Tortoise and Hare in the EV Race

Electric mobility has been making the top news in India for some time now, not so much for any substantial development, but more for a series of bizarre claims that have raised serious doubts about the Government’s sincerity in the matter. From the impossible target of moving all Indian vehicles to the electric platform by 2030, to the comatose tenders for inducting +20,000 electric vehicles (EV) in the Government fleet, India has far from walked the talk when it comes to electric mobility. A reason behind this substantial confusion could be the fact that the people making actual decisions in this matter have never owned or driven an EV, neither do they know much about the technology. We hardly ever get to hear from actual EV owners, who by the way are conservative at best in their projections about the future of EV in India. So let’s hear from one such EV enthusiast, Abhishek Uchil, a Mumbai-based editor, who has owned an EV since 2016 and recently test drove the Hyundai Kona. 

Abishek, what motivated you to shift to an EV? What are the best advantages of the EV technology as compared with conventional fuel vehicles?  

Money! I’m only half-joking, but did you know that an electric car costs less than a ₹1 per km to run whereas a fuel car costs more than ₹4 to run? Plus, if you invest in solar energy for your home, you can drive your car virtually free of cost! Sure, EVs cost more if you look at the sticker price, but the more you drive them, the cheaper they become – not to mention they cost very little to maintain because they contain few moving parts; compare this to fuel vehicles, which contain hundreds of moving parts and cost a lot more to maintain as they age. EVs also have other advantages such as regenerative braking, which allows you to regain energy every time you let your foot off the accelerator; over-the-air updates, which allow car manufacturers to spot problems and run diagnostics remotely (Ather is one company that prominently does this); and clutch-free driving, which – as any person who’s driven in Indian traffic conditions will tell you – is a boon from the gods.

You’re also involved in the promotion of electric mobility in India, what are the primary challenges as well as opportunities in the EV space right now?

Challenges: 

(a) Low awareness – this is the worst of the challenges by far; I’ve been a Mahindra e2o driver for many years, and the car itself has been around for six years, but I still get questions like ‘What’s the mileage?’ and ‘Does it have a CNG tank?’ Don’t even get me started on the number of questions I get about charging alone. The number one question in this regard is ‘What will happen if I run out of charge in the middle of the road?’ 

(b) That question brings me to the second challenge – a lack of charging infrastructure. Sure, there’s been a lot of improvement in this regard in the last one year itself. Companies like Magenta Power, One Plug, and Masstech are dedicating themselves to setting up charging stations all over India, but this is a country of +50 million personal vehicle owners. EVs don’t make up even 1% of this number. Now imagine if that figure was even 10%, forget 40% or 60%. We need large-scale installation of charging stations on a priority basis to convert people to EVs. 

(c) A sclerotic Government and manufacturers – The recent protest by two-wheeler manufacturers against the Government directive that all two-wheelers sold in the country after 2025 should be electric is a good example of this. Manufacturers want things to continue as they are because they are risk averse and don’t want to make massive investments to change their production and service processes, and the Government issues one directive after the other without really following up on any. Even a small piece of legislation that would require all vehicle manufacturers to make 5–10% of the line-up electric – as in the United States – would go a long way in promoting EVs. 

(d) Battery imports – Currently, there’s no lithium-ion-battery manufacturing plant in India. The lithium-ion chemistry is what is predominantly used in EV batteries, and the cost of EVs will remain high as long as these batteries are imported. This is also what’s preventing Indian EV manufacturers from making long-range EVs. As the range increases, so does the number of batteries, and so does the cost of the car.

Opportunities: 

(a) Investment opportunities – For any company that’s actually willing to make an investment in EVs, the opportunities are endless. Electric two-wheelers are really taking off because (i) their cost is approaching that of petrol two-wheelers, and (ii) the current technology allows electric two-wheelers to provide the same (if not better) level of performance as that of petrol two-wheelers at less than half the cost of maintenance and fuelling (again, see Ather). A lot of companies are simply importing two-wheelers from China and slapping their brand name on the vehicles before selling them, but they’re still doing well. Ather is probably the only company that’s selling EVs made entirely in India (except for the batteries, obviously), and the company’s doing phenomenally well. And if Ather were to set up its own battery manufacturing plant, it would be able to reduce the sticker price of its scooters significantly! 

(b) Job opportunities – EVs are the future, unquestionably. Just like the internet led to a revolution in the 1990s and early 2000s, EV technology is revolutionising the mobility space. Autonomous driving technology, over-the-air software updates, and so on are possible only today and only in the EV field. If you’re a student of IT or engineering, you have hundreds of opportunities right here in India to work with a burgeoning startups like Ather or with an established giant like Mahindra and Toyota! 

How does the next decade look like for electric mobility in India? How important are EVs for sustainable development, given rapid urbanisation across India?

By 2030, major cities in India will have EVs as part of its domestic transport. Auto rickshaws will almost all be electric, and so will many buses and taxis. As for private vehicles, many two-wheelers will be electric, and a significant percentage of four-wheelers will be electric as well. There will be a lot more long-range (250+ km) four wheelers, and their cost will be comparable to that of premium petrol/diesel four-wheelers such as the Maruti Baleno. Low-range (100 to 150 km) four-wheelers will be a lot more common and will cost as much as cheap hatchbacks such as the Renault Kwid. In smaller cities and villages, all of the above will apply, but electric auto rickshaws and electric two-wheelers will be the most dominant mode of transport. There will also be more public fast-charging stations everywhere. All of this will help in reducing air and noise pollution levels in India, which is very important given the country’s rate of urbanisation. By 2050, it is hoped that sustainable electric mobility will be mainstream.

What’s your take on the measures announced in the Union Budget 2019-20 to promote EVs?

The tax credit of nearly $2,500 is a good move, but again, it doesn’t compare to what countries like the United States offer ($7,000). The tax break should be substantial (at least $5,000) to encourage more early adopters. Of course, these tax breaks are not sustainable in the long run, so they should be phased out bit by bit as EV production reaches economies of scale, like in the United States. The most important thing, however, is to make EV manufacturing conditions more conducive because otherwise, EV manufacturers will simply absorb the discount into the cost of their cars, effectively benefiting themselves instead of consumers. At the moment, one can’t even really blame them for doing so because manufacturing an EV is so expensive that they will take every opportunity to cut costs. Only when EV manufacturers are certain of making a profit or even breaking even will EVs become cheaper and more numerous.

The budget proposing that the GST on batteries be lowered to 5% from 12% is a step in the right direction, but it doesn’t solve all the problems of making EVs mainstream in India. For that to happen, the Government must incentivise automakers to set up battery-manufacturing plants in India. Because batteries have to be imported, automakers have to pay high prices to obtain them, and they inevitably pass on those costs to the consumer. If batteries were manufactured in India, not only would batteries cost less, but automakers could contribute to increasing employment rates and fostering a generation of engineers with in-depth knowledge of indigenous battery technology. We also need to work on battery chemistry types that don’t use lithium. The Government should fund research on this topic, particularly research by young Indian students. 

Additionally, the Government should incentivise Indian solar panel manufacturers. Currently, a lot of the solar panels used in India come from — where else? — China. These panels are cheap and of decent quality. Privileging such panels over Indian panels is unfair to local manufacturers. Indian solar panels are of comparable or higher quality, but they just don’t stand a chance when cheap Chinese panels are being sold by even tiny general stores next to toothpaste and Maggi in rural India. The Government should heavily subsidise Indian solar panel manufacturers and make the environment for manufacturing panels more attractive. Solar technology is becoming more and more popular, and if the Chinese onslaught is not nipped in the bud, this will be another industry where we had the potential to truly ‘make in India’ but failed to pursue the opportunity.

How was your experience driving the Hyundai Kona?

The Kona is a very good automatic car, but it’s not really an EV in the best sense of the word. It has no telematics or over-the-air updates, which is disappointing because an EV is basically a computer on wheels, and being able to run diagnostics remotely or magically enable a new feature through an overnight software update is what makes EVs exciting and ripe with possibilities. All the same, the car has a decent range, good handling, and plenty of creature comforts, all of which largely justify its steep price tag. Of course, where the Kona really wins is in the servicing and maintenance aspects. Over five years, the Kona will save you more than ₹700,000 in fuelling and maintenance charges compared to a similar petrol/diesel SUV, which is pretty darn amazing. 

The ARAI range of 450+ km is something that may be achieved in only ideal conditions (flat roads and moderate weather), so I’m interested in finding out how much range the car can actually provide. On most Indian highways, one can’t hope to do more than 45 kmph, given their atrocious conditions. That combined with the Kona’s super power-saving mode, the Eco+, which limits the speed to 90 kmph and disables a lot of the car’s energy-consuming functionalities, should definitely allow users to eke out more than 350 km from the battery. 

This would make long-range trips in an EV seem a much more attractive proposition in India. Of course, having a more concrete fast-charging infrastructure is essential (it’s rather dispersed and unreliable at this point) to give people the confidence to drive more than 500 km in an EV. Hyundai is setting up a DC fast-charging infrastructure for the Kona in Bombay, Delhi, Bangalore, and Madras, but this seems counterproductive because hardly any Kona driver will use up the car’s entire range driving within these cities. At the same time, this is better than not setting up any infrastructure at all (see General Motors’ apathy with regard to the Chevy Bolt). 

Overall, Hyundai should be commended for its courage in bringing an expensive and largely still unknown and untested piece of technology to India. They promised to bring the car to India; they delivered. They promised to manufacture it in India; they delivered. They promised to price it at ₹2.5 million; they delivered. Now it remains to be seen how attractive Hyundai can make the Kona to sceptical Indian consumers. With the new incentives, the price of the car may be further reduced to ₹2.1 million, making it attractive to upper-middle and upper-class Indians. If there’s enough demand, the Nissan Leaf and Renault Zoe may be tempted to test Indian waters next. The next decade is going to be very exciting for EVs!