Sudarshan Venu is gung-ho about electric and is categorical that it will play a huge role in the Indian two-wheeler industry. “I think electric is probably the most important factor today, along with a couple of others, that is going to be vital for the future of the two-wheeler industry and the automotive industry on a larger level,” says the Joint Managing Director of TVS Motor Company.
It's October 26 and he has just landed in Singapore and the video interview (with Murali Gopalan) is happening from his car as part of Autocar Professional’s Two-Wheeler Week. The 32-year-old, who is clearly a man in a hurry, is pulling out all the stops to ensure that his company is ahead of the curve in the electric mobility sphere.
“For two-wheelers, I think electric is very important and something we are investing in terms of products, teams, partnerships and extended enterprise as well,” says Venu. He makes no bones about the fact that TVS Motor “would like to play a leading role” in this transition to electric.
As part of this effort, it will launch a “good range” of electric products. “We have started with iQube but you will see much more in two-wheelers, three-wheelers and across segments,” says Venu. This will include passenger and cargo three-wheelers which means TVS Motor intends to go out all guns blazing.
“We have 500 engineers who are working behind this and we also have partnerships for charging infrastructure,” he continues. Re-skilling people is “very important” for a lot of young engineers to have a good understanding of electric and electronics and “not just areas” purely confined to mechanical (engineering).
“Continuous education will play an important role and universities will hopefully change over time. They will then start producing engineers who are ready for not just pure mechanical — but mechatronics kind of engineers who have electrical understanding also which is much more important,” avers Venu.
The other important task on hand is to change the culture of the company and the “speed at which we work”. As a result, making that culture shift means the emergence of “really a new economy” kind of company. “That is something we are working on as well,” he adds.
This will see greater levels of empowerment and a change in the speed “at which we work” and the nature in which work is done. “All these have to be re-looked and need to be faster,” reiterates Venu. Sure, finding the right talent is always a challenge for companies involved in this transition to electric but this is “true for everybody”.
In his view, TVS Motor has “a great talent pool” of engineers who are committed to this future and this way of working. “That is something that really excites us. Also, this is something that companies have to keep up with going forward,” says Venu.
TVS Motor believes that home charging will play an important role and is, hence, offering this to all customers “which we install”. At the same time, public charging is also important both from range anxiety as well as a convenience point of view. “Therefore, you saw the partnership with Tata Power and hopefully more (will emerge) for charging infrastructure,” he elaborates.
From Venu’s point of view, the inherent strengths are already in place when it comes to capacities both in terms of people and products. Capacities will be ahead of the market, he affirms. “As demand moves (upwards), we will be there to delight customers and play a leading role in the space,” he says.
Cannot rely on FAME alone for future growth
Even while the shift to electric is still happening at a gradual pace in the Indian landscape, it has certainly gathered momentum in recent months thanks largely to the generous subsidies from FAME 2 as well as incentives offered by a host of States. Throw in the concessional five percent GST levy (compared to 28 percent for petrol-powered bikes and scooters) and it is hardly any surprise the customers are queuing up for electric two-wheelers like never before.
Venu admits that it is “really tough” to put a number to the likely conversions going forward since there is no telling how long these subsidies will last. By the end of the day, he adds, market forces, customer acceptance, charging etc will determine the “exact pace”.
He is also candid enough to admit that the Centre cannot afford to extend these subsidies forever. It is an established fact that when countries like China started pulling back on subsidies, there was a blip in the market since the same electric vehicles became dearer overnight.
“We have to really look at the medium- and long- term trends and then invest behind that. And with battery costs coming down and customer acceptance going up, I think an equilibrium will be achieved. It will take some time; there might be ups and downs but we need to look at the actual trend which is compelling and invest behind them,” affirms Venu.
Yet, as far as TVS Motor is concerned, “we will be ready” for an aggressive pace of change going forward. “We will invest and launch a range of products in the next couple of years to really show our commitment,” he reiterates. The company will seek to play a leading role in the emerging market and the “huge opportunities” that will be available in both two- and three-wheelers.
Even while electric has become a fashionable word in recent times, there is no getting away from the fact that OEMs have invested substantially in the transition to Bharat Stage VI emission norms. These came into effect from April 1, 2020 barely a week after the country went into a three-week lockdown, with more to follow, following the outbreak of Covid-19.
With cleaner internal combustion engine (ICE) two-wheelers already on the roads, is there really a need to accelerate the move to electric? Venu readily agrees that BS VI has reduced emissions by about 93-94 percent which pretty much implies that new bikes and scooters are “significantly cleaner”.
Yet, it is his view that “we must do what needs to be done to act in the way of sustainability”. Even while BS VI has gone a long way in contributing to substantially lower emissions, “you still find in India” that a bulk (of the emissions) comes from BS III and IV vehicles which includes two-wheelers.
Estimates indicate that 80-90 percent of emissions come from these products To that extent, the Centre’s recent announcement on scrapping older vehicles is “quite important to ensure” that these older vehicles get off the roads and there are more and more BS VI offerings instead. “This will also bring a reduction in fleet emissions,” reckons Venu.
Going forward, there are “various things” like blending with ethanol to keep the emissions lower and also allow the country to be independent of costlier crude oil imports. This progress “will continue to happen” and the market will have a certain transition time in terms of customer acceptance, range improvement, cost reduction and so on. “During this time, ICE will still have relevance and some (relevance) after that too,’ concedes Venu.
Could export made-in-Chennai EVs in the future
Companies like TVS Motor (and Bajaj Auto) also export significant numbers of bikes and scooters, which means that balancing the product mix at their plants will become a daunting task once electric gains more momentum. After all, ICE two-wheelers will still need to be shipped out which means that planning will become even more challenging with electric part of the product portfolio.
TVS Motor Co has recently inked a strategic partnership with Tata Power to develop EV charging infrastructure across India and also deploy solar power technologies at TVS Motor locations.
“That is part of the transition which will have to be managed. Electric at some other countries may take a little longer than in India though I think it has a promising opportunity in some of them as well. So we have to look at the opportunities and see how we can really capitalise on this,” says Venu. This period is expected to see development in ICE both in India and other countries — “and we will invest in new products there as well”.
Despite this tightrope walk challenge, the big focus is “really electrification” where TVS Motor has created an aggressive template for the future. “We will invest in other options to make ICE cleaner and greener but electric is the important focus. Electric is something we are really excited about,” says the JMD.
Across the automotive industry, there is a lot of talk about fuel cells and other options like hydrogen. “We really believe that for two-wheelers and small three wheelers, electric will be the most prominent and promising option,” he adds.
His optimism is also based on the fact that battery costs are on a downward curve coupled with an improvement in technology. “The cost is coming down and the range is going up. New chemistry is being found which is being developed and will have lower costs,” says Venu. In time, this will “come to an equilibrium” where the cost makes a lot of sense and “we should be committed” to invest in electric.
He also maintains that battery life will only get a fillip in the future. “There may be questions here and there but I feel that it is only getting better. Technology is improving constantly with so much global investment in the field. Therefore, we must invest in newer and newer chemistries going forward,” maintains Venu.
While sceptics constantly argue that it is legislation which is eventually driving change, especially in the context of the Volkswagen diesel scam of 2015 which truly proved to be the inflection point in a way, the TVS Motor scion does not quite buy this argument.
“It is not just regulation, but also the global move towards sustainability, ESG (environmental, social and governance) and these kinds of things. It is beyond regulation. It is about the world, people, climate change and wanting to do something to address it. Everybody is going in that way,” he maintains.
Consumers are the key to “determine the path of acceptance” more so in a business where “consumers are everything”. According to Venu, the key is to produce world-class products in India which are hopefully better than the current ICE options or at least as good as they are. “That, I think, will make this acceptance (of electric) better,” he adds.
Venu then points out how Indian two-wheeler companies have shown their global competence over the years going by their “amazing” export numbers. “If you go to Latin America for instance, there are so many Indian products,” he says.
The key is for manufacturers to raise the bar “whether it is TVS or any other major OEM” and the results follow. “You see what the industry has done in the ICE two-wheeler
area and I am sure it will happen in electric also,” he adds.
Even while the market is in the midst of a not-so-great growth phase right now, Venu would much rather look at the bigger picture instead of being bogged down. “We have to face obstacles and there are some fast and slow years. These are really mild ups and downs and we have to invest behind the fast growing trends,” he says.
Would Indian two-wheeler makers also be open to the idea of ‘coopetition’, which is about striking the balance between collaboration and competition? After all, long-time foes like Honda and Yamaha have buried the hatchet and are jointly working on small scooters in Japan while being part of a battery consortium which includes Kawasaki and Suzuki on the one hand and KTM and Piaggio on the other.
Can a similar situation be envisaged for India too? “There is always an opportunity (for coopetition). For instance, the charging socket can be standardised. At the same time, we all want to compete and do better in batteries, motors, products et al,” says Venu.
The top priority is to focus on continuous innovation and stay ahead of others since this will be better for the consumer eventually. “In any way, this should not stop your innovation or investment or create some lower standards. Provide the best cutting-edge standard with a moving goalpost and better solutions will emerge every year,” he adds.
What is especially critical for costs to stay competitive is localisation and this is not going to be cakewalk for sure. Venu agrees that there are challenges when it comes to cells, e-drivetrain parts and so on especially when there are countries which are dominating the global supply chain. “We must have our own supply chain and not depend on others,” he says.
The top priority is to plan the EV transition in such a way that “it is to our advantage”. For this to happen, it means going local aggressively. “We must work and make it happen. A localised supply chain and renewable power is key to ensure that the benefit of electric is there for the whole ecosystem,” declares Venu.
This feature was published in Autocar Professional's November 15 issue.