The electric vehicle industry in India could be amongst the youngest globally in terms of volumes, but it certainly is one of the most exciting. In many ways, given all the talks about reducing carbon emission and threats of climate change, the need for sustainable mobility is felt more than ever in a world tackling with the challenges of a pandemic.
Representing the EV manufacturers, Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles and CEO, Hero Electric at the Autocar Professional webinar on Environment Day, ‘EVs: Pain or Gain Ahead?’ made a case for faster adoption of electric vehicles. The other panelists at the webinar included
- Anil Srivastava, Adviser (Transport) and DG, DMEO, NITI Aayog
- Mahesh Babu, MD and CEO, Mahindra Electric and Chairman, Electric Mobility Group, SIAM
- Sullaja Firodia Motwani, Founder and CEO of Kinetic Green
- Nishant Arya, ED, JBM Group
Gill started his address on a passionate note. He felt when it comes to environment each one has to think how they can make a difference at an individual level, national level, or global level to drive adoption of EVs.
He said, “The writing is there on the wall, that ICE vehicles may not be there in the longer term. The equation is there for EVs that one day will come, no one knows if it will come in days, months, or years, but the certainty is there. What we all are talking is to bring that day nearer to us, the horizon closer to actuality.”
He said SMEV is working towards accelerating the pace to bring EVs towards mass-adoption. Gill pointed out that it is not just about introducing electric alternatives in the public transport, but to bring them to the customer, who needs to like and find value-for-money in it or he/she has to have a mindset of changing over.
“The focus is on multiplying those kind of customer so that line starts, and ultimately the line starts flowing,” said Gill. This (increasing demand) will result in driving volumes for OEMs, supply chain, government policies getting aligned. “The pull of the customer is the foremost cheer,” added Gill.
How to drive EV sales?
The balance between demand and supply forms the basis of economies of scale and the story for EVs is no different. Sharing his thoughts on how EV sales can be accelerated Gill said that customers are very savvy when it comes to where they wants to put their money. They look for various options they have, and when it comes to purchase of a vehicle of a two-wheeler, there are many good products available in the market some for decades, “India has making good quality cars, three-wheelers and two-wheelers for many years. He is thinking (comparing EVs) if they are as good as their ICE-counterparts.”
Secondly, the customer has a concern on the build quality and after-sales assurance of the EV. Third, being the risk factor, “Am I one of the very few guys that is taking the risk of buying an EV when there are very few of them on the roads. Why should I be the first one? Let me wait for few more years for my next two- or four-wheeler to be an EV,” stated Gill on the customer’s perception. He said there were other factors too in the customers mind, like environment. He said that after interaction with around some of the 300,000 Hero Electric customers, around 30-40 percent of them said that they were happy to have contributed to a green environment, but only after purchasing and using an electric scooter.
Gill said that there are two primary objective of electric vehicles, one being the environment and the other being crude oil conservation. “This are the two large objectives of the industry, other than being a very player and creating new set of industry and generating huge employment.”
All stakeholders need to come together
The industry veteran said that the EV adoption has three major stakeholders – manufacturers, policy makers and the customer – who must work together to drive sales. “The industry and the policymakers need to work together for faster adoption. In the post-Covid scenario for two-wheeler, customer behaviour is important. The need to be safe and social distancing the new normal we are all adopting to. There is lurking fear in the minds of the large population used to travelling in public transport. From that point of view, need has shifted to personal transport from public transport.”
He said for the people who have been using public transport what are the cost-effective and sustainable alternative being three – buying a used two-wheeler (cheapest option), buying a new petrol-powered two-wheeler (expensive), and the last option being buying an electric two-wheeler which are creating a buzz in the market lately. “Those customer who filter down to electric, they discover a lot of cash conservation in terms of running cost. Electric vehicles makes savings on running cost, a compelling equation for customers. The only factor that reduces customer confidence against EVs is that there aren’t many electric two-wheeler users around. If somehow we can create this adequate density in at least some polluting cities, this may tip the balance in favour of EVs going forward,” said Gill.
He said that it is a clear case of early adopter vs mass adoption (for customers). According to him, mass adoption can only happen if critical mass is created which cannot happen in isolation. This would require policy makers and OEMs to come together. “At present everyone agrees that tail-pipe emission needs to be reduced, and it is time for a concentrated and focussed attempt by all stakeholders together to put 1-2 million EVs on the road and then let the momentum build up automatically. At present, the EV sales volumes are low in India, but we need to generate demand in a way that the prices of cells can be brought down, which will further reduce the overall cost of the green vehicles,” concluded Gill.