Subsidy cannot drive vehicle electrification in small cars : RC Bhargava

by Mayank Dhingra 23 Dec 2018


As auto industry the world over sits on the brink of witnessing a major transformation in the present day mobility solutions to move to more sustainable technologies such as vehicle electrification, it, however, is not that suitable in India's case, says industry veteran and chairman of Maruti Suzuki India, RC Bhargava.

“Electric mobility has a lot of problems in case of India where most cars don't get parked next to homes and thus, there will always be a charging constraint for these vehicles,” Bhargava said addressing a media gathering in New Delhi today.

“However, we need to lower the consumption of fossil fuels in order to reduce the drainage of our foreign exchange that is spent on importing them, and secondly to also curb the rising environmental pollution in the country,” Bhargava added.

With 14 out of the world's 15 most polluting cities being in India, there is a dire need that serious measures are taken to reduce the PM 2.5 content in the atmosphere of India's key cities. Even though automobile emissions contribute a minor 2 percent to the total particulate matter concentration in the atmosphere, the automotive industry is collectively looking at developing futuristic technologies and alternative propulsion solutions to create a cleaner tomorrow.

Coming to the point of electrification in the automotive space, Bhargava said that with no clear policy in the country, there continues to remain an environment of speculations around the incentives being brought forward for EVs.

He further added, “Electrification in the small car segment cannot be driven purely on the basis of subsidy, where the government cannot afford to subsidise such a large pool of cars, which is not a viable way of doing it and will not solve any purpose. It can only be done in case of large cars, where the number is relatively lesser. However, what is required instead, is a dramatic improvement in technology powering these mass-market vehicles which will lower their prices.”

E-mobility in two-wheelers and cross-subsidy
While there are numerous constraints for EV adoption in the personal four-wheeler space, Bhargava said that e-mobility could be beneficial in case of the two-wheeler segment which doesn't suffer from the limitations of charging infrastructure and that these vehicles should be incentivised for accelerating electric mobility and for cutting down pollution. 

Government could introduce a ‘polluter-tax’ on fossil-fuelled vehicles to incentivise EVs, but, “it should then be done for both cars as well as two-wheelers to drive growth in both the segments equally,” Bhargava added.

CNG a far more acceptable solution
Bhargava championed the cause of alternative propulsion solutions such as bio-fuels and CNG and said that it could be a key enabler towards reducing dependency on fossil fuels, as well as being a solid interim solution to full vehicle electrification in the country.

“CNG is a far more acceptable technology than anything else, wherein it reduces fossil fuel consumption as well as lowers environmental pollution,” Bhargava said. 

With Maruti Suzuki offering a host of vehicles from its expansive portfolio in the bi-fuel option of petrol-CNG as well, the company says it is already observing a 50 percent year-on-year growth in the sale of its CNG models in the country, and recently surpassed the 500,000 sales milestone since it first introduced a factory-fitted option back in 2010.

“So, my view is that we should first look towards setting up and expanding infrastructure for CNG to create a robust network,” Bhargava concluded.