Popularly referred to as the 'future' of automobile technology, the electric vehicle (EV) industry is not particularly enjoying its present. This despite the fact that in terms of savings per km, EVs have an advantage of 40 per cent over regular cars.
The government has made a lot of promises but delivered little, say the players in this segment. Consider the Centre's National Electric Mobility Mission Plan 2020, which includes a Rs 230-billion programme to spur EV and hybrid vehicle production over the next eight years, to get six million such vehicles on the road by 2020. At least four million of these are expected to be in the two wheeler segment.
The reality is very different though. With only one successful attempt to keep four-wheeler EVs on the road, Mahindra Reva is the only player in the market. The country's first passenger EV, the Reva, sold only 5,000 units since its rollout in 2001 before being taken over by auto major Mahindra & Mahindra in 2010. And nearly 40 per cent of those 5,000 cars were exported to other countries, according to Chetan Maini, founder of Reva.
In 2012, Mahindra inaugurated the Rs 100-crore EV manufacturing plant and the 'Future of Mobility' vision in Bangalore. At the time, the company said it would initially manufacture 6,000 cars but hoped to reach a maximum capacity of 30,000 vehicles within the next three years. This was followed by the launch of the e2o model with much fanfare. The newly designed and developed car boasted a better range and features than its predecessor. The company refuses to share the exact number of e2os sold since its launch, but reports indicate that it is upwards of 400-450 units.
Unwilling to completely bank on the domestic market, the company is looking to export the two e2o models and is currently awaiting approval from European agencies. Commenting on the reason for low domestic sales, Maini, incumbent Chief Technical Officer and Strategist at Mahindra Reva, says: "First, this is to do with government policy. There should be long-term investment into the segment as less than 30 per cent of people are aware of EVs. India is a good market, but it will take longer to develop."
On the cost of the Reva, which is priced upwards of Rs 6.5 lakh (ex-showroom), he says technology continues to remain expensive due to limited production. "Globally Norway is leading the way as 9 per cent of the total cars sold there are EVs. Here it's expensive. The subsidy that was there earlier has been withdrawn and there is a different policy from state to state. There is no uniformity in tax," he says.
The government has initiated a policy to put 6-7 million xEVs (full range of hybrid and EV) on the road, according to the National Electric Mobility Mission Plan (NEMP) 2020. This includes two-wheelers, buses and four-wheelers. The NEMP document states that it will result in fuel savings of 2.2-2.5 million tonnes of fuel saving by 2020.
"The government removed the subsidy at a time (2012) when there was growing interest in EVs. People buying electric cars should be given tax breaks and other benefits as they are helping the environment and economy. The government-initiated actions are just half hearted. They can do so much more for EVs," says R Chandramouli, an industry expert and former chief operations officer at Mahindra Reva.
Physical infrastructure too is a cause for concern. "Currently, EV owners charge their vehicles at home. There is anxiety about buying an EV. Government has to put charging infrastructure in place," adds Maini.
Dhivik Reddy, executive director at Bangalore-based two-wheeler EV maker, Go Green BOV (battery-operated vehicles), too says support infrastructure is the key challenge. "While the authorities are waiting for more EVs to hit the road before setting up more charging stations, customers are waiting for more charging stations before they invest in an EV."
The two-wheeler segment constitutes 2-3 per cent of the EV sector, he adds.
According to estimates, two-wheeler EV total sales rose from 2,28,408 units in FY12 to 3,25,798 units in FY13. Compare this with the 1,37,97,748 units of two-wheeler IC (internal combustion) vehicles sold in FY13.
EV makers are spending more time spreading the advantages of owning a 'green vehicle'. Approximately, 70 per cent of an EV cost is battery and electronics and, according to Maini, is increasing at over 9 per cent each year. Unwilling to reveal the cost of the battery, he says that "benefits of EV technology are not apparent immediately". Drawing a comparison between a petrol/diesel car and an EV, he says the cost per km with a car that averages 12-13 km ('75 per litre gasoline), works out to '5-6 per km. "An EV costs less than one-third of what it costs to run a car on gasoline," he says. The company has started pilot projects in Delhi including partnering with a car hire company for '200 for two hours to raise 'awareness' and give people the 'experience' of an EV.
Despite the low volumes, Reddy is optimistic about growth. "There has been a CAGR of 48-52 per cent for the BOV segment when compared to our internal combustion (IC) counterparts," he says, adding that every time there is a petrol price increase, enquiries for electric vehicles double. "I know that the customers enquiring about EVs when petrol prices go up may not become instant customers, but they are potential customers." Published by HT Syndication with permission from New Indian Express. For any query with respect to this article or any other content requirement, please contact Editor at email@example.com