Auto, power firms taking baby steps on electric cars

Last month Elon Musk announced the delivery schedule of the much-publicised Model 3, the electric car for the masses, at $35,000 (Rs 22.4 lakh) apiece.

The Tesla founder, who has promised to manufacture in India, however, did not give any deadline, but had tweeted that he was looking for import duty concessions till the factory was put up. With or without the 60 per cent duty on Model 3, the car can remain only a novelty.  

Action in India

But the launch has turned the focus once again on India’s preparedness to shift to electric cars. Especially with the government setting an ambitious target that by 2030 all cars will be electric, which, most car makers say, is over the top and not achievable. 

That it might be. After all, only Mahindra Electric Mobility has an electric vehicle running on Indian streets, but sells limited numbers. But prodded by the government there is already a lot of action on the ground. State-owned companies — Power Grid Corporation, NTPC, Bharat Heavy Electricals Ltd (Bhel), and Rajasthan Electronics and Instruments Ltd — and a consortium led by Mahindra & Mahindra, Ola, and Bengaluru-based Lithium Urban Technologies Ltd are putting together 400-odd electric-charging stations (currently there are 25) in the country. And they are being supported by a 50-60 per cent subsidy being offered by the government. One key inflection point for consumers is to ensure that they are as comfortable charging their cars as they are with refuelling now. 

The other inflection point for car owners is the price of electric cars nearly matching that of gasoline cars, making them an attractive preposition as they would save on running costs. The key barrier is the cost of the battery pack, which constitutes 30-40 per cent of the cost of an electric car, and is imported and therefore expensive. To address that problem, a Suzuki-led consortium and the space agency Indian Space Research Organisation (Isro), in collaboration with Bhel, apart from Sun Mobility (promoted by Chetan Maini, who introduced electric vehicles), have decided to provide the technology or set up manufacturing facilities. And of course car makers — Nissan, the Tatas, Volvo, and Mahindra Electric, and Hyundai — are taking baby steps towards experimenting with electric cars even if it might be years before mass production. 

Laying the infrastructure

To address the question of charging stations, Power Grid is doing feasibility studies of what model to follow — whether to set up ultra-fast charging stations (a car can be charged in 15 minutes) or put up more scalable and cheaper fast-charging stations (which take 90 minutes to charge the battery). Says Subir Sen, chief operating officer (CTU planning and smart grid), Power Grid: “We will have a cost-effective model. With the push towards non-fossil energy (like solar) by the government, which will be used to provide electricity in the day time, there will be enough surplus thermal power, which can be used to power electric vehicles.”

Ultra-quick charging stations of course come at a steep price tag of Rs 20 lakh and they look unviable at the moment. Mahindra Electric, which is working on setting up such stations, says that fast-chargers need an investment of Rs 3-4 lakh and are the most viable option. Critics say customers will not be comfortable if charging takes so much time. But Mahesh Babu, chief executive officer of Mahindra Electric, has a different view of the matter and says: “We have seen that people do not use their car for travelling more than two-four hours daily, the rest of the time it is in the parking lot. So there is enough time to charge it for 90 minutes as running costs are much lower than gasoline.” 

Work has also started on reducing the cost of the car and undertaking work indigenously. Maruti Suzuki Chairman RC Bhargava says: “There is no way you can make an electric car at less than Rs 5 lakh until you manufacture the battery packs in the country. And without that price point you cannot have mass use of electric cars.”

He says an imported lithium ion battery, on which a car can run 140 km with its AC on, could cost as much as Rs 3 lakh. But experts say this could be cut by half if the packs, including the cells, are made in India. And the good news is that with growing volumes, especially from China, battery pack prices globally are going down quickly. 

Suzuki has taken the first step by setting up a joint venture with Toshiba and Denso to manufacture lithium ion battery packs in India with an investment of more than Rs 1,200 crore in Gujarat. And Isro has modified the battery it uses in satellites for electric vehicles. It has tied up with Bhel to set up a unit to manufacture them with an investment of Rs 100 crore.

Maini's Sun Mobility is working on building smart batteries for electric cars and providing the technology to make renewable energy-based battery stations. "Our aim is to provide end-to-end mobility solutions, which are scalable and cost-competitive. We will work in partnership with original equipment manufacturers (OEMs) and mobility solutions providers," says Maini, vice-chairman, Sun Mobility.

There are others working on developing key electric vehicle technology indigenously, which could reduce car prices further. For instance, Tata Elxsi is developing both the energy management and supervisory control systems for such cars, which they will license to car makers. “Unlike in conventional powertrain, where the technology is closely held by some OEMs and a few companies, the market is open in electric cars. And India has an advantage because about 40 per cent of the cost for these systems is software,” says Nitin Pai, senior vice-president, marketing and strategy.

But has the government got its act together to achieve its mega target? At one level, the subsidy scheme for manufacturers of electric vehicles, charging stations, and those undertaking pilot projects has been a hit: It has disbursed over Rs 155 crore. But the money might be a pittance (unlike large subsidies doled out in China) and there are concerns whether the scheme, which ends in September, will continue. 

Also critics say the regulations required to kick off electric vehicles are a long way off. And the decision to hike the goods and services tax (GST) on hybrid cars from 30.3 per cent to 43 per cent, many say, has killed the large investments made in hybrid cars, which was an intermediate stage to move to electric vehicles. Until of course the government reconsiders. “Globally countries are moving from hybrids to electric vehicles, we are trying to be foolhardy by breaking that link. It will be a disaster,” says a top executive of a leading auto company.    

Charging up the green future
  • State-owned corporations like Power Grid, Bhel, NTPC and private players like Mahindra-Ola are putting up over 400 recharging stations. 
  • A Suzuki-led consortium is investing Rs 1,200 cr to set up a lithium-ion battery plant 
  • Isro has tied up with Bhel to manufacture battery packs 
  • Sun Mobility will offer both battery and charging station technology to vendors 
  • Tata Elxsi is developing technology for energy management systems and supervisory controls, which they will license.
  • Government has forked out over Rs 155 cr as subsidies to push electric vehicles  

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