Electric vehicles: who will bell the cat first?
03 December 2018
Greenfuel Energy Solutions promoter Akshay Kashyap, an advisory committee member of the Automotive Research Association of India (ARAI) for CNG application, and a member of the Automotive Component Manufacturers Association of India – Sustainable Technology Development Committee shares his perspective on green vehicles with domain-b's Nithin Rao
Electric vehicles (EVs) are an inevitable aspect of the automotive journey in India and the next few years will see a growing number of cars, taxis, buses, trucks, autorickshaws and other vehicles running on electricity.
Akshay Kashyap, an advisory committee member of the Automotive Research Association of India (ARAI) for CNG application, and a member of the Automotive Component Manufacturers Association of India – Sustainable Technology Development Committee (besides many other bodies), started Greenfuel Energy Solutions Pvt Ltd in 2006 with his own capital of Rs 40 lakh.
The primary objective was to engineer and supply components for vehicles running on natural gas (CNG). In 2016, Greenfuel ventured into designing and manufacturing of Li-ion battery packs for e-mobility and Energy Storage.
Earlier this year, the ministry of road transport and highways recognised Greenfuel as “the largest and most innovative Company for CNG vehicle components.” It was also nominated as the top 5 innovative companies in Annual Supplier Conference by Volvo Eicher.
Kashyap talks to Nithin Rao in an interview.
As a member of the Inter-Ministerial Technology Advisory Group (IM-TAG) for electric vehicles, could you tell us about the current state of the electric vehicles segment in India? Has the development slowed down, and if so, what are the reasons?
The government is looking to encourage this segment with upfront subsidies. We are hugely encouraged to see that there is a definite commitment to push electric vehicles. The policy document is eagerly awaited but it is clear the government is set on doing the right thing for this vital sector as part of its commitment to sustainable growth.
Is there opposition from the automobile sector to the changeover to electric cars?
The automotive sector has to meet BS6 emission targets by 2020. This is not easy. Further India is a cost sensitive economy; more than 70 percent cars sold are in the Rs 5-6 lakh category. Therefore, it is not easy for automobile companies to produce and sell electric cars as the price points will be higher.
There have to be aspirational vehicles for people to want to own them. Further new business models for vehicle "ownership" need to evolve to have higher penetration of electric cars. Going forward, we expect to see different forms of hybridisation. The industry is looking for a clear policy and technology roadmap from the government.
What are your views on the current state of electrification in the automobile sector in India? And when do you expect major changes and adoption to electric cars?
We will see major adoption in the two-wheeler and three-wheeler segment and types of vehicles that form part of public transport. Every manufacturer has intentions to look at different levels of electrification. Some are looking at it in-house and some are investing in start-ups in this area.
The key questions is "who will bell the cat first?" OEMs like Mahindra have been committed to electric vehicles for a long time. Also there is huge penetration of E-rickshaws in the Indian market which has given rise to new entrepreneurs. Adoption will take at least 3-5 years for electric cars.
Could you give a similar assessment of the industry in the US, China and Europe?
In China, the industry grew mainly because of huge government subsidies and restrictive legislation. If you count just the penetration of electric two-wheelers there are more than 21 million vehicles. The government there passed a legislation banning ICE engine for two-wheelers in Beijing to curb pollution.
All car makers are mandated to have at least eight percent of their production as electric vehicles. This has led to huge scale cell manufacturing and the entire eco system of EV component manufacturers. Today China has the world’s largest population of EVs in the world.
The US has different dynamics. There people drive for longer distances and are used to ‘muscle’ cars. TESLA has made a mark as it is an aspirational product. What you see though is larger penetration in agricultural machinery like lawn mowers and also in forklifts and automated guided vehicles in the US.
The one anomaly has always been California which had its own legislation for emissions and there you could see a huge penetration of hybrids like Toyota Prius which has been a huge success.
Europe has always been at the forefront. There is a very good penetration of two-wheelers, E-bikes and also electric vehicles for personal mobility. Mass adoption of cars is still a long time away but Norway is a great example where electric cars are 27 percent of vehicles. This was primarily driven with non-fiscal incentives like no taxes, no parking charges or congestion tolls, and a ready availability of charging stations.
Being one of the largest suppliers of auto components to vehicles running on alternative fuels, what is your view on the general acceptance of this key segment - both by traditional manufacturers and consumers in India?
When we started we were absolutely niche. The automotive industry had CNG vehicles because they had to. Today that is changing rapidly especially for CNG. This is because everyone realises that traditional diesel vehicles will become more expensive to meet the stringent BS6 norms and then the CAFÉ norms will force auto manufacturers to reduce the overall CO2 emitted per vehicle.
For EVs it's a tough call for traditional manufacturers as they will need to change their business model.
When do you see the widespread emergence and acceptance of vehicles based on cleaner and safer fuels in India and the rest of the world?
I don't have a crystal ball but I can say that there is so much more interest in cleaner sustainable technologies because all companies realise that if they do not do it someone else will.
Having said that there is still a long way to go for traditional ICE vehicles to become redundant. There are different triggers for the same and governments will have to play a huge role to bring in tougher legislations for emissions. This will definitely play a large role.
Are other components of the sector - including commercial vehicles, buses, trucks and three-wheelers - slower than the passenger vehicle segment in India in the adoption of alternative fuels?
Not at all. In fact, three-wheelers and buses have always been early adopters. Cars were actually much later except in taxis. But that was mainly because of the Supreme Court ruling that mandated all public transport running in Delhi NCR to run on CNG. That was the first trigger and now it has become mainstream even for delivery trucks operating in Delhi NCR.
What are the major expansion plans you have for Greenfuel?
We believe we are now entering the upward growth curve for the era of sustainable mobility. We do have strong expansion plans both in gas fuels and Electric Mobility. I cannot divulge more information but I can say we will look at aggressive expansion, and innovation to adapt product solutions for the Indian market. Raising money is definitely on the cards.