The push for EVs will drive the development of an ecosystem
Kaushik Madhavan, Vice President, Mobility Practice, Frost & Sullivan, spoke to Milton D’Silva during the GIL 2019: India event at Mumbai.
Will the ownership pattern of cars make way for a service model at the mass level?
With the advent of Uber and Ola, I admit that ownership is reducing a little, but that does not mean the auto industry is slowing down, or going forward vehicles sales will slow down. What is going to change is the ownership and usage pattern. The younger generation, the millennials, are not interested in purchase and ownership. All they are interested in is having access to the right kind of mobility solution as and when they need to travel. So that way, we will witness an increase in subscription model, by which I mean you pay a certain amount, say Rs 30,000, and get a vehicle from Mahindra or Hyundai, use it for a couple of months, then go for a change in the model. So this flexibility in choosing the right type of vehicle based on your needs – a compact or a SUV – is what is going to drive mobility. So from a passenger car OEM’s perspective, this is good because then they will be able to design and develop vehicles aimed at specific user segments.
In spite of all the talk, the number of EVs, especially in India, is insignificant. How far is tipping point?
The push towards electrification that the government is working on with fairly ambitious targets, we feel that this is going to drive the development of an ecosystem. By ecosystem we do not mean just the OEMs and component manufacturers, but battery manufacturers, energy utilities, the charging stations infrastructure, etc. The positive thing is, about 11 States in the country have an EV policy, which is a very good sign because this way they are taking responsibility to develop the ecosystem at the state level and not depend on the Centre for everything.
One of the weak links in this chain is the battery as we do not have any domestic manufacturer of EV batteries. How do we manage this problem?
This will also change gradually. Frost & Sullivan works closely with a couple of battery manufacturers in Europe who are looking for partners in India; and then there are big players in India like Exide and Amara Raja, who are looking for such global collaborations to manufacture batteries for EVs locally. This is one part of the equation – to localise battery manufacturing to make it cost effective. The second part of the story is the battery chemistry. Today if you speak to the likes of IIT-Madras and other research institutes, a lot of efforts are dedicated to developing new battery chemistries, and they will tell you Lithium-Ion is just one part of it and in the near future there could be other chemistries developed, which could be far more economical. So while as of today India does not have the Lithium-Ion processing technology even if we get access to the raw material, research is happening on multiple fronts. There could soon be multiple options, and the applicability will determine what type of battery will be used.
The conventional foul powered cars are also getting leaner, lightweight and economical. Will they compete with EVs?
I do not think so. The basic difference between the improvements happening in conventional engines is linear, incremental improvement, whereas for EVs it is going to be exponential increase. Today we are talking about the Hyundai Kona, which promises 450 km on a single charge. Now realistically it is probably 300 km, but still it is much better than anything in the market. So the developments in the EV space are very rapid and we will soon have EVs with efficiencies right now seen in Europe, with a range that is comparable and much more than what an average person needs for daily commute, or even for taxis. So I think we are getting there and if we successfully create that infrastructure – public charging, battery ownership or swapping or leasing models – electrification can very well be mainstream soon.
Coming to autonomous vehicles, even in countries with more developed infrastructure, the view is more optimistic about autonomous cargo trucks rather than cars?
Our views are very similar. In fact, even before commercial vehicles, autonomous tractors are going to become more prevalent, because there you have a fenced area and the terrain is well mapped, which offers ideal conditions for autonomous operation. Mahindra is doing a lot of work on this. Not just autonomous tractors but also off-road vehicles and construction equipment will happen first as far as autonomous mobility is concerned.
What will be the ideal mix of mobility for India, especially in urban areas?
There are a lot of mobility options today between private and public transport. If you look at it from the government’s perspective, the priorities are clear. One is, the focus should on mass transit or public transportation. The second step is multimodal mobility, which means a seamless integration between different modes of transport. For example, last year at the MOVE Summit, the Prime Minister spoke about the Unified Metropolitan Transport Authority (UMTA), which I think is a great solution. Because with one subscription – a card or an app – you will have access to multiple modes of transport – train, bus, taxi, auto – which we do not have today. There is no seamless integration, in fact no integration at all. That should be the next step, because from the customer’s perspective, they should be able to pick and choose the right mode of transport based on the need. Unless we do that, no move for decongestion of the roads is going to be successful. So we need to create that integrated multimodal transport system. That should be the focus.
Will this happen in the near future?
Yes, it will. There are discussions happening in that direction, and while translating it into reality is not going to be easy, we need to make it happen. At the moment we are creating metros in major cities – Delhi/NCR has it, as also Mumbai, Bangalore, Chennai, Lucknow and now soon other cities like Nagpur and Pune too. But the feeder transport is missing for reaching the final destination. So we also need to create the supporting infrastructure for the last mile connectivity. For example, Gurgaon has these e-rickshaws connecting the Metro Stations to the IT Hub and other office complexes. Unfortunately, this does not exist at other places. We need more such solutions that are very regional, very local, which will also be flexible enough for larger numbers.