Interview with Sohinder Gill
CEO, Hero Electric & Director-Corporate Affairs, Society of Manufacturers of Electric Vehicles
Date:
13 Aug 2016
| Author: P.Tharyan
Do you think
e-vehicles are the need of the hour?
The answer may have different perspectives
considering various factors such as societal conditions, consumer preferences,
level of infrastructure etc. In terms of the Indian society, a push for the
adoption of electronic vehicles is the need of the hour. Given the fact that
crude oil accounts for about 34% of India’s total imports, and that almost all
the major Indian cities feature on the world’s most polluted places lists, I
would say that our country needs to adopt e-vehicles on an emergency basis to
stop these twin menaces of economic burden and atmospheric pollution from
assuming epic proportions.
In 2015 the Indian government
introduced its Faster Adoption and Manufacturing of Electric vehicles (FAME)
initiative. Has this initiative been positive for the e-vehicle industry? Or is
there a huge agenda still there for the government to address in terms of
policies related to the electric vehicle industry?
The National Electric Mobility Mission Plan 2020, of which FAME
is a subset, was an excellent policy which was well-researched, drafted and
documented. FAME, which is more of an implementation wing of the prescribed objectives
in NEMMP, has, however, not been able to deliver what it promised and was
expected. The major fault has been in the implementation of the incentives
promised to consumers such as subsidies, rebates and cashbacks. ‘Sticker shock’
is still a significant bottleneck for consumers as they realize the initial
cost of acquisition of an EV, whether two-wheeler or four-wheeler, is about 1.5
times more than that of petrol/diesel vehicles. Developing an understanding of
the consequent benefits to follow, such as energy savings and reduced
pollution, in the minds of the consumer was an essential function of FAME and
it has failed to execute it in an optimum manner.
The government needs to address the EV issue on war footing
rather than put it on a backburner after some announcements of exuberance. The
core areas that need to be addressed by the government are:
·
Lack of infrastructural blueprint: Probably the most fundamental aspect which limits the
scope for EVs is the severe unavailability of allied infrastructural
requirements for Electric vehicles such as charging points. It seems the government
has simply jumped onto the bandwagon of EVs to be more ecologically responsive
without having the proper infrastructure, money or vision in place. Even the
period of subsidy provided was short lived, running for only two years between
April 2012 and April 2014.
· Absence of financial support: Providing essential financial support to EV manufacturers is
necessary to stop them from burning out. The support should not come in the
form of emergency doles or debt write-offs, but as a sustained form of financial
investment that will help in market creation. Timely implementation of
subsidies and rebates to consumers as well as manufacturers will help
businesses to launch their vehicles on time without having to wait for the
availability of better financial benefits.
·
Imbibing EVs in government usage: The government can set a precedent by using EVs in
different governmental operations. This would provide an initial market of
considerable size, set an example for citizens and provide a safe ground for
experimentation and practical implementation of EVs. Such stable client base
will also motivate manufacturers to undertake more Research and Development
efforts to further reduce per unit cost of EVs.
·
Non-existent marketing: The government has failed to create an awareness or interest in
consumers regarding the use of EVs. There is no use trying to pass of the buck
to individual manufacturers; given how they have already suffered losses being
in the EV sector, they will be reluctant to further spend on creating consumer
awareness. At such a point of time, the government needs to initiate policies
and implement them with immediate effect. Pockets of small cities could be
identified to initiate an experimentation project. This will help to identify
the real-life problems faced with EVs, and will also serve to be a great litmus
test before launching such vehicles in larger areas.
Recently a Central Minister had
stated that the Indian government is working on a scheme to provide electric
cars with a zero down payment option and that the government is aiming to make
the country, a 100 percent electric vehicle nation by 2030. Is this really
possible? Can the tried and trusted auto technology based on fossil fuels be
actually replaced?
The intention of the government deserves accolades, but the ground
reality is in stark contrast with these projections. To imagine a country as
big as ours becoming 100% EV-driven nation, that too within the next 15 years,
is an improbability, especially when considering the present scenario where only
4000 units have been sold this year. Realistically, however, a marked growth
can be attained if focused efforts are made to enable infrastructure, provide
financial incentive, create market awareness and provide manufacturing impetus
to the stakeholders of the EV industry.
You are the Director-Corporate Affairs
of the Society of Manufacturers of Electric Vehicles (SMEV), the only global
representative body of the Indian Electric Vehicle Industry. Who are the
members of the body and what has this body achieved to date? Obviously, its
agenda is far from over, so do you think this body will be instrumental in
helping chart a great change in the Indian automotive industry?
SMEV is a 6-year-old organization which has spearheaded the
evolution of the EV industry in India. It was originally constituted with 40
pure EV vehicle manufacturers. The organization was started with an upbeat mood
as it coincided with the government’s impetus to popularize EVs. Later, as the
subsidies fizzled out, many manufacturers could not survive and the member
count reduced to 4-5. Presently, we are a healthy 13
member organization comprising pure EV manufacturers.
We have been the go-to organization to provide industry facts
and figures to the government and spread awareness regarding the use of EVs. We
have also initiated PR campaigns and activities on our own and have provided
inputs to the government regarding the authenticity and viability of new members
seeking funding. We have served as the eyes and ears of the government for the
EV industry and it has acknowledged our active participation in the push to
realize the vision of popularizing EVs in India.
You are also CEO of Hero Electric
and CEO, Global Business for A2B. How has the company’s business progressed in
the last one year? Has there been a significant jump in sales of your products?
What about the A2B business abroad? Is that performance very encouraging?
Although we have 70% of the market share of the industry, the
volume of sales are so low that it does not paint an encouraging picture. We
expect to be out of the woods in a year and have focused on adopting a bottom-line
approach of minimizing costs. We are
still waiting for the economic ecosystem to turn better for the EV industry as
a whole. In terms of the domestic market, our tie-ups with e-commerce platforms
such as Snapdeal have had a positive impact on our sales; 25% of the total
sales are today being generated from online platforms. We have also partnered
with other players such as ShopClues, Homeshop18 and Rediff.com in a hope to
leverage their huge customer base.
The situation is different in our A2B segment. We have our
vehicles designed in Germany and manufactured in China. Business in foreign
markets is not dependent on subsidies. In fact, our vehicles are much higher
priced in these places and fall under the category of lifestyle products. Our
products abroad enjoy a healthy consumer base amongst individuals aged 50 years
and above, as these users are environmentally-conscious and strive to maintain
a balanced and healthy perspective in all aspects of their life. In an
encouraging shift, even youngsters are getting attracted to EVs which has
resulted in increasing sales as well as greater product evolution to cater to
their tastes and preferences.
Lastly, a two-wheeler without speed
is not thrilling, at least for the younger generation. Are you looking at
developing e-scooters and e-motorcycles that speed significantly and have longer
lasting batteries?
It is true that EVs are often viewed with a skewed vision of
being ‘boring’ cars with limited range, performance and higher cost of
acquisition. Presently, however, efforts are being made to bring in a paradigm
shift in the performance of EVs. For instance, lithium-ion batteries are
replacing the conventional devices, thereby bringing EVs at par with
top-performing IC vehicles. The presence of strong charging infrastructure
becomes all the more essential if such vehicles are to be popularized and
utilized to their optimum.
The incentive for manufacturers to invest in developing such
vehicles, however, will exist only if mass awareness is created to generate a
point of inflection for the EV market. Infrastructural changes are long-term
strategies that will take years to materialize. Till then, however, the
government can intervene with policy frameworks and innovative solutions to
ensure the survival of EV manufacturers. For instance, the giant e-commerce
delivery network is an untapped resource that can be utilized to provide a
market for Electronic Vehicles. Entering into collaborations with online
platforms to utilize electronic two-wheelers for their deliveries might prove
to be a social experiment that can be accepted easily, as these platforms
mostly cater to the environmentally-conscious urban youth. With a little bit of
nudge and lots of motivated efforts from the government as well as other
stakeholders, there is still hope to inspire Indian consumers to turn the EV
way.
