In this guest post, Yash Chitalia – Head of Technical Operations at BrightBlu calls for more proactive participation by Indian OEMs in the budding EV revolution in the country.
Global automotive trends
The internal combustion engine is under pressure from electric power trains globally. Regulators around the world are pushing companies to cut carbon emissions and adopt zero-emission technologies. Car ownership is becoming optional and expensive in the age of shared transportation.
All these factors combined are causing sales of global auto markets to slow down for the first time in a decade. Adding to this are disruptions by US President Trump’s escalating trade wars, a global economic slowdown resulting in weaker consumer sentiments and lower expenditure. And in the case of India, issues with NBFCs and consumer finance do not make the situation any better.
Global electric vehicle sales stood at 1,105,405 units sold in the first six months of this year. This constitutes a 46.9% jump from 752,690 a year ago. This growth completely contradicts the global automobile slowdown in sales.
The absolute numbers of EVs being sold are still comparatively low, but it does show an underlying paradigm shift in trends from internal combustion engines to battery-powered vehicles. That global trend clearly says one thing: consumers want electric vehicles.
Under pressure from stricter government mandated emission regulations and disruptors like Tesla gaining market share, many major auto manufacturers are acknowledging this paradigm shift by investing heavily into making long-range EVs to retain their position in the market and be competitive in this new product line. In the last six to twelve months most of the world’s major auto manufacturers have announced timelines for at least partial electrification of their range.
Even holdouts like Toyota and Ford have suddenly jumped onto the EV bandwagon. German automakers like Volkswagen and Daimler AG – the original inventor of the internal combustion engine – that dominate global automotive markets are switching to electric threatened by the likes of Tesla, BYD and other Chinese OEMs who are currently leading the revenue race in the EV market.
Where is India?
With this change in global trends, Indian automakers are facing the short end of the stick and what lies ahead is a long and hard struggle as multiple disruptive forces reshape the market. The slowing economic growth and accompanying weaker consumer sentiment are just the tip of the iceberg.
There are various forces that are disrupting the Indian automotive industry. The Indian governments push towards electric mobility without a clear policy and clear EV roadmap, Compliant to stricter emission BS-VI standards and the clear shift in consumer behavior from being “price-conscious” to being “value-conscious”.
In addition to lack of lucrative incentives to opt for electric mobility by consumers, the real problem lies with the fact that there are a number of leading Indian legacy automakers like Maruti Suzuki and Toyota Kirloskar which are not willing to act fast to acknowledge the changing global trends. There have been many announcements from Indian automakers without any concrete plans or launch dates. They are reluctant to pump capital into new future proof technology like their global competitors are doing and are thereby potentially creating a future ‘Kodak moment’ for themselves. And no, this does not mean a moment to take a photo but the distinct possibility to become irrelevant to your consumers as newer technologies have caught up with your products and services, just as happened with Kodak when the digital camera took over from the old trusted film roll.
Tata Motors and Mahindra electric do have electric cars in the market and are trying to drive the market in the right direction, but their vehicles do not appeal to personal car buyers compared to the diesel and petrol cars available due to their very short driving range. Hyundai Kona is the only long-range EV available in the market with MG launching one in 2020.
The threat to leading Indian automakers is from the Chinese automotive companies that are beginning to enter the market like MG, Chinese automakers have the capacity to challenge the dominance of market leaders on the back of economies of scale and they already have an edge with the electric vehicle technology that fits well into the Indian government’s vision to become a key global player in the electric vehicle segment. Chinese automakers like Geely, Chery, Great Wall Motors, Changan and Beiqi Foton are exploring investments of $5 Billion USD in India.
The question is not if electric vehicles are going to be the future anymore as electric vehicle sales are growing between 60% to 80% globally and every major American, Chinese and European carmaker commits to switching a large part of their new vehicle lineup to either fully electric or plug-in hybrid.
The Indian auto industry has to acknowledge the change and invest in EVs. Not only to be future ready but also to compete with the global automakers that will come and market their electric cars in the Indian market – not in the least the Chinese manufacturers.
“This is not a trade-off. This is the single biggest business opportunity for the next couple of decades” Anand Mahindra said. “Anyone not looking at these opportunities is going to miss out on growth.”
With the serious air pollution issues that India is facing and with the competition from global carmakers that could potentially disrupt India’s largest job creator – the question needs to be asked is: Is the Indian automobile industry asleep behind the wheel?
About the Author:
Yash Chitalia is the Head of Technical Operations at BrightBlu – An EV charging solutions company. The vision of the company is to make EV charging Easy, Accessible and Affordable in India. He has a Masters in Management of Technology from New York University. Yash previously worked with EVBox the global leader in EV charging infrastructure in North America (NYC) for 4 years leading the technology team, setting up operations and bringing new products to the market. He was one of the early employees to help establish EVBox in North America. He is very passionate about electric vehicles and wants to help push the EV revolution in India.