Q. Few days ago, Union Minister of Road Transport and Highways made a strong statement about electric vehicles, do you think the industry is ready for this?
He (Nitin Gadkari) was clear in his statement that this change is coming and you must be prepare. The government wants the transition to electric mobility. The Centre is also clear that they want alternate fuels to be considered and to be used increasingly, in preference to only diesel.
And I think, this is a welcome and clear policy statement, so first I want to support what he said, and I think that the industry should welcome this. This is a new aspect, what is the direction of thinking.
The second aspect is, if this is the direction of thinking, how do we as a nation, as an industry, as stakeholders, move in a manner which is constructive, not disruptive, and results in achieving the end objective, which we all want.
The automobile industry is now gearing up in an earnest manner with strenuous efforts and a lot of investment with harnessing a lot of resources in terms of skills, manpower and technology to transition to diesel BS-VI norms.
It is not an easy norm to achieve as the time available is short. This is wrong to think that if the technology is adopted in another continent then it can be easily adopted here in India, too.
Q. You operate in both vehicle manufacturing and component space, and you understand the entire change as you will have to implement the changes at both the ends, how do you look at the complexity when we talk about both BS-VI and electric mobility in the next 12-13 years?
The BS-VI development will take minimum 5-6 years because you need special engines, which have combustion characteristics with high pressure injection. The whole development cycle is several years’ process.
It involves designing, tuning, testing; then you require that special injection system, fuel injection system, which has to be grafted on it.
You need new and complex after treatment strategies. You’ll be surprised to know that in Euro VI or BS-VI, the volume of the after treatment equipment, which is filters, or the SCR devices, is nearly the same volume as that of the engine. So, it has to be packaged in the vehicle.
The SCR must be placed close to the engine, if it is not then the exhaust gas that comes out cools by the time it reaches the SCR at the back of a vehicle, then effectiveness goes out, the amount of fuel that needs to burn the SCR will destroy the fuel economy of the vehicle.
So all this is evolved by trial and error, by experimentation, by optimization, which involves accurate, expensive, specialized equipment. So this process takes time.
Once this is done, then the robustness is in the different climatic conditions, different altitudes, different applications, and different load conditions, all this has to be established. It takes a year and a half to run a large number of vehicles. So the amount of cost, resources, and time are involved cannot be cut off.
Now coming to the alternate fuels, the alternate fuel technology is known but are they available? And if they are then implementing those fuels on a particular vehicle to adapt the engines, a similar programme has to be gone through. So, it is not something that you can switch to alternate fuel immediately.
But if the government has made up its mind to switch over to the alternate fuels, then the government and the industry should sit together and work out a plan to do this in 3 years.
Then the government will take care of making the availability of the fuels at the appropriate place and the industry will take care of making available necessary engines and vehicles, etc.
Electric vehicle is a completely different kettle of fish. EVs eliminate the engines and the gear box, instead they have electric motors. The electric motor drives the wheels.
Now whether it drives through an axle or whether it drives directly, it is a matter of design and detail. But this means that the conventional drivetrain, which is the engine, the gear box, the axle, all this is eliminated.
If this is eliminated, then you need to substitute it with electro-transmission. The key in electro-transmission is going to determine the success, the other important thing is the battery.
The battery is the storage device through which the power is available to run the motor, which will run the vehicle. The first EV was shown at an industrial fair in Germany some 125 years ago.
So, it is not a new invention. This is known. Why didn’t it materialize so far? For the simple reason that the weight of the batteries, the technology, the chemistry was available till recently and was extra-ordinarily high.
Lithium-Ion, the gen next battery, has a high power density. Let me say, in a 500g battery, the amount of energy that can be stored is much higher than in a Lead Ion battery. So this is an expensive and a sensitive device.
These batteries need cooling, they have a certain life and that life is dependent on how they are used. So, the effectiveness of electric mobility will depend not on the motor (which is a known technology), but on the controller (which is a tackle-able technology) and on integration of packaging of the vehicle.
Sodium-Ion, which is a new and more reliable technology, might become the way to go. Today the battery cost is so high that nobody can expect a common man’s car or a small vehicle to be viable economically as an EV.
The real transition will happen only when electric mobility, battery availability and battery cost will become reasonable.
We recognize that EVs are the future, but for that the development cycle has to be managed properly and collaboratively.
Q. You said it will take at least 5 years but we do not have 5 years to move to BS-VI. In such case, what alternatives are available for the Indian automotive industry?
For BS-VI, we have agreed that we will be there by 2020. And BS-VI is cooking now for more than a year.
So I think it is not going to be easy, it is going to be sleepless nights for a lot of people, not just in the automotive industry but in the component industry and the testing agencies. Suddenly 100s of vehicles will come for testing and certification.
So, the agencies will be under pressure, there will be queue for whether I should test this vehicle first or that vehicle first.
On the kind of battery to be used…
For electric vehicles, we need a policy format, and we need to work that format jointly with the government. This is a highly complex industry, you cannot over simplify it. It is easier said than done! But to do this, you need a proper systems, procedures, regulations, standards, testing facilities.
Q. Do you see a gap there? Gadkari just said interestingly we will bulldoze all the petrol/diesel car, but when we look at the actions, we do not have the roadmap yet?
He is a clear headed person. His statement reflects his long-standing views. So, there is no ambiguity in this. It is not just that Gadkari is in the industry but also the ministry of heavy industry, the petroleum ministry, the power ministry and organizations like NITI Aayog, which will also have to determine the shape of the policy for the country, for the future.
So all of them will have to work with the industry to evolve a roadmap. That is the key. If we can do that collaboratively, the results will be better. If we do it in isolation that means the industry is thinking one thing and the government another thing. Unfortunately, this happened in the past, and should not happen again.
Q. So, if we talk about the government’s support, what the industry is looking forward to make it really work in terms of adopting EVs?
The government should first constitute a dialogue with the industry for the electro mobility. Today, a lot of thinking is happening within the government.
But the level of dialogue with the industry can be intensified with the given urgency expressed by the government and I am sure if such a dialogue is held transparently, all aspects are understood, resolutions and a way forward can be found without too much delay.
Q. We do not have much of indigenous technology, so how the Indian companies are trying to grab this opportunity? Is it mostly going to be joint ventures or technical alliance? How the shape looks like?
Like I explained, there are four important elements in the EV category. One is the battery and this is a key element, but it has to be available at a reasonable price so that it can compete with a non-EV or fossil fuel vehicle like diesel/petrol/gas.
It is clear that the battery manufacture is not something that the automobile manufacturers do, battery companies, who have special knowledge of the chemistry/construction of the battery will do it.
And there are large companies of this type but they will have to scale up dramatically. If today the industry size, on a scale of 0-10, is 1, they will have to go to may be 10 in order to ensure that 100s of 1000s of vehicles can be supplied with the battery.
The second aspect is the motor and the drive. The automobile industry and the electric motor industry in India will collaborate to produce motors and it is not a rocket science, this knowledge is well established in India, this will be available in time. It does not take more than 2-3 years to develop a drive system, which is electric.
The third element is the element of control systems. To manage the electrical traction of the vehicle, which means to regulate the motor, to make sure that the speeds are right and the re-capturing of the braking power is done properly, you need an electrical system and power electrical.
These are also possible to be developed in India with Indian knowledge, software, technology, but it will take 2-3 years of experimentation to mature.
The last element is the integration of all. It is good to say that I have a good battery, a good motor, and I know the control, but how do I install it in the vehicle? What voltage will run in the current? How do you do the cabling?
What connectors are required? What is the reliability of those connectors? They should not fail. In an EV, failure of connectors and ruptures in the cabling system can lead to fire. The same is applicable to the battery. The battery must be cooled. The battery must be protected.
So, all of this has to be engineered. It is not a question of knowledge alone, it is a question of time, experimentation, evolving a proper design or trying it out or maturing that design, bringing it to production, proving it in production and being able to maintain it.
If you buy an EV or a two-wheeler or whatever it is; it will work for 5 days, and thereafter, it will start giving you trouble, you will not be happy because you expect reliability. How is reliability built-in?
It is not a function of my intention or your intention, it’s a function of the robustness of the design; that robustness having been established as a result of experimentations, trials, tests, close-loop activity of correction, testing again, improvement, testing again – this is what takes time, so we have to have a roadmap for this.
Q. Coming back to the auto component industry, do you see that there will be existential crisis for some companies with the electric vehicle coming in?
The danger is not for the auto component manufacturers, but for dealers, maintenance workshops. Today, the number of people employed in garages, which maintain engines and gear boxes, are in millions.
Few years after the introduction of electro mobility, they will become idle, the maintenance cost of an EV is expected to be 1 per cent of the maintenance cost of an ICE automobile.
The component manufacturers will have issues, those who are making drivetrain components, will have to work to adapt themselves to electro mobility components, whether all can do it, is a matter of conjecture.
I don’t believe that a full transition is possible. So, it has to managed in as painless manner as possible.
The automobile manufacturers will work to integrate electro mobility devices in current or new vehicle platforms. Every few years the automobile manufacturers bring-in a new platform, so the next platforms will cater to electro mobility. And this will happen.
Q. With the current market condition, one player has about 50 per cent in this big shift coming up, do you see any ups and downs in the market shares, especially in the passenger vehicle segment?
It may happen, and it depends on the agility, the technical competence, the adaptability, not just for the automobile manufacturer but the established supply chain, the engineering infrastructure, to be able to succeed in this transition. So, some will succeed better than others.
And this is what the real life is all about. You cannot say I want to maintain the same proportion forever, competition is important, such disruptive changes give a new colour to the competition.
Let the competent organization win, and I think the automobile industry is open to it.
They are not saying protect us, save us, we are dying, no, they are saying we are ready to innovate, we are ready to improve, we are ready to modernize, we want to tackle that, we want to use that opportunity to become global players, this is a crisis, which we can convert into an opportunity.
To do that, let us work together, create a path for the transformation.
Q. How do you look at the job market in the automobile industry? What will be the impact? You just talked about dealership and workshops, overall job scenario, how do you look at?
Technology is progressing rapidly, the new world is emerging, and the jobs will be different. Not necessarily there will be a reduction in jobs.
Electro mobility can have a similar impact, the person who is repairing a car can become a software person, the person who is selling a car can go into selling electricity; so the nature of the job might change, the location of the job might change, the person who is doing the job might be the next generation person.
But are we creating enough jobs? That is the challenge. So we have to work towards that aim.