By virtue of working for an EV firm, I have found that talking about the EV industry and its fortunes is a near-certainty of a candidate for a good conversation starter. This blog is an attempt to compile some myths I hear again and again, and to explain my take on them. The bulk of my thinking has happened with Thiru Srinivasan as we often discuss these themes during the course of our meetings with people outside of Ather. Also, I am enrolled in a course on Electric Cars offered by Delft University through edX. Please note, I primarily talk about the Indian EV market.
EVs are going to invade our worlds very soon/ very late
Over the course of the next decade (2021~2030), we see a staged adoption of EVs in different categories of mobility (2-wheelers, 3-wheelers,4-wheelers- passenger and commercial). The staging will be driven by three main factors; the range that batteries provide, the time taken to charge and the availability of charging infrastructure. If significant adoption has to take place, firm answers have to be found for the above factors in each of these categories, notwithstanding economic viability. In the table below, I mention where we are currently in terms of progress of these factors and what would enable widespread adoption (say at least 50% of all vehicles in this category ??? ). I talk about vehicles that are either already launched or are very close to being launched; at prototype and early development stages, vehicle makers offer all sorts of glorified claims 😛
|2- Wheelers||3-Wheelers||4-Wheelers: Passenger||4-Wheelers: Commercial|
|Range||50~100 kms ==> 150 kms||50~100 kms==> 150 kms||100~500 kms ==> almost all above 300 kms range (Link)||100~500 kms ==> almost all in 500 kms range|
|Charging Time (||1~2 hours==>5~15 minutes||6~8 hours==>30 minutes==> 1 hour||5~10 hours==> Less than 1 hour||5~10 hours==> less than 30 min|
|Availability of Charging Infrastructure||A few in every city/town==> not more than 4 kms away from any given location||A few in every city/town==> not more than 10 kms away from any given location||A few in every city/town==> not more than 4 kms away from any given location||A few in every city/town==> a full fledged network available with designated and well maintained charging stations|
Based on the above technical requirements, a working of economics of scale and willingness by both industry and consumers, I foresee widespread adoption of 2-wheelers and 3-wheelers by 2025 and 4-wheelers by 2028~2030.
People buy EVs because they are clean.
The enthusiasm to buy and run a clean vehicle is what I refer to as a “By the way, this also” feature. Customers want to have a vehicle which matches the performance of any Internal Combustion Engine (ICE) vehicle and as a top-up to this, feel good for the sake of the environment. This effect is more pronounced in the Indian two wheeler market because of the way it has evolved.
India has a very evolved two wheeler market (the largest in the world) and its incumbent players are among the largest in the world (Hero sells the largest number of vehicles in the world). This means that customers are accustomed to the experience of good quality vehicles in terms of mileage, performance (torque, acceleration, top speed, etc) and reliability. Consequently, an electric vehicle sold in India today needs to at least match the performance of an incumbent ICE vehicle like the Honda Activa.
This is a marked contrast to the expectation in China, the next big two wheeler market which is gradually converting from bicycles. We see a plethora of low range, low performance electric vehicles in China as they are really competing (and definitely winning !) against a bicycle as a substitute product.
This phenomenon has been duly noted and keyed into India’s Electric vehicle policy framing. In order to ensure that the industry is not flooded by low range, low performance electric vehicles made in China and only assembled in India, the FAME-II regulations noticeably offer incentives based on performance.
EVs are an absolutely clean means of mobility
I would submit that EVs are not a completely clean source of fuel, as long as the method of generation of electricity is through an unclean way, like burning coal, However, even in the case of coal based electricity generation, Electric vehicles are at least two times cleaner than ICE vehicles. Enter a ratio called the Well to Wheel efficiency.
The Well to Wheel efficiency multiples the efficiency with which your vehicle’s engine turns the fuel into movement (tank to wheel efficiency) with the amount of effort it takes to get the fuel into the engine. Today, EV well to wheel efficiencies hover at around 35% when compared to petrol engines at 15%. As we switch to cleaner and more efficient sources of electricity (smart grids which use a combination of solar and wind), this is only bound to get better whereas the possibility for improvement in ICE vehicles is very marginal.
The other argument from advocates in favor of electric vehicles is the fact that with these vehicles, tailpipe emissions are non existent. From a theoretical perspective, it is easier and more cost effective to control emissions from a single large source (like a chimney of a coal factory) than from a million petrol, diesel (and often kerosene !) burning vehicle. Additionally, whereas the emission from these vehicles is often in densely populated areas (both urban and rural), coal factories can be set up far away from human habitation, thus reducing the effect on humans of an equivalent amount of emission.
The rise of EVs is currently a major factor which is causing auto slowdowns.
While there is indeed a sense of change in course in the auto sector, the major attributes of the slowdown are twofold in my opinion; a rapidly diminishing preference for ownership when it comes to assets like vehicles and uncertainty over the economy leading to deferment of investment plans.
In fact, a bigger technology discussion going on right now in the auto industry is the impending introduction of BS-VI emission norms, slated to come into effect in April 2020 and work around them. There is a major spend on R&D to facilitate this and many firms are delaying their introduction of projects on electric vehicles to focus on the BS-VI changeover.
Moreover, the Electric Vehicle industry in India today does not comprise even 1% of the total percentage of vehicles and even with the mammoth focus on this transformation, this situation is bound to change only 5 years hence.
In an upcoming blog, I will attempt to provide a more elaborated version of what ails the Indian auto industry and I why feel it is bound to change very soon and for the better.