This article was compiled from India Business Magazine Today Special features published in the latest issue. The article focuses on the Indian electric vehicle industry from the perspective of local media. Speaking of the Indian government’s “stubbornly different” stimulus policy, it talks about the industries that are hesitant between “hybrid” and “electric”. Of course, the text does not forget to talk about China Technology exists. If you are interested in the Indian electric vehicle industry, be sure to finish reading it; if you are not interested, then close it quickly, because this article is a bit vertical and a bit specialized, and it is a bit tired and long.
The future of the Indian automotive industry belongs to electric vehicles.
It is not difficult to make this judgment. You only need to look at the first month in the new decade of the 21st century. As of now, six or seven new electric vehicles have been unveiled in India, which is more than the whole of 2019.
Among them, Bajaj Chetak (Translator’s Note: This refers to electric motorcycles produced by Bajaj Auto) , TVS iQube (refers to an electric motorcycle produced by TVS Motor Company) , and the emergence of Mercedes EQC and other products indicate that established car manufacturers have entered this field. Tata’s electric SUV Tata Nexon EV and MG’s ZS EV are trying to make a price / performance ratio. In recent years, Ather Energy, which is known as the “two-wheeled Tesla in India”, has taken a different approach. Their new The overall performance of the 450X electric motorcycle released was quite impressive, and the company even simply called itIt is a “super electric motorcycle”.
But it’s just the beginning. At this year’s Auto Expo, electric vehicles have become the protagonists; it is foreseeable that in the rest of this year, auto manufacturers will also put many new brands and models on the stage.
Of course, the rapid development of electric vehicle companies in the past three years cannot be separated from strong government support. The reason why the government is willing to support is not difficult to understand. In India, electric vehicles have been viewed as a one-stop solution to many difficult problems. Among them, the two most direct problems are also the most immediate effect of electric vehicles as “antidote” is to limit air pollution and reduce the import of crude oil. You know, crude oil imports alone account for at least a quarter of India’s total imports. India’s crude oil consumption accounts for 29.4% of the world’s total, second only to China and the United States. India is also the country with the third largest carbon dioxide emissions in the world, reaching 2 billion tons. This number is also only smaller than that of China and the United States. In the Indian capital Delhi, the air pollution index caused by particulate matter has exceeded the World Health Organization’s limit by 7-12 times.
There is no doubt that electric vehicles can solve the two major problems mentioned above. But the problem now is that before it becomes the mainstream of automobile consumption, there are still a lot of problems to be solved.
First is the battery problem.
Although the price of lithium-ion batteries has been lowering in recent years, it is still too expensive at the current price, which will directly “advance” many potential car owners who are interested in early adopters. Taking a step back, even if they can afford it, charging will be a big problem at that time.
Of course, there are many optimists, such as Mahindra Group (Translator’s Note: Mahindra and Mahindra, also known as M & M company, is India’s largest car One of the manufacturers) General Manager Pawan Goenka:
“I have said the phrase” the era of electric vehicles is coming “for ten years. But now, I think it is time to remove the word” coming soon “. At least in terms of shared transportation, the commercialization of electric vehicles The timing is ripe. “
“Of course, as far as private cars are concerned, we also need a larger capacity battery, which has to reach at least 400 kilometers, so customers can drive it from Delhi to Chandigarh or Jaipur. And to In order to achieve this goal, it is indeed necessary to invest a lot of money, and car companies still have a long way to go. In order to turn electric vehicles into mainstream transportation that meets personal transportation needs, car prices must be reduced by at least 8 ~ 10% “Goenka added.
Although the amplitude is slowSlow, but fortunately, the price is indeed dropping little by little. When Hyundai launched the Kona EV last year, the price of Rs 2.5 million was considered an important breakthrough; but less than half a year ago, that is, in January of this year, the Chinese MG ZS SUV reached Rs 2 million; and a week ago, The Nexon EV launched by Tata Motors (that is, Tata Motors) has pushed the price down to Rs 1.5 million.
“With the implementation of the BS-VI regulations, (Translator’s Note: B is the abbreviation of Indian fuel vehicle manufacturer Bharat, and BS is Bharat The Stage is a series of cars produced by the company. The Supreme Court of India ruled at the end of last year that starting from April 1, 2020, Bharat Stage IV fuel vehicles, referred to as BS-IV or BS 4 vehicles, will be banned from roads. Only BS-VI, that is, BS 6 vehicles or fuel vehicles that meet the BS-VI emission standards, can be on the road. Therefore, the BS-VI in the text refers to this regulation, which is aimed at improving the environmental protection standards of fuel vehicles) < / span>, the price of fuel vehicles will inevitably rise in the short term; meanwhile, actions including the substantial construction of charging infrastructure to promote the development of electric vehicles will also be rolled out quickly. It is estimated that 2022 will become an important turning point. The number should have reached the market demand. At the same time, for consumers, the new energy vehicle market at that time will also be more prosperous, and there will be more models for people to buy. “Tata Motors’ electric vehicle business and company strategy leader Shailesh Chandra said.
“Electric cars are powerful and fun to drive. At present, the mileage of Nexon EV has reached 311 kilometers; the minimum mileage of similar models on the market has also exceeded 250 kilometers. New products released in the next few months will have endurance Capabilities will definitely continue to improve, which will be more attractive to private car users. It is expected that electric vehicles will account for 10% to 12% of new car sales by that time.
Frankly, I think Chandra’s statement is a bit exaggerated. According to data released by the government, about 3 million new cars were sold in the country last year, but only more than 1,000 of them were electric cars.
A stimulus policy that goes the wrong way
If you choose a word to evaluate the Indian government’s efforts in the development of electric vehicles in the past few years, it must be “the opposite of the situation.”
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The second edition of the “Faster Adoption and Manufacturing of Electric and Hybrid Scheme (FAME II for short)” span class = “text-remarks” label = “Remarks”> (Faster Adoption and Manufacturing of Electric and Hybrid Scheme, referred to as FAME II ) The original intention was to support the new energy vehicle industry, but from the actual effect, it has become a stumbling block that hinders the development of the industry.
Compared with the first promotion policy (FAME I) , the FAME II plan is obviously more ambitious: the investment amount of FAME I For Rs 100 crore, FAME II will invest Rs 1 crore within 2020-2022, which is ten times the plan of the first edition. Correspondingly, FAME II’s output requirements have been further increased: within 2021-2022, 1 million two-wheeled electric vehicles, 500,000 three-wheeled electric vehicles, 55,000 four-wheel-drive electric vehicles, and 7,000 electric buses will be produced nationwide. .
This is not the end. The plan also has cost-effective requirements. For example, as an electric motorcycle manufacturer, if each car wants to get a subsidy of 20,000 rupees, the minimum endurance of its products must reach 80 kilometers. The fastest speed cannot be lower than 40 km / h. In FAME I’s plan, even low-speed two-wheeled electric vehicles can get a subsidy of Rs 17,000 as long as the top speed can reach 25 km / h.
Such harsh regulations have caused widespread market disruption. According to the report released by the Electric Vehicle Manufacturers Association (SMEV) , after the implementation, April to December 2019, sales of two-wheeled electric vehicles Only 3,000 units, compared with 48671 when the FAME I plan was implemented in the same period in 2018. In other words, within one year, electric vehicle sales plummeted by 93.84%.
“It is true that FAME I is not perfect. But under FAME II, no matter what the internal logic of the New Deal is or whether these requirements are reasonable, it is an undeniable fact that the development of the industry has actually stagnated or even reversed. To this day, we have not fully recovered from last year’s losses, “said Naveen Munjal, general manager of Hero Electric, India’s largest two-wheeled electric vehicle manufacturer.
He further added, “The New Deal has caused a violent industryConcussion should now be adjusted. If the electric vehicle industry wants to recover, it must start from scratch. We need to focus on the low end of the pyramid and focus on low-speed vehicles, because this is what the general public really needs now; only then can India’s electric vehicle industry get on the right track. “
In addition, because FAME II’s original intention was to promote electric vehicles in the shared economy model, it did not provide any incentives for private use of electric vehicles, which indirectly led to the current private car market share of only 20% in the new car market.
For this reality, Chandra, general manager of Tata Motors, has criticized, “We sincerely hope that FAME II can take care of private cars. After all, with subsidies, users can spend less on car purchases. Moreover, personal needs It is just needed. If electric vehicles can only be used as part of buses or shared transportation, then in the long run, it will definitely not be conducive to the development of the electric vehicle industry. “
In fact, it is not just private cars. FAME II is also cutting subsidies in terms of government-focused electric buses. In FAME I, subsidies for low-level electric buses are rated at Rs 8.5 million to Rs 10 million, depending on the regional situation. FAME II has reduced this number to Rs 3.5-5.5 million. The direct consequence of this is that in the past six months, the public transport authorities in various states have been continuously increasing their bid prices when purchasing. The lowest bid for a 12-meter bus in the Dehradun Smart City is Rs 90.90 per kilometer. The price signed by the Jaipur Urban Transport Service Centre has also reached Rs 85.95 per km.
These two numbers are much higher than the bids in the FAME I pilot phase. At that time Goldstone-BYD (Goldstone-BYD, the company is BYD’s partner in India) is 9 meters long, equipped with Bangalore, equipped with Air-conditioned buses are priced at Rs 29.28 / km and similar models in Hyderabad are at Rs 36 / km. Although Jaipur’s bid for the last Tata car was slightly higher, the price of Rs 70 / km is still much lower than the current bid price.
Nishsant Arya, executive director of JBM Auto, also wants to talk about this phenomenon:
“Under the FAME II system, the subsidy has been reduced from 10 million rupees to 5 million rupees. The operation of FAME I has been very good in the past three years, and the new policy has suddenly changed. This has made the bidding market a little hectic and many bids look It’s ridiculous to go up. In the bidding for low-rise buses in Delhi, the bid was for compressed natural gas as energy.The price of the bus is Rs 84 per kilometer. However, if this market situation is combined with government subsidies, the price of electric buses can reach parity with gasoline and natural gas vehicles. This is clearly contrary to the original intention of FAME II. “
In addition to the decrease in subsidy quotas, another more worrying question is how long can a government with a tight budget like India continue to subsidize electric cars in the future?
Government policymakers have responded with China as a template whenever anyone asks this question. But it must be pointed out that even in China, where electric car sales account for half of the world, the recent situation is not very satisfactory. The government cut the subsidy of up to 50,000 yuan per electric vehicle (approximately $ 7165) in half in June 2019. The effect is immediate: in July, sales of electric cars in China fell for the first time, a range of 4.7%; in August it fell by 16%, in September it fell by 27%, in October it fell by 45.6%, in November it was 43.7 %, Although rebounded in December, sales still fell by 22%.
“The most basic driving force for demand for electric cars should come from consumers. In India, this demand has not yet appeared; while China has demand, the artificial trace is more obvious. Once the government reduces subsidies, sales will decline. “Kenichi Ayukawa, general manager and CEO of Maruti Suzuki, India’s largest automaker, said.
Ayukawa believes that the pace of technological development is also an important consideration for the electric vehicle industry. “The maturity of technology takes time, and it takes time to improve and unify the infrastructure. This takes about 5 to 10 years. Although battery technology has been developing, the restrictions on raw materials are still obvious. At the same time, the safety of batteries cannot be ignored. “
In addition to subsidy policies, some state-owned enterprises in India have also taken actions to promote the development of electric vehicles. For example, the energy efficiency service company (EESL) has attempted to replace some of the official vehicles of government agencies with electric vehicles.
However, the plan has just begun, and many officials have complained that electric vehicles generally have short mileage and limited choice of brands. But it took a long time for the unresponsive EESL to realize that to satisfy these “customers”, the first thing to do is to invest in charging infrastructure.
Today, the first tender for a total of 10,000 vehicles has been completed. Tata Motors and Ma Hengda Group respectivelyOrdered with their first-generation eTigor and e-Verito models. However, so far, EESL has purchased less than 2,000 electric vehicles. Obviously, this ambitious plan has failed, and the failure itself is hitting market sentiment.
“The main reason this plan fails is that the models are not suitable for the target users. The winning models are early models and have some problems. In fact, they may be more suitable for shared travel rather than becoming senior government officials. Goenka, general manager of Ma Hengda Group, said, “However, this plan still has a certain positive effect. Many audiences are beginning to understand that electric vehicles are precisely due to the EESL plan.”
Many government officials have impassionedly stated that they hope that India can achieve the electrification of all-industry cars by 2030. But now it seems that this goal is no longer possible.
“In India, the belief that there is no doubt is always seriously out of sync with the progress of the real situation. We always feel that the ‘turning point is coming’, but the actual situation is still far away. In terms of the promotion of electric vehicles, the government’s performance It is indeed positive enough, but the industry has not made a strong response. “Said Ravi Bhtia, president and chairman of JATO Dynamics, an automotive industry research company.” From a global perspective, the technology development of electric vehicles is still slow-of course, special Sla is an exception. They have been trying to make new attempts in technology-today we are bounded by 10 years, but maybe in the next decade, we may still realize with frustration that the turning point of the industry has not yet reached . “
“Hybrid” regression?
For consumers, the biggest obstacle affecting their purchase of electric vehicles is battery life. When there are only a few hundred charging stations in the country but tens of thousands of charging facilities are actually needed, many people will naturally look elsewhere. Now, some electric vehicle manufacturers have begun to re-plan, they are preparing to use hybrid vehicles as an interim solution for electric vehicles.
Maruti Suzuki had previously made a high-profile announcement that they would release the first all-electric vehicle in 2021, but recently they have retracted this commitment on the grounds that “India lacks sufficient infrastructure preparation and industry incentives.” .
“It’s too dangerous to focus on just one technology,” Maruti Suzuki CEO Ayukawa bluntly said, “electric, hybrid, compressed natural gas, bioenergy … these energy sources.We all have research on technology. As for which new energy vehicle we will put into the market in the end, it depends on the cost and convenience that consumers feel. “
“Not just companies, the government should also take action. For example, give tax incentives to hybrid cars. If you replace fuel cars with hybrid cars, it will reduce emissions by 30 to 40%, which will not only help the environment but also fuel It is more economical and efficient to use, “Ayukawa added.
In fact, the Indian government has indeed changed its tone.
The government has long opposed the introduction of hybrid cars, but in September last year, it was sponsored by the Indian Automobile Manufacturers Association (SIAM) At the annual automobile manufacturer conference, Minister of Road and Highway Transport Nitin Gadkari stated that he agreed to give tax incentives to hybrid cars:
“Previously, we have reduced the consumption tax on electric cars, and now I am trying to help hybrid cars enjoy the same treatment. I have already contacted the Ministry of Finance and manufacturers should take positive action. Only then , It ’s only possible for hybrids to join the ‘tax-cut club’. “
That being said, the industry ’s attitude towards hybrid cars has not yet reached a consensus. Japanese manufacturers such as Suzuki, Toyota, and Honda prefer hybrids; Indian companies such as Tata and Ma Hengda prefer to take the lead in the field of electric vehicles; Hyundai and many European car manufacturers are on the sidelines. Since these companies have global production lines in both “hybrid” and “electric”, they can make choices based on market changes.
“It is true that with the introduction of stricter CAFÉ standards (Company Average Fuel Economy Standards), hybrid vehicles will indeed help the environment. But hybrid vehicles and electric vehicles are still not comparable. Hybrid It is a transitional state towards electric. So even if we also have the relevant technology, our focus is still on electric vehicles. “Chandra of Tata Motors believes that electric vehicles are the ultimate solution to climate change.
It is worth mentioning that the battle for technology around the future transportation and mobility industries may also include geopolitical factors.
At present, China has become a leader in electric vehicle technology, and they also have an advantage in the battery supply chain. Based on this, many people are beginning to worry that when the era of electric vehicles is fully reached, the world will surrender to China. By then, India, the world’s fourth largest car market, may also be heavily affected by it. Today’s Indian electric vehicle revolution is, in terms of connotation, actually turning oil imports into West Asia into aChina, Latin America and Africa import lithium, cobalt, graphite, nickel.
“Everywhere in the world today, there is a confrontation between China and the United States. They are fighting in various fields, they are fighting for world leadership, and they are eager to stop relying on oil.” Said Global Chairman Dieter Becker.
In terms of energy vehicles, the three largest markets in the world have made their statements. The answer given by China is electricity, the US answer is gasoline, and Japan is hybrid and fuel cell vehicles. As India’s fourth largest market today and tomorrow’s third largest market, India should make up its mind early.