The auto Expo witnessed divergent positions taken by car manufacturers on electric cars. While some maintained that customers are still not ready for electric cars as acquisition cost remains high and a charging infrastructure is not there, Shailesh Chandra, president, electric mobility business & corporate strategy at Tata Motors, tells The Indian Express electric vehicle future is imminent and he would go with an aggressive portfolio of products. Stating the only thing holding back is charging infrastructure, he said if that happens in two years, people will start buying. Edited excerpts:
There is a broader feeling that tempo on electric cars is not picking up. How do you see it?
If you want to come to the general conclusion, you will see that electric seems to be the theme, apart from the connected theme and safety theme, as emissions and safety are the two driving reasons for disruptions in the auto sector. I would say theme is more electric but also remember that two years back, the government came with Vision 2030 and every OEM wanted to give the message that they are with the government.
Two years down the line, you have lesser OEMs participating and one of the factors is downturn. There have been exits from the market. All those people who have shown electric vehicles would want to show that they are aligned with the government’s plan. Some OEMs would say that we want to be early movers in this major transition, which may not happen tomorrow, but will happen eventually and we would like to be seen as doing it.
While you sound very optimistic, there are some in the industry who are apprehensive and say that there is no demand for EVs?
I am seeing the glass half full and somebody is seeing it as half empty. It is strategic posture. I think it is imminent as electric vehicle by nature is a much better promise than the internal combustion engine car. If you have an EV product that comes at Rs 1 lakh incremental price over its petrol/diesel equivalent, where in four years you can save Rs 2 lakh in running cost and it gives a superior performance and much better warranty terms; what else would you expect in an SUV.
Today, what is holding them back is the absence of charging stations. Once that happens, there will be a great degree of comfort and people will start buying that. I think it is a very plausible scenario. So, we want to go with an aggressive portfolio of products in the personal segment. This would ensure that increasingly we get more and more penetration of electric vehicles.
Do you think we will have a reliable charging infrastructure over the next two years?
I think it should come in the next two years. Tata Power has committed to putting up 650 charging points and they are committed with us. I think that because of the FAME subsidy available over the next two years on chargers it should come up. There are states that are also promoting for a certain number of chargers that will be subsided on top of what the Centre is offering.
So, in two years’ time, I would imagine that there will be a critical mass of charging stations and also there will be promising products like Nexon EV that will come from other OEMs, too.
How much of the EESL market has helped electrification?
EESL was a big help to anchor our effort in the electrification to start with. We all know it has not done 10,000 vehicles and EESL MD had also mentioned that they have done a certain quantity and not more than that. We had never planned our electrification journey based on government orders, but it was more symbolic. Government use will always be symbolic and not a business case for any OEM. It has to come from fleet and the personal segment and these two segments are our key focus.
But, yes, we are pretty happy with EESL as it helped us build and anchor the effort of electrification in the country. Real electrification started with that tender only. The whole ecosystem players started talking and engaging basis that tender. So, although volume-wise one could say it has not worked, but it has triggered.
How do you see the fleet and personal segment growing?
For a fleet segment, the use case requires a running of 150 km-170 km a day and so you need to make a car that delivers that, and we came with a very specific car in October 2019, which did a 213-km range. It has been a big success in segments where electric vehicle has been adopted in fleet. If they need 200 km, I would give that and not 500-km range because that would disturb their cost of ownership. So, you neither can go overboard on the range nor can go under as that will hamper their revenue opportunity. As of now, our plan on the fleet segment is working and we hope that we can continue our dominant position.
The personal segment is a bigger bet for us. As it holds bigger promise, our aspiration will be more on that side because this is the segment where there will be more transformation. Fleet is only 10-15 per cent of the industry and so it will hit a limit very soon. Therefore, we need to bring more choices for the personal segment. In the past 5-6 months, few choices have come, some of them are CKD options that are very high price point. I would say the first real product is Nexon in the personal segment because people can start thinking of electric. If we are able to offer an EV where its price is not significantly higher in comparison to a petrol or diesel equivalent, then all you need is some charging infrastructure.