Despite the Government of India’s push and heavy discounts offered by electric vehicle makers in the country, EV adoption here is not what was originally envisaged. Vivek Jakhmola, Director at MT Autocraft, discusses the reasons with EFY’s Mukul Yudhveer Singh!
Q. What are the low-hanging fruits in terms of components that can be developed today for the electric vehicle industry?
A. Currently, the most significant opportunities in the Indian EV industry lie in developing deep tech components such as motors and controllers. These components are fundamental to electric vehicles, and there is a significant demand for reliable and efficient versions of them. Additionally, automatic transmissions, particularly those adapted for electric vehicles, also present substantial opportunities. Given the challenges in availability and the dependency on foreign supply chains, there is significant potential for growth and innovation in these areas.
Q. What is the main reason for the slow adoption of electric vehicles (EVs) in rural areas, known as ‘Bharat,’ compared to urban areas, or ‘India’?
A. The slow adoption of EVs in Bharat is primarily due to several challenges, including the terrain’s gradient, which requires more powerful motors, and the lack of serviceability and charging infrastructure. In regions with steep gradients, such as Jammu, Kashmir, Uttarakhand, and Himachal, the adoption of EVs is almost negligible. Additionally, there is confusion regarding charging standards, with different companies using incompatible chargers, further hindering EV adoption in rural areas.
Q. Is it accurate to say that the challenge is not the lack of motors and controllers, but the lack of modern controllers tailored for Indian conditions?
A. Yes, that is correct. India has traditionally excelled in manufacturing induction motors, particularly for industrial applications. However, the electric vehicle (EV) sector requires motors that can operate at varying RPMs, which is not the case with the fixed RPM motors to which we are accustomed. The key challenge lies in developing controllers that can efficiently manage these motors under diverse Indian road conditions, such as adjusting torque for different scenarios, like climbing steep speed breakers. While startups and young engineers are making significant progress in this direction, there’s still a gap in the ecosystem that needs to be addressed to develop controllers and motors that meet the specific demands of Indian EVs.
Q. Would startups or will legacy companies provide the solutions for the industry’s challenges?
A. I hope startups will lead the way, as they are dedicated and innovative. However, my experience suggests that legacy companies will be crucial for scalability. Startups excel in technology development, while established players have the financial strength and supply chain control for large-scale manufacturing. I foresee collaborations between startups and legacy companies, benefiting from each other’s strengths.
Q. Is there an opportunity to expand solutions for motors and controllers beyond India?
A. Yes, there is a significant opportunity for Indian solutions in motors and controllers to be adopted in other countries. Nations like Indonesia and South African countries, which are behind in electric vehicle implementation, are looking to adopt such technologies. Indian companies like Bajaj, Hero, and Tata Motors have already established a positive reputation for Indian vehicles abroad. This opens up opportunities for exporting not only vehicles but also components, with better margins and reliable payment cycles.
Q. With the EV market progressing by the minute, do we have enough time to develop EV technology in India?
A. Developing homegrown EV technology is a time-consuming process, but it is necessary for long-term success. While it is common for businesses to import and rebrand established technologies for quicker market entry, companies like Mahindra, Tata, Bajaj, and TVS are examples of Indian companies developing their technologies. However, to meet immediate market demands, partnerships with foreign companies can be a practical short-term solution.
Q. JVs between Indian companies or between Indian and foreign ones, what is the way forward?
A. Yes, there is a need for JVs between Indian companies to develop EV technology tailored to Indian conditions. Technology transfer from foreign countries often results in higher costs and less effective solutions. Indian companies have a better understanding of local requirements, such as the need for vehicles to navigate specific obstacles like speed breakers. However, complete technology transfer, especially in software, is rare, as foreign companies tend to retain control over their intellectual property. Indian companies developing their technology have more control over the code and can better adapt to local needs.
Q. What is the average value addition by companies manufacturing electric vehicles (EVs) in India?
A. In India, there are two categories of EV manufacturers. The first category includes those that have significantly Indianised their products, such as by locally assembling motors and controllers. These companies achieve around 60 to 65 percent localisation, especially for high-speed vehicles produced by large legacy players. The second category comprises smaller companies operating in limited geographies, which have a much lower localisation rate of around 10 percent. These companies often import 90 percent of their components in kits and merely assemble them in India. Their vehicles are considered “use and throw,” with a lifespan that is expected to be short.
Q. Is India’s software prowess contradicted by its slow adoption of electric vehicle (EV) technology?
A. No, it is not a contradiction. India is known for its software capabilities, but developing mature EV technology takes time. Writing basic code for motor control is straightforward, but refining it for various real-world scenarios and user experiences requires extensive field data and continuous improvement. India’s diverse conditions, such as unpredictable road obstacles, present unique challenges that take time to address in software development.
Q. Is there collaboration between the industry and academia, particularly in the electric vehicle sector?
A. Yes, there is significant collaboration between the industry and academia in the electric vehicle sector. Many startups in this field are associated with educational institutions like IITs. The government is also providing substantial support through grants and seed funding for startups incubated in these institutions. Educational institutes offer access to top-notch facilities and testing equipment, crucial for startups in their initial stages. This support extends beyond electric vehicles to other areas like drone and space technologies. The level of collaboration and support available now is much greater than in the past, providing a strong foundation for innovation and growth in the industry.
Q. Is the lack of clarity in long-term policy and concerns about product quality hindering EV adoption in India?
A. The EV ecosystem in India is progressing, albeit slower than desired. A key factor affecting adoption is the need for more stability and clarity in long-term policies, such as the uncertainty surrounding the FAME subsidy. This uncertainty can lead to hesitancy in product development and submission for regulatory approval. Additionally, there is a cost-sensitive mindset among OEMs, leading to a preference for imports over slightly more expensive Indian solutions, despite the understanding that local manufacturing is beneficial. Clearer policies with a five-year outlook could help establish supply chains and create a more competitive market.
Q. How important is FAME for electric vehicle makers to sustain their efforts in India?
A. Yes, FAME is crucial. Without it, establishing a proper supply chain in India will be challenging. Ideally, the subsidy should decrease over time and incentivise localisation. If a vehicle is 100% localised, it should receive a 20% extra subsidy. Although administratively complex, it is manageable with technology. This approach encourages manufacturers to reduce costs and increase localisation, essential for the automobile sector’s gradual evolution. While we may not match China’s parity in the next few years, reducing imports and improving technology, especially in software and algorithms, will significantly advance our position.
