There is no doubt about the JBM group being a significant player in the auto components sector with a turnover of Rs 10,000 crore. Like most in the auto sector, the group is also interested in evolving areas like green energy and transportation through electric vehicles (EV). The EV business of the group runs under the name JBM-Solaris (a joint venture). Nishant Arya, Executive Director of the group, shares his thoughts with The Free Press Journal’s Pankaj Joshi on the EV space and why it is set to grow at a rapid pace.
Edited excerpts:
It is estimated that EV could see the kind of strong growth that solar power witnessed in the last five years. What is the reason for this optimism?
We really believe that EV could see a similar growth pattern as solar power in India or even bigger. Solar is a source of green energy, where there are other options like bio-fuels or wind. EV today represents a breakthrough in transportation, which represents a significant part of the GDP and also is a status symbol. Both factors signify growth.
Automobile technology today can be broken into well to tank (fuel technology) and tank to wheel (car technology). EV represents the latter. As the charging concept get acceptance, the efficiency levels will only rise, because we will need the well-to-tank technology to be greener too. Today the regulatory environment is also getting friendlier. Recently the sale of electricity for EVs has been taken out of the purview of the energy market constraints. EV manufacturing also dovetails into the Make-in-India and Skill India initiatives.
For the user, apart from environmental factors, important considerations would be safety, comfort and most of all, the operating cost. Now an EV has 18 moving parts against 1,800 in a conventional vehicle, so you can gauge the maintenance cost difference. Other benefits would become apparent over the life cycle, but till then some kind of regulatory mandate is needed to push the concept, as has been seen in many countries.
What kind of regulatory moves do you anticipate and how will industry players need to respond?
For instance in Delhi, there was a decision taken 20 years ago that all public transport vehicles and commercial vehicles would shift to CNG. We will have similar mandated moves towards EV. JBM-Solaris today is in talks with state transport bodies, municipalities, even smart cities for catering to their requirements through EV solutions.
India sees around 70,000 new buses each year where 50 per cent ply intra-city and 50 per cent between cities. I believe that the intra-city segment should move entirely to EV over the next five years and inter-city would follow later.
Regarding the industry players, they will need to understand that this disruption is both a challenge and an opportunity. The challenges are the changes needed in product portfolio, the periodic evaluation and absorption of technology and lastly the workforce requirement modifications. The evolution coming up is massive. Today EV is a choice and tomorrow it will be a need. Companies must understand that huge demand is on the way and must get ready to service it.
Is there a threat that the equipment/ component market would be captured by overseas players?
There have been reports that companies are resorting to aggressive bidding in order to capture the initial orders and wipe out the competitors. Recent tenders have also shown that products from neighbouring countries are being preferred because of low price. Such intense market grabbing can prove to be a deterrent to the whole ecosystem, also going against government’s Make-in-India initiative by creating more employment opportunities for these neighbouring countries. One should look at the reasons and sustainability for these low prices to ensure that the EV market matures in a desired fashion with room for all players. That said, the pattern of costs coming down drastically on rising volumes, which was seen in the solar power industry, will play out here again and will benefit the industry and consumers.Independent players will face more difficulties but some level of technology independence is necessary, at least in the design department.
This independence is needed if indigenisation has to be successful and local players are to capture any significant market share. A transition period is coming up, which may be unpleasant but is unavoidable if we are to contribute to society.
Do you think ecosystem is formed?
India is promisingly advancing towards graduating to a non-fossil fuel-based public transportation ecosystem. This is in line with the vision that we are aiming for innovation in the EV space. Our first offering is our electric bus, named Eco-Life. This vehicle has been developed in partnership with renowned European bus manufacturer Solaris Bus & Coach, which has a track record in transportation technology across 30 nations.
When we talk of EV, we talk of an ecosystem including battery technology, vehicle technology, charging technology as well as the operating patterns. We aim to be a one-stop solution provider in the EV segment by providing a complete ecosystem solution for e-mobility i.e. electric bus, key aggregates like battery, charging infrastructure and a well-structured operating pattern. The EV business shall contribute substantially to group revenues in the next three-four years.
We have planned an investment of Rs 300 crore in the EV business over the next three years. This includes beyond development and manufacturing of EVs, areas like engineering, design & development, supply chain development for the electric mobility project.
We are offering two charging solutions for Eco-Life. The first one is the regular plug-in charging system wherein energy can be supplied through external chargers. The other is an over-head pantograph for opportunity charging. India reportedly has only 350 charging points at present compared to 2,15,000 installed in China at the end of 2016, as per a recent report by Bloomberg New Energy Finance. Till the current regulations on sale of power are modified, charging stations cannot be currently built in petrol pumps or parking lots. However, as discussed, changes are underway.
Today, for the common man, an electric vehicle is more expensive than any vehicle with an internal combustion engine, but that is because he looks at the front-end investment only. Our analysis of the life-cycle cost benefits suggests that both will be even at five-six years and, from thereon, all benefits accrue to the vehicle buyer, both in operation and maintenance costs. This means EV is an optimum long-term usage solution and institutional customers will be the first to appreciate this.
