Q. How do you see the future of mobility panning out in India, transforming from the current mode of transportation to EVs, drones, hyperloops, AirPods, etc.?
It depends on the timeframe or time horizon that you’re talking about. I don’t think hyperloops, drones etc. will happen in the next 10 years as means of transport.
Right now a lot of local development is happening on each of these. For example, IIT Madras has developed a hyperloop experiment and they’ve also done an air taxi. Many other IIT-level types of research are taking place now.
But I don’t think the industry has got into doing any other mode of transport making or moving things from point A to point B. Such things are only on camera, in photographs, but not in the real world.
What will happen in the midterm between now and 10 years is electrification. I don’t think anybody should doubt that now. Electric vehicles (EVs) will happen with the kind of support the government has and the kind of money they’re putting behind it, it’s bound to happen.
Three-wheelers will be the number one segment that is going to lead electrification, followed by two-wheelers in second place. Electric buses will be the third and number four will be passenger vehicles. That’s how the transformation will happen.
I don’t think hyperloop, drones as means of transport will happen in the next 10 yearsPawan Goenka
Q. Do you think the adoption of electric cars in shared mobility will be higher?
For electric vehicles the more you run, the more you save. Therefore it will be an ideal solution for aggregators who will be running 100km to 150 km daily. The private owners may run up to 30, 40 or 50 km a day. Their fixed costs are higher and variable costs are lower. The more you run, the more you save. Q. Why do you think the big automakers in India do not seem very excited in the EV space?
I would put it this way (they probably think) that I have a combination of a good business going right now. And let’s continue with that business without a lot of investment and also, the practical electric vehicles have been very slow in India. That is the combination that I see today.
Q. How optimistic are you about electric vehicles now? It has been about a decade since you talked about electric vehicles when Riva happened but despite that Mahindra & Mahindra is not able to contribute much to electric vehicles, rather Tata Motors has taken over.
I don’t want to comment on any specific company now. I have been very optimistic about electric vehicles and for the last five or six years, I’ve been saying this about electric vehicles, right? It did not happen, but now you can clearly see… how serious the industry is. The seriousness of the government came around when the FAME scheme was announced initially, though the FAME-I was not very successful.
But FAME II was very successful. Then came GST and now the PLI scheme. Yes, this government has done everything that they need to and the industry has been innovative.
But now I think even those manufacturers who are not openly talking about it, have significant projects on EVs. So far, if I take segment by segment, two-wheelers have at least a dozen good products in the market. Two or three of them are established, players. Many more of them are new players, for example, Ather Energy, Ola and Hero Electric, not Hero MotoCorp.
Hero MotoCorp has also come up with a product. TVS and Bajaj also have their own products. So quite a few products have come and many more will come. That’s a fairly well-established technology, and that will bring down the cost also.
Right now the main price is about INR 85,000 to INR 90,000. With the PLI scheme and with more volume, I think they would get to the mean cost of INR 75,000, which would be a pretty good spot.
On three-wheelers, we have Mahindra, Kinetic, and Piaggio. There are also five or six small new players. But again, once TVS comes in, the three-wheelers will take off quite well.
Four-wheelers, right now, are hurting for not having enough products in the market. We need many more products for tomorrow.
Q. What would be the inflection point for electric passenger cars?
In my view, If we can make INR 8 lakh hatchbacks with a 250-km range and INR10 lakh sedans with a 300-km range, the products are going to take off. That’s the sweet spot in my view. And I think it’s not too far and PLI support will help in achieving that.
A hatchback at INR 8 lakh with a 250km range and a sedan priced at INR 10 lakh will push the electric car demand in the fast lanePawan Goenka
Q. What do you think about Tesla’s demand for tax reduction on luxury electric car imports?
I think it’s a very controversial subject and some industry players might not agree with my view. In my personal view, absolutely personal, this can be reduced only for electric cars. Maybe it can be done for a limited number of vehicles and not open-ended. I think for anyone to come in will need to test the work and it is very difficult to commit manufacturing investment without testing. And therefore I would personally support only electric vehicles, the duty should be reduced from 100% to 60% with a cap on the volumes.
The government could perhaps slow down on new regulations, for the time being, allowing demand to come back for ICE vehiclesPawan Goenka
Q. The conventional industry, you can see, is going downhill, what’s your thought on that? Does the government need to put some focus on the traditional automotive industry too?
As the government has clarified, the PLI scheme includes also advanced technology components. Well, demand helps reduce the cost. Though the demand is high, I don’t expect the government to reduce GST.
The new regulations are increasing the cost. It is a real concern. I think the government could perhaps slow down on new regulations, for the time being, allowing the demand to come back. So that can be a balancing act.
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To improve financing for EVs, Niti Aayog is working with the World Bank to set up a $300-million ‘first loss risk sharing instrument.’ State Bank of India is the programme manager for this facility, under which total financing is expected to be around $1.5 billion.
