Edited excerpts:
Q. You mentioned that VECV is investing close to INR 1,000 crore in developing new fuel technologies. Could you share some more insights in terms of what are the key technology options that VECV sees as more relevant in India, and accordingly appropriate investments?
Today, if I look at the global scenario, and from very insightful discussion with Volvo group also, everywhere we see that there’s a sort of confusion in the sense of what the future is looking like. We have survived as an industry with one technology for the last 50 years, and that is the internal combustion engine. And, Diesel, largely Diesel run, and now with some percentage moving to CNG. But largely, it has been the diesel and also internal combustion engine technology has been there. But looking into the future, we’ll see EV,(Battery Electric Vehicle), Hydrogen internal combustion engine, or (Hydrogen) fuel cell, out of these three technology options, which is going to be the most relevant technology which will which will propel the future growth, and also lead to decarbonisation which every industry is today talking about.
Largely the consensus is coming out that EV will be relevant for the smaller vehicles, buses for intra-city application, whereas the inter-city long haulage trucks will be going to the Hydrogen fuel cell or the Hydrogen internal combustion engine. Good thing between the Hydrogen internal combustion engine and Hydrogen fuel cell is that the fuel part — Hydrogen, continues to be the same for both. There’ve been challenges for the Hydrogen generation, through the electrolysis process. The challenge related to storage and transportation of Hydrogen, and safety concerns are the same whether you go for the Hydrogen internal combustion engine or Hydrogen fuel cell technology.Q. And also the colour of the Hydrogen, right?
The colour issue of the hydrogen you can say is also there. Some difference could be there that you have either hydrogen, grey hydrogen, which is relevant for the hydrogen internal combustion engine. Fuel cell will require more purer hydrogen, green hydrogen. That is the one difference (between H2ICE and Fuel cell technology options). But as far as safety, handling, storage, what pressuring you need to do — 750 bar, that may continue to be the same in both options.
So, going forward, in another four to five years, there will be only two things to talk about. Either you have an EV side, or you have got the hydrogen-led fuel technology. And, if we talk about global developments, and if I look at players like Cummins, they are working on all the technologies. If I look at competition, they’re also working on all technology options like Fuel Cell and Hydrogen Internal Combustion Engine, and so are we.
Q. There’s also an engineering direction of developing a fuel agnostic engine platform. Are you also looking at similar engineering approaches to minimise investments required in this transition phase?
I think everybody is taking a similar approach. If I look at our engine also, in the engine platform, there I’m using for diesel, I’m using for CNG, and I am now upgrading that for Hydrogen internal combustion engine.
Largely below the cylinder head, everything is almost common in all the three technologies. By changing the cylinder head, you can also convert it to biodiesel, you can convert it to CNG., or you can convert it tomorrow to a Hydrogen internal combustion engine. I think everybody is getting attracted towards the hydrogen internal combustion engine, because most of them are able to use the current manufacturing setup as well as the design and product setup.
While ideally it’s better to have Hydrogen fuel cell, but considering the cost and technological challenges hydrogen ICE is seen as the low hanging fruit and especially from an emerging market perspective. In the West, OEMs were focused almost only on Hydrogen fuel cell technology. But it looks like they are seeing merit in H2ICE also.
If I also see in the West, for example, a player like Cummins is developing Hydrogen ICE engine technology not only for India, but they are working for applications across the globe. They see a (global) relevance is there, and that’s why they are working on this technology.
Q. There are two different approaches or viewpoints — a Darwinist approach of developing and offering a bouquet of technologies, and letting market forces choose the best option, while the other is to focus and invest only on a select set of one or two new technologies and putting all policy support and resources to promote them. Which approach do you think is more preferable, and more practical for India?
If I think, as we see, consolidation is happening across the industry. There we see that it is definitely very important that we look at fleet owners’ approach and make sure that these things are well suited for the transportation sector’s needs.
Q. So you’re saying that it’s better to offer them a lesser number of cleaner transportation options to choose from than offering a larger bouquet which perhaps may not be so conducive for them to have in a fleet.
It may not be very convenient from their perspective. We feel that we give them one similar solution. That would be more beneficial for our customers.
We have already invested about 30% (of the nearly INR 1000 crore earmarked for alternative fuel technologies) and about 70% will come in the next four to five years. Investment will be across all technologies, all the three technologies.R S Sachdeva, Dy. CEO and Chief Transformation Officer, VECV
Q. Of the nearly INR 1,000 crore provisioned for developing new technologies at VECV, how much of that have you already invested, and how many years would the rest be invested over? Would it be fair to assume that of the rest 70%, almost all of it will be invested for battery electric and hydrogen technologies, or would there be some more futuristic technology development also?
We have already invested about 30%, and about 70% will come in the next four to five years. Investment will be across all technologies, all the three technologies I have talked about.
We are very clear that it (LNG) can be a very relevant technology, absolutely no issue at all, but the only problem is the availability of LNG. If we ensure the availability (of LNG), definitely there’s an operating economy for the fleet operators and definitely they’ll go for them.R S Sachdeva, Dy. CEO and Chief Transformation Officer, VECV
Q. What is your take on LNG? With the focus on growing a gas based economy, does LNG have maybe better prospects than CNG?
For LNG, the main important thing is the supply chain, the availability of LNG. That’s the biggest issue being faced today. And, it is dependent on imports. Once this aspect is taken care of, then people are very very keen. Even we have handed over 20 LNG vehicles to Volvo Trucks. So, we are very clear that it can be a very relevant technology, absolutely no issue at all, but the only problem is the availability of LNG. If we ensure the availability (of LNG), definitely there’s an operating economy for the fleet operators and definitely they’ll go for them.
Q. If this part of distribution is taken care of, LNG will be a better solution than CNG, considering that LNG trucks also have a significantly longer driving range in a tankful, compared to CNG trucks.
It will definitely be a better solution, because you’re able to carry a higher quantity of fuel on the vehicle, which is not possible in CNG. Because in CNG you’re carrying the gas with 260 bar pressure, and you’re able to carry maybe one-third of the gas that you can carry in the liquid form of LNG. So that way for long range trucking LNG becomes a much better option.
In LNG, it is carried in -160 degree centigrade in the cryogenic tank. So once in the liquid form, you’re able to carry much higher quantity on the vehicle and a single cylinder can take the heavy duty vehicle almost 700 kilometres, which may not be possible in a CNG truck with even five or six cylinders because it’s in the gaseous form.
As you prepare for a serious play in the EV space, is there any area/s where Eicher is leaning on Volvo for the journey?
The good thing with the joint venture is that Volvo supports on all technology ideas. Whatever technology is relevant for India, that’s relevant for us. We feel very fortunate from that perspective.
Q. Can you share any example or anecdote regarding Eicher’s contribution in terms of frugal engineering or ingenuity which Volvo may have adopted for global markets.
There are many examples. Many of the concepts, like engine concept which they have adopted in the global form. And many other areas like lightweighting, and other areas where the reverse innovation also has happened. Difficult to pinpoint exact examples, but I can tell you the chassis system, the powertrain system, a lot of the areas where they’ve carried forward the concept from here.
In advanced countries, we see that almost 60%-70% of the truck market are tractor-trailers. In India also, I see a movement from 20-25% to 60% in the next five years.R S Sachdeva, Dy. CEO and Chief Transformation Officer, VECV
Q. As an industry veteran, what major changes do you see happening in the Indian commercial vehicle industry a few years down the line?
A lot of focus today is on decarbonisation. Now, decarbonisation is coming through the alternate fuels, and second is coming through the upgradation of the emission norms, like Euro seven coming into India. So, these are the two areas which are prominent there. And, secondly, there’s a high focus on driver comfort. All trucks, from a certain category, will be air-conditioned from next year. That’ll contribute significantly to the driver’s comfort.
Another area is the better ride, suspension. And then there is the use of the advanced driver assist systems (ADAS). We’re using ADAS systems like emergency braking, front collision warning, driver state monitoring, so a lot of features are coming which are helping the trucks get upgraded. Going forward we see that vehicles will emit less, and they will be much more comfortable.
Next, on the segmentation side, vehicles are getting more and more segmented. As GST has now proliferated, also leading to the growth of the Hub and Spoke arrangement. Actually we are seeing that thing happening — bigger vehicle movement between hub to hub, and the hub to spoke in smaller vehicles. And, in hub to hub, we are witnessing a growing trend of the tractor trailer’s share in the overall heavy duty truck industry over the past three years. Its share has already come to 30-35%. One-third of the vehicles today are tractor-trailers. which was 20% about three years ago.
So these are the major changes I see happening — lower emission through alternative fuel technologies, and through upgradation of the current emission norms, safer and comfortable driving conditions for the driver. And third, is the movement toward the tractor trailers. In advanced countries, we see that almost 60%-70% of the truck market are tractor-trailers. In India also, I see a movement from 20-25% to 60% in the next five years. So, that’s the journey.
Q. And the other trend, which is happening in the automotive industry is the softwarisation. Have you also invested in setting up your software technology development teams?
Already steps are there in that direction. VECV has tied up with iTriangle (a transportation telematics company), for a joint venture for connected and software services. And, we have got a very strong team in the software side, in the areas of vehicle dynamics, emissions, and services.
