India Should Start with Focus on EV Technology and Design_ Magenta Power Interview

The coronavirus (COVID-19) outbreak has severely affected the Indian economy, which was already losing pace. The electric vehicle (EV) industry, like all others, is reeling under the unprecedented challenges posed by this crisis.

However, as the world deals with the pandemic, one factor that may work in favor of electric vehicles, especially two-wheelers, would be the commuters’ choice to switch over to safer electric vehicles.

The EV industry sold 156,000 electric vehicles in the financial year (FY) 2019-20. According to the Society of Manufacturers of Electric Vehicles (SMEV), the sale of electric vehicles in India increased by 20% in 2019-20, mainly driven by rising sales of two-wheelers.

Mercom interacted with Maxson Lewis, the managing director of Magenta Power, to talk about what’s going on in the EV industry during these testing times and where does the Indian market currently stand. Here are the edited excerpts from the interview:

Can you give us an overview of where the Indian EV industry is compared to other countries?

As compared with countries in Europe or North America, we are a few years behind in terms of adoption, infrastructure, and regulations. Also, as compared to countries like Sri Lanka or Bhutan, the per capita adoption of an electric vehicle is lower in India. While these numbers are not a direct reflection, they give a sense of how in India, we may be slipping on the opportunity to move towards cleaner mobility.

In 2018, there were a lot of discussions and focus on moving towards EV, but we seem to have lost the plot. On a positive note, however, the adoption of EV in the two-wheeler segment had been the highlight in 2019-20, which was expected.

How has the pandemic changed the dynamics of the Indian EV market?

The electric vehicle is a subset of the overall automotive industry, which has been hit extremely hard, and the EV industry is not isolated from that impact. However, the automotive recovery numbers in Europe and America are indicating that the percentage share of EV in the automotive numbers is increasing significantly.

In India, we see a positive impact where EV has become a part of the buyers’ consideration set. This is also obvious from the inquiries we get on our toll-free number about which electric vehicles to buy.

Where should the government’s focus be right now to promote the domestic EV segment?

EV is a technology-intensive industry and is a long-term game. Hence, research and development supporting EV and component manufacturing should be the key focus of the government. The recent announcements made by various ministries to make India the EV capital of the world must be followed up with on the ground changes to make it possible.

What are the challenges of upscaling EV battery manufacturing units in the country?

Battery manufacturing is a game of scale – “giga-factories”- in battery parlance, which makes it a capital-intensive endeavor, which at this time may come in short. The second and more critical point is mineral security. Scale requires a strong supply chain for the raw materials which go into a battery, which as a country, we are short of and need to start developing. After China, we are best placed to move in. But this cannot be pushed by just private entities but requires government support at the geopolitical level.

India is now talking about becoming self-reliant. How long do you think it will take India’s fledgling EV segment to become completely self-reliant?

Self-reliance needs to be carefully defined. In a global economy, there is nothing called 100% self-reliance. Only natural products like food that get produced and consumed locally can be considered in the fully self-reliant space. In the case of EV, 100% self-reliance is not possible since we do not have all the raw materials that we require, or even if we do, that cannot be extracted economically yet. So, we can move towards self-reliance step-by-step and component by component.

To start with the EV technology and design is something we can start with immediately. I see that we are seven years away from saying that we are more than 60% self-reliant on the components.

How do you see the current crisis affecting the industry this year? What are your projections about the segment for 2021?

 Like I said earlier, EV as a subset of the auto industry that has been adversely impacted purely because the purchase capability has reduced, and there is overall uncertainty towards spending, which is non-essential. If the pandemic were not to happen, we were betting that Dussehra 2020 would be the inflection point for EV with many new launches. However, the current situation is what it is, and we believe that EV projections like any industry must be moved out by a year.

Any final remarks on the current shape of things in the EV segment and where it is headed?

It is proven already in matured markets that for EV in India, it is not a question of will. It is a question of when. The Indian adoption of clean mobility will follow the same trend which happened in telecommunications – we will start slow, but when it does, we will leave other countries behind.

Notably, the Union Budget 2020 left the stakeholders of the EV industry disappointed with little to no push given to this segment to thrust it forward. Due to the government’s plan to increase customs duty on various kinds of such vehicles, people fear that imported EVs are going to be expensive. This move was proposed to encourage the manufacturing of local products.