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Recharging India’s automobile industry
Internal combustion engine has powered humanity forward for a 120 years and it’s time has come. But is forcing the electric car issue by Governments across the world the only answer?
On September 7, Union Minister for Road Transport Nitin Gadkari, standing before the assembled grandees of the Indian automotive industry at the Society of Indian Automotive Manufacturers (SIAM) said that automakers have to move towards electric drivetrains or risk being “bulldozed” by the Government. Of course, this drew howls of consternation by the industry, with Gadkari’s seemingly ambitious target of all-electric car sales by 2030, which is little more than a decade away. Gadkari, being one of the senior-most Ministers in the Narendra Modi Government, and not one prone to hyperbole, his comments were seen as very serious and the immediate reaction by the industry was that his targets will be difficult to achieve.
However, two days after Gadkari spoke in New Delhi, Xin Guobin, the Chinese Vice Minister for Industry and Information Technology and one of Chinese President Xi Jinping’s key aides, announced to an assembled crowd of automotive manufacturers in Tianjing, an industrial city north of Beijing, that the Chinese Government was in the process of formulating a plan for their streets to become all-electric. While Xin did not announce a timeline, China has an aggressive carbon reduction plan in place under the Paris agreement and a bilateral agreement signed between Presidents Xi and former US President Barack Obama in 2015.
Reading between the lines, both India and China want to become global hubs for manufacturing electric vehicles. Beijing might have made a headstart with its immense industrial prowess, but it has taken huge missteps on the electric car path with ill-conceived subsidies and two of the hyped-up Chinese car manufacturers, Le4 Eco and Faraday Future, both in a major spot of financial bother.
However, other Chinese manufacturers have been far more realistic by not biting the bait laid out by global big boy manufacturers, into whose ranks the United States electric car manufacturer, Tesla has recently admitted itself. This by scaling down their initial plans and not manufacturing for the global market but for their home market.
Also, manufacturers such as Geely, headquartered in Zhejiang, which bought out Swedish manufacturer, Volvo Group, are incorporating technology from their global arms into making low cost electric cars. Much like the Android operating system developed by Google provided a massive shot in the arm for Chinese electronics manufacturers, it is increasingly likely that China will incorporate Western technology into its electric car push and will drive prices down for consumers across the world. And unlike internal combustion engines, China will not need to ape the West, they could easily set the standards for their own vehicles.
Over the past century, humanity has become used to being powered by refined petroleum products — on land, on seas and in the air. Internal combustion and turbine engines have been the power that has driven humanity to the heights it has reached today. But there is also no doubt that both these technologies have contributed immensely to climate change and global warming with their gaseous carbon and nitrogen emissions.
But to try to change global habits in the space of a decade will be a difficult task without the support of infrastructure. It can be done, as smartphone adoption over the past decade since the Apple iPhone first came around has displayed, but that was something new, something we did not do. Even then, Governments across the world had to work towards freeing up radio frequencies for the transmission of high-speed data over the air that led to the creation of billion dollar technology unicorns and the world we live in today, for better or for worse.
But there is a major difference between India and China, the biggest one being in the deployment of infrastructure and in resources. China is not only supporting its manufacturers with subsidies but locking up the resources required for electric vehicles, particularly light metals, such as lithium, which form the basis of the batteries that will power all these cars.
China’s massive electronics industry, particularly smartphones and battery packs, has meant that it has acquired skills in battery technology. India’s ill-thought out manufacturing programmes have meant that India might have become good and taking a technology such as the internal combustion engine and making it better, but other than the odd prototype here and there has done almost nothing in electric cars.
All the e-rickshaws on India’s roads, the tens of thousands of them have battery packs made across our border. Of course, there is the notable exception of Anand Mahindra’s electric company, Mahindra Electric Mobility Limited, which is genuinely doing path-breaking work on electric mobility and with their racing arm Mahindra Electric is also running a strong challenge in the Formula-E racing championship, displaying that Indian companies can compete with the best. So much so that the US car giant, Ford Motor Company, has decided to explore a partnership with Mahindra which will encompass electric vehicles as well.
But if India is to move with an aggressive all-electric system, the Government will have to play the biggest role. The first role will be to build the electrical infrastructure that will form the backbone of the new transportation paradigm. Not only will this mean building the electrical power plants to support infrastructure across the country by ripping up tens of thousands of petrol pumps up and down India. This will mean supporting, if not directly through subsidies, at least indirectly, start ups in battery and car technology that will create interconnected systems for cars of the future and companies that can ensure that cars can be charged rapidly and quickly. Support will also need to be given to existing automotive players to help transition to an all-electric future. India is a global leader in small cars and motorcycles, if India wishes to be a global hub, it cannot happen with corporate money alone.
In addition, if the aim is to take vehicles off the road, the Government will have to double down on public transportation infrastructure building, and yes, on this front, high speed trains are a start because they will have an immediate impact on road traffic.
But this entire episode also highlights the difference between India and China. The Chinese refrained from giving a timeline or saying that they will ‘bulldoze’ the automotive industry, but they actually might have a tighter schedule and could potentially bulldoze existing global automotive majors. So the auto companies will fall in line and not crib like they are in India. But the auto companies also know that China will support them and help in the infrastructure build out. If Gadkari is serious about electric, he and his Government has to put money into the transformation of the roads. It is an ambitious and truly admirable aim but talks and threats don’t really cut it.
(The writer is Managing Editor, The Pioneer)
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