According to Bhagavad Gita, it is not possible to become an effective leader if the leader does not understand his or her own self, and does not understand his or her own potential and purpose.
The above reflections from Gita are indeed relevant to all the stakeholders of our evolving Electric Vehicles (EV) ecosystem. We need to believe that we can be a leader in the near future and sustain it and ensure once we are there, we drive the global EV ecosystem in the true spirit of Vasudhaiva Kutumbakam. Thereby ensuring the benefits of mobility and de-carbonisation in order to reach all the stakeholders and emphasise its contribution in reversing the impact of climate change, which has resulted in economic and societal disruptions. The current global environment for EV for masses/ mid-priced segment, commercial segment is witnessing a significant impact due to China’s EV ecosystem across the value-chain – from raw materials for making cells to other finished components/ subsystems- EV compatible chassis, motor- controllers, other Electrical and Electronic components etc. including software at sub-system and Vehicle level. In the Indian context, the flagship programmes like FAME-1,2,3 by the Government of India over the last five years complemented with various State Government initiatives for fostering adoption of 2w/3w categories across retail and commercial users have created a reasonably good platform for the “ecosystem to grow sustainably by balancing risk with opportunities at hand”.
Indeed, there have been numerous instances of uncertainty in the marketplace on account of the Government policy changes, norms/standards for charging, component specifications –which can be considered as a process of the Government and EV ecosystem learning from mistakes, global benchmarks that can be adopted/adapted to our real world conditions. We have seen examples of this in our 2W, 3W segment and buses too.
The GOI, State Governments and key industry stakeholders need to work on a realistic roadmap for furthering each “category of vehicles as each meets certain user case needs based on day-to-day operational demands”. These demands keep pace with judicious and thought out regulations driving policy that calls for incentives (from Governments) that will provide financial engineering manoeuvrability to firms backed by non-Governmental financial instruments from multilateral institutions, banks and capital markets (bond markets in particular). This will ensure not only a considerable degree of level playing field between big players (including legacy OEMs- EV ventures), start-ups/ initial growth firms); but also aid in ensuring the technology transitioning within and new vendors- in tier-1 and 2 who can also get aligned to prioritise the following:-
- Demand satisfaction, decarbonisation objectives, end user satisfaction levels on TCO (Total Cost of Ownership) and ROCE (Return on capital Employed) that are key Financial parameters for the ecosystem
- Investment plans – manufacturing EV –compatible chassis configuration, battery assembly (based on cell chemistries, cell forms and application needs) and other critical and ancillary components/ sub systems/ parts that go in every EV category
- Firms can raise capital via bond markets at low cost of capital (backed by Govt.) before IPO listing too; be suitable candidates to funding via pension funds, sovereign funds, multilateral agencies and commercial banks ( provided Govts can be some sort of collateral/ credit guarantees with transparent ratings of performance as per firms contribution to the EV supply chain)
- This will ensure performing firms in Research and Development, product development activities, specialised system integrators, bus body manufacturing, full service OEMs have bandwidth to not only raise capital based on their balancesheet key indicators but also get grants for generating revenue generating via patents – process, products, design so on ( whether they use it in their category vehicle platform or not)
- Human capital development of diverse skill sets required at various levels in an EV firm.
Taking the “E-BUS” and “E-Truck” category as an example, some suggestions for Govt to look at possibly doing deeper analysis on the Techno-commercial level and make necessary changes for aiding, the growth (demand generation from State Transport Unions (STUs) and Private operators) would be to look at following: - Relook at GVW, Axle weight allowance, increase in overall length norms based on category platform for bus n trucks alike. *Dedicated fast “access control” lanes wherever possible, fast charging infrastructure- incentives, standards, Financing needs
- Relook at depreciation norms that will affect Balance sheet key parameters beyond cosmetic aspects of window dressing accounting needs providing elbow for Financial Engineering by firms (raising debt for capex, working capital needs, sources of collateral needs including Govt. for proven and validated Battery designs and cell chemistries based on Application user case scenarios etc.)
- The battery cost being a major cost of an EV, there are other aspects that can be looked at to create “Strategic investment pool at industry level “as part of Govt. of ACC (Advanced Cell Chemistries) programme. To address India specific “Operating conditions” and avoid knee-jerk policy changes and Financial incentivisation action plans.
- Encourage multi-cell chemistry packs –design, production including for advanced Battery Management systems for optimum performance and longevity. this should be done with industry accepted know how on “ energy density vs power density” and “Gravimetric and Volumetric density” trade-offs across cell chemistries and cell forms
- Have clear guidelines for buses in terms of using – Monocoque VS ladder chassis architecture. This impacts safety, battery sizing, others performance limits and body styles as part of functional design and cost implications for Operations and Maintenance *Institutionalise the importance of “ battery cycle life cost / charge instance / km served” though certain user uses will be techno-commercially non-feasible or provide less leg room for Financial sustainability of operations, considering the many Financial stakeholders who could be involved
(The above article has deliberately avoided mentioning about industry/ category-specific growth rates in India and infographics (for example:- no. of vehicles sales by category in India or comparison with other similar markets, cell chemistry and cell form used across categories)
