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#HTSpotlight: Mahindra EV production @ Chakan from 2020 gives Pune serious e-hub status

Pune set to emerge as e-vehicles manufacturing hub in the next three years

pune Updated: Sep 26, 2018 19:54 IST
Roopesh Raj
Roopesh Raj
Hindustan Times, Pune
Pune,Mahindra EV,Chakan
Pune accounts for 20% of Mahindra’s electric retail sales in the country currently. (HT PHOTO )

Electric vehicle manufacturing is expected to pick up in Pune in the next three to four years. While Mahesh Babu, CEO, Mahindra Electric confirmed in an exclusive interview that the company would be launching an EV manufacturing plant in Chakan “which will be ready by 2020,” Mercedes Benz managing director and CEO Roland Folger said, “we will make the entire Mercedes portfolio electric by the year 2022. This means that we will offer our customers various electrified alternatives in every segment - from the compact car to the major SUV.”

“Pune accounts for 20% of Mahindra EV retail sales in the country currently. This is ahead of metros like Delhi and Mumbai, but the second highest for Mahindra EVs in India after Bengaluru,” Babu said. “All EV manufacturing of futuristic technology and high voltage systems will be done here.”

Folger was also gung-ho about the future of electric cars. He was point blank in his response to an HT query on e-cars and said: “We believe electric cars are the future and globally, we will make the entire Mercedes portfolio electric by the year 2022. This means that we will offer our customers various electrified alternatives in every segment - from the compact car to the major SUV.”

As pointed out by HT in its ‘Electric vehicles: reality check’ special report on Tuesday, while electric car users are happy with the low running costs as compared to the escalating cost of petrol and diesel, the high cost of these vehicles is a deterrence.

Ravi Kankhar, an e-bike user, for example, is not affected by the petrol price hike - today a litre of petrol in Pune is retailing at Rs 90.13, with the Power option at Rs 92.85. Kankhar, as reported by HT, uses an e-bike, and saves by his own calculation Rs 100 per day just on gas.

He is ready to buy a car now. However, in the absence of any “reasonable priced” EV, he is going to have to look at CNG hybrid options. “The cheapest EV in the market today is upwards of Rs 7 lakh,” says the site supervisor of the Dutch Palace marriage premises. “I can’t afford that,” he adds.

2020-2022 - ELECTRIC REALITY FOR PUNE
Electric vehicle use in Pune is doubling, y-o-y, driven in no small part by rising petrol prices
Maharashtra government electric vehicles industry policy
Rs 25,000cr Attract investment of Rs 25,000 crore and create one lakh jobs in the next five years.
15% Subsidy of 15% of the total price of electric vehicles to buyers
250 First 250 charging stations for two-wheelers, three-wheelers, light commercial vehicles and buses will get a 25% capital subsidy, with a maximum limit of .10 lakh a charging station. Electric vehicles will be exempt from road tax and registration fees. The electricity for charging electric vehicles will be charged at residential rates.
What India is aiming for
2017 Then power minister, Piyush Goyal: India was aiming for 100% EV sales by 2030.
2018 Senior government official: 30% of vehicles on Indian roads will be electric by 2030.
2018 Union minister Nitin Gadkari: We have decided to make EVs permit-free. With GST at 12%, there is no need for subsidy. We need to think innovatively to bring that environment. Ministry has prepared a report to raise production of EVs through non-fiscal initiatives in five years.
"We will soon put in place a stable policy regime around electric and other alternative fuel vehicles. Policies will be designed as a win-win for all and enable huge opportunities in the automotive sector." NARENDRA MODI, PM
Despite a compound annual growth rate (CAGR) of 400% in last eight years, Mahindra EVs are still a drop in the automobile ocean in India. EVs account for less than one per cent of total market share in 4-wheeler sector and when we reach above 1.5% EV adoption, prices of models available will come down further.
MAHESH BABU, CEO, Mahindra Electric
We need to create an ecosystem for EVs in India to tap the potential of the sector. In order to bring the customers into the decision to feel comfortable to buy an EV, the infrastructure needs to be ready to begin with. We offer our customers one of the broadest ranges of plug-in hybrids in the premium segment today.
ROLAND FOLGER, MD and CEO, Mercedes Benz

When CEOs open up on strategies...

Babu, CEO, Mahindra Electric, is well aware that customers are looking for a ‘reasonable priced’ electric vehicle. He has received many such customer feedback . His company can well claim first-mover advantage. After taking over Reva, India’s first indigenous EV, in 2010, Mahindra Electric was formed and the E2O followed in 2013. It’s been a drive of plenty of accolades and awards as the EV industry leader. However, in real terms of making an EV a four-wheeler product of mass consumption (cue Maruti Suzuki, who declined response to HT’s questions), it’s still an uphill climb.

“Despite a compound annual growth rate (CAGR )of 400% in last eight years, Mahindra EVs are still a drop in the automobile ocean in India. EVs account for less than one per cent of total market share in 4-wheeler sector and when we reach above 1.5% EV adoption, prices of models available will come down further,” is how Babu explains it. In fact, apart from Mahindra, the other major player in the future of EVs in India has emerged as Mercedes Benz.

Two key catchwords emerge from HT’s interaction with the CEOs of Mahindra Electric and Mercedes Benz - “ecosystem” and “sustainability”.

“We need to create an ecosystem for EVs in India to tap the potential of the sector. In order to bring the customers into the decision to feel comfortable to buy an EV, the infrastructure needs to be ready to begin with,” says Benz’s Folger. “A sustain eco-system for mobility,” is how Mahindra Electric’s Babu describes it.

Both are referring to an auto environment, where consumers are at ease owning and running an EV. Mercedes Benz managing director and CEO Roland Folger says that systematic hybridisation is an intergral element of the Mercedes-Benz strategy.

“ We already offer our customers one of the broadest ranges of plug-in hybrids in the premium segment today, with eight vehicle models on the road. Thanks to the latest lithium-ion technology and further developed intelligent operating strategy, a Mercedes-Benz plug-in hybrid will for the first time offer an electric range of 50 kilometres.”

Babu runs through a list of EV plus-points and Mahindra Electric deliverables that echo its commitment to such an ecosystem. “We produce our own battery packs and our EVs have recorded over 75+ million on-road kms of drive time. Not to mention, completely pollution-free,” he says.

PM Modi behind India’s e-wheel

Amid the strategies that the market leaders are adopting for tapping the potential in the sector, the government steps in and no less than the Prime Minister is driving the sector. On September 16, at the Niti Aayog’s global mobility summit, Move, Prime Minister Narendra Modi said, “We want to build India as a driver in electric vehicles. Clean mobility powered by clean energy is our most important weapon in our fight against climate change.”

The PM did not unveil a policy for electric mobility, but did promise one. “We will soon put in place a stable policy regime around electric and other alternative fuel vehicles,” Modi said. “Policies will be designed as a win-win for all and enable huge opportunities in the automotive sector.”

It’s a government stand on EVs that Mahindra’s Babu prefers to take the long view on. “The government has the 2030 vision that is all about a sustained eco-system for mobility,” says Babu, “I believe that is the way forward.”

However, public charging stations are cited by Babu as being a key part of the eco-system. MSEDCL, the city’s power supplier recently announced 10 public charging points for EVs in Pune.

For the man on the street though, affordability is still where the rubber meets the road.

(Concluded)

First Published: Sep 26, 2018 14:25 IST