India Inc wants Niti’s EV juggernaut to move out of the fast lane
Govt wants a 2023 deadline for three-wheelers and 2025 for two-wheelers up to 150cc capacity to go electric.
However, founders of electric vehicle startups were all for such a move, said the people cited above.
The government is reportedly thinking of a 2023 deadline for three-wheelers and 2025 for all two-wheelers up to 150cc capacity to go electric. Manufacturers pointed out that they have already been forced to accept an accelerated timeline for tighter emission norms that go into force next year and entail expensive redevelopment.
Bajaj Auto managing director Rajiv Bajaj expressed bewilderment over the logic of a ban on two- and threewheeler vehicles powered by internal combustion engines (ICE) in three to four years. It was more “shock and awe,” said the chief of the country’s second-largest motorcycle company, referring to Niti Aayog discussion.
Venu Srinivasan, chairman, TVS Motor, India’s third-largest two-wheeler maker, was equally critical. “You want to negate in one stroke” the strides made by India in building the world’s largest two-wheeler market, which exports three million vehicles annually, he told ET.
A senior Niti Aayog executive defended the policy think tank’s agenda and explained that the intention was to lower pollution and stay in step with other global markets in terms of electric vehicle (EV) technology.
Srinivasan and Bajaj, who together represent more a third of India’s twowheeler market and more than half of the three-wheeler market, argued the case for more reasonable deadlines. Pawan Munjal, chairman of Hero MotoCorp, India’s biggest twowheeler maker, didn’t attend.
Srinivasan made the presentation on behalf of Society of Indian Automobile Manufacturers (SIAM), the industry lobby group. Bajaj and Srinivasan subsequently laid out their case and responded to queries.
While Niti Aayog wanted a comprehensive road map for EVs in two weeks, Srinivasan said it would take at least four months as stakeholders — supply chain including vendors and battery makers — and global consulting firms would be approached. “No way can we go back in two weeks,” he told ET in a phone interview.
Niti Aayog officials had argued that the issue was not new and had been deliberated upon at the Global Mobility Conference last year, which many industry chieftains had skipped. Srinivasan said the conference had not been meant for policy-making.
Niti Aayog got support from fledgling two-wheeler EV startups, represented by Tarun Mehta, founder of Ather Energy, which makes electric two-wheelers, and Sulajja Motwani of the Firodia group.
Other EV startups backed their views but Srinivasan pointed out that their volumes were low. “People who want to do it tomorrow are making 1,000-odd vehicles annually,” he said.
A startup entrepreneurs cited the example of China, which produces 20 million electrically powered motorcycles annually. Since EVs are more expensive, they will require state assistance in this price-sensitive sector, Bajaj said. “I’m in awe of the apparent willingness to subsidise EVs — an approximate ?1 lakh per vehicle — to help achieve reasonable price parity with ICE two- and three- wheelers for an estimated minimum industry size of 25 million by 2025,” Bajaj said.
Srinivasan and Bajaj said they are in favour of monetary and other incentives for transitioning to EVs.
Niti Aayog officials said the courts could impose a ban if the industry did not act voluntarily. They pointed to high levels of pollution and the fact that fast action would help put India on the cutting edge of EV technology, unlike in some other high-tech areas.
Bajaj felt this view was unrealistic. A ban on ICE vehicles would mean importing lithium ion batteries, the costliest component in EVs, from China, offseting any drop in oil imports. Further, India’s electric grid won’t be able to support the charging of 25 million EVs at night, Bajaj and Srinivasan said. “This is a complex issue… it needs adequate thought,” Srinivasan said, adding that it will have a significant bearing on an industry that employs a million. “Every manufacturer is working on EVs.”
Bajaj disputed the contention that EVs are superior in terms of environment and experience.
“In spite of all the fiscal sops in place, the great electric revolution apparently can't get off the ground unless it stands on the crutches of banning internal combustion engine two and three wheelers,” Bajaj said. “Indian two and three wheelers that are the global benchmark for low emission and high fuel efficiency must be banned within the next few years with scant deliberation on where the employed are to go or from where the electricity for charging is to come.”
China’s ban on ICE vehicles meant it lost out on the global marketplace, which was filled by Indian manufacturers such as Bajaj Auto and TVS Motor, he said. “The unshakeable fact is that our industry is world class, for it makes the lowest emission and highest fuel-efficiency vehicles in the world, exports every year over 3 million vehicles worth about $3 billion and employs at home across its supply chain one million people whose contribution to India's GDP is anything but insignificant,” he said.
Both Bajaj and Srinivasan favoured a phased rollout of EVs. According to Srinivasan, certain quadrants such as the most polluted regions could be taken up first for implementation.