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Govt and auto industry need to have second thoughts about the electric vehicle business model. Here’s why!

Govt and auto industry need to have second thoughts about the electric vehicle business model. Here’s why!
Transportation2 min read
Have you ever heard about Formula E, the class of auto racing that only uses electric-powered cars?

Launched in 2014, this competition of electric vehicles (EVs) has 12 races in 10 cities - from Hong Kong to Montreal - and 20 drivers in 10 teams sponsored by of leading automakers like Audi, BMW, DS (the new upmarket brand from PSA Peugeot Citroen), and Renault.

From India, it has Mahindra, which got into the EV segment after acquiring Chetan Maini's Reva Electric in 2010, followed by subsequent investments in product development.

In the ongoing 2016-17 championship, Mahindra Racing stands third, only behind Renault and Audi.

"This is our most successful season in Formula E so far," says Mahindra Racing team principle Dilbagh Gill.

In India however, Chairman and MD Anand Mahindra is looking towards a different kind of race, one that might run for 13 years.

After all, the government has planned to move entirely to EVs by 2030, Mahindra has become the earliest mover in this field, before other big Indian corporations.

However, Mahindra would certainly knows that he isn’t and can’t be the only player in this field, restricted by the manufacturing capacity that was 2000 in 2016 and is planned to go to 5000 this year.

This is perhaps why he tweeted to Tesla CEO Elon Musk, "Time you got out here Elon. You don't want to leave the whole market to Mahindra, do you? The more the merrier - and greener."

Tesla’s initial plan of making a 2017 debut in India has been delayed, and for its plan to see the light of the day, government and the power minister Piyush Goyal need to significantly ramp-up Mahindra’s contribution in the field, Tesla’s entry and several such ventures.

However, auto analysts wonder if EVs should be the only option, and not hydrogen-powered fuel cells or other alternative clean energies? There’s lithium-ion battery powered electric cars, which are conveniently the most affordable zero-emission vehicles that one could buy, and also graphene battery technology, with 50-100 times more power density than lithium-ion batteries.

Not only this, hydrogen fuel cell technologies are also seeing fast paced research and developments, and lower costs too.

Fuel cell cars also have an edge over EVs, that they can be refueled as quickly as petrol or diesel vehicles and don’t need eight hours for being recharged, like EVs.

Also, they can travel further between fill-ups, but one fueling station would cost up to $2 million ('13 crore) to build, which is a major issue.

As per experts, Indian government's vision of a blanket technological direction should be reconsidered, keeping in mind the topography and density of the number of cities we have.

While it’s true that encouraging and incentivising new technologies is vital, the government and industry also needs to rethink the EV business model.

"As EVs are ideally suited for urban transport and specifically last mile connectivity, the government will need to promote the idea of working with fleet aggregators. The vehicles will also need to be customised for their needs," Lithium Urban Technologies founder Subhabrata Ghosh told ET.

"One must understand that EVs are essentially tablet on wheels. And that calls for a newer understanding of the product, the ecosystem, their usage and the business model," adds Ghosh.

(Image source The BC SCRAP-IT Program)

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