The government’s move to change policy on electric vehicles (EV) with regards to battery ownership has divided the small yet emerging club of EV-makers in the country. The companies who find the policy beneficial are speaking in favour. Those who find it disadvantageous are naturally opposing it. We take a look at both sides of the coin in today’s wrap. But, first, here is the complete look at what else made headlines in the automotive space this week.
Banks go slow on lending
With the Reserve Bank of India (RBI) cautioning against bad loans climbing to 20-year highs, banks and other financial institutions are developing cold feet in lending to the automobile sector.
RBI, in a report, said public sector banks’ gross bad loans ratio of 11.3 percent at the end of March might increase to 15.2 percent by March 2021 under the baseline scenario
Tata Motors, Mahindra swap positions in PV & CVs
Tata Motors and Mahindra & Mahindra have locked horns for supremacy in not just the car and SUV segment but the commercial vehicle segment as well.
In July, the two Mumbai-based companies lost their long-held positions to each other, actual vehicle registration data provided by the Federation of Automobile Dealers Associations (FADA) show.
Centre allows sales of EVs without batteries
Battery-powered two and three-wheelers may see some price corrections after the government allowed electric vehicles to be registered without their batteries.
The batteries in an EV make up 30-40 percent of the total cost of the vehicle. The government hopes that the upfront cost of the vehicle will thus be lower than petrol, diesel or CNG powered two and three-wheelers.
VECV buys Volvo’s bus division
VE Commercial Vehicles Ltd (VECV), a subsidiary of Eicher Motors on August 13 announced that it has entered into a business transfer agreement to acquire Volvo Group India’s bus business for a cash payment of Rs 100.50 crore.
The firm manufactures and sells the Eicher branded trucks and buses and also distributes Volvo branded trucks and provides aftermarket services and distribution of spare parts for Volvo branded trucks and buses.
Royal Enfield developing e-bike
Royal Enfield has developed prototypes of electric bikes and formed an internal team to not just develop products but to choose the right segment for entering the electric motorcycle space, a top company official said.
Eicher Motor-owned Royal Enfield is the leader in the 350cc and above bike segment in India with brands such as Classic, Himalayan and Interceptor. The company is the first from its industry to share plans about electric motorcycles.
How the battery policy will benefit swappable makers
The government’s policy on battery for electric vehicles (EV) seems to have divided the club of EV manufacturers right down to the middle. The policy, in a way, favours those EV manufacturers who have launched products with swappable battery options while leaving nothing for those who produce products with fixed batteries.
As per the advisory the government has allowed registration of EVs without their batteries; giving an option of knocking off 30-40 percent of the vehicle’s price to the consumer. But this option is possible only for those vehicles (the advisory encompasses only electric two and three wheelers) which allow removing of the battery from the vehicle.
Some of the popular electric two and three wheeler models come with fixed batteries and thus cannot benefit from the advisory. This puts them at a direct price disadvantage with their competitors, which could result in sales and market share loss. They also claim that fitment of the battery from anyone other than the vehicle manufacturer can create a safety risk.
Mahesh Babu, MD & CEO, Mahindra Electric said, “Up to the sale of the vehicle the OEM is responsible for the safety of the vehicle. A vehicle that is tested, manufactured and sold as an integrated vehicle and the OEM is responsible for the warranty. Either charging or swapping is post sale charge replenishing methods. Both can exist in the current framework. This move has not been thought through and the industry has not been consulted”,
Babu further claims that there is no other country which allows the sale of EVs without batteries.
“No country in the world allows the registration of EV’s without battery. We will explain to the government that this notification has created confusion”, Babu said.
Mahindra’s electric three-wheelers use the fixed battery technology whereas the company’s rival Piaggio uses the swapping technology. Charging time required for a Mahindra Treo is nearly four hours but for a Piaggio Ape E-city it’s under 10 mins through swapping.
Similarly the i-Qube electric scooter made by Chennai-based TVS Motor Company comes with a non-removable battery, just like many of the modern day smartphones. This does not allow the owner to extract the battery and take it home for charging unlike the option provided by its TVS’s competitors. Okinawa, for instance, has released a series of scooters whose batteries can be detached and removed from the vehicle for charging. This allows Okinawa to sell its products without the batteries.
EV makers will eventually have to fall in line if there is no rethink on the government’s plan. Switching to a swappable battery option from fixed battery technology is not undoable for the vehicle makers.
Hero MotoCorp-backed start-up Ather Energy presently does not offer any battery swapping technology on its scooters. However the company says it is ready to make the switch.
Tarun Mehta, CEO and Co-Founder, Ather Energy said, “The policy lowers the upfront cost that the consumer has to pay and allows OEMs to build superior products at an affordable price point. Based on our learning, it will likely take some time for consumers to understand and adopt this model of ownership, but in the long run it will be a big boost to the Indian EV industry”.