We expect the shift to electric to be led by the mass mobility segment followed by personal mobility: Mahesh Babu, CEO, Mahindra Electric
Cost differentials between EV and conventional vehicles are expected to be plugged by 2022-25, while battery costs will halve during this period, leading to early adoption of Electric Vehicles, Mahesh Babu, CEO of Mahindra Electric says in an interview with TradeBriefs. Excerpts:
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How confident is the company about government's target of converting the entire passenger vehicle fleet to electric by 2030?
Ans: India’s EV vision is a bold and ambitious one, and is a strong force that has brought all stakeholders together to discuss and evaluate the best way forward; foresee barriers to adoption and develop the best ways to overcome them. We are very happy that the government has vocalized it and intends to support it with strong policy measures as well as taking the lead in EV adoption. The exponential jump from the current around 1500 four wheelers a year to a forecasted 3 million by 2030 (based on Goldman Sachs report), it will require a lot of factors to align and work in tandem.
In terms of actual implementation of vision 2030, even if 20-30% of the target is achieved, it will be a big leap forward for the entire EV industry. Certain segments like two wheelers, three wheelers, buses and even four wheelers in fleet application have a great potential to go electric, very quickly. We are expecting that the shift to electric will be led by a transformation of the mass mobility segment followed by personal mobility.
In our view, the EV market is poised for growth backed by supportive initiatives taken by the individual ministries in line with the recommendations from the NITI Aayog report (released in May 2017) and we at Mahindra will be ready with globally competitive technologies and state of the art manufacturing facilities to supply.
Would the company look at manufacturing of electric batteries in India and by when?
Ans: We have been selling EVs in India for almost a decade and battery assembly has been a core activity in that. We are also strengthening that position further by building on the technical skill set that our teams have.
At present, we source battery cells and pull them together in to usable batteries for EVs, here in India. For sourcing of the latest and the best in battery cells, we have partnered with the likes of LG Chem and others; and we intend to continue these relationships for the foreseeable future. Our energies are completely focused towards enhancing our technical know-how of electrically, thermally and structurally managing the battery pack to deliver a superlative performance.
We have also ramped up our battery assembly and aim to add to this further. Just last year we inaugurated India’s first EV innovation center at Bangalore, and we also announced additional investment planned towards not just production capacity but also for R&D.
In terms of pricing of electric batteries, how soon can we expect the prices to drop to become economically viable for general vehicle owners?
Ans: At Mahindra Electric, we continuously strive towards making EVs more accessible and easy to adopt for the widest audience possible. And hence, bringing the cost of EVs down, in the face of currently expensive technology, is one of our main focus areas.
The batteries of an EV constitute almost 40% of the cost, making it one of the key factors which determine the price. The trends from the recent past indicate towards rapid decline in battery costs. Costs for current Li-Ion battery family are expected to reduce through till 2030. Forecasts say that battery pack level cost will decline to $100-150/kWh by 2021-25 from the current around $250/kWh. Newer battery chemistries would of course follow their own cost reduction curve on maturity.
Keeping this trend in mind, the next five years are going to be very crucial for the EV industry. The cost differential gap between EV and ICE (including fuel savings) is also expected to be achieved by 2022-25.
Would Mahindra like other global auto majors like Volkswagen, Tesla and General Motors plan to secure the lithium and cobalt resources by creating joint ventures with global miners?
Ans: Battery technology is evolving very quickly. Most players are experimenting with different chemistries to bring about the maximum efficiency in EVs and battery management. Given this, we are currently not looking at a complete vertical integration of our EV supply chain. We intend to continue partnering with cell manufacturers like LG Chem and sourcing cells for the foreseeable future. Our focus will remain on localising the assembly of usable battery packs and the technology behind it.
- TradeBriefs Bureau -