Tesla’s entry will provide a boost to the Indian EV industry
Deepak MV, CEO & Co-founder, Etrio feels that 2021 will be an interesting year for electric vehicles (EVs) in India and the introduction of voluntary scrappage policy in the budget is a welcome move for the industry. Further, the allocation of Rs 1.97 lakh crore towards PLI along with customs duty increase on components should spur investments in domestic manufacturing.
IBT: How did the pandemic impact the Indian EV industry in terms of lockdowns and the ensuing operational challenges?
Deepak MV: The pandemic has impacted almost every industry and the EV industry is also one of the affected sectors. The global supply-chain was completely disrupted, leading to a substantial increase in raw material prices as well as logistics costs.
Furthermore, the country was already lagging behind in the targets under the FAME II guidelines, and the pandemic has slowed it down even further. The government had several plans for building the charging infrastructure of EVs in the country, but all of them were put on halt due to the onset of COVID-19. However, things have slowly started to change as various state governments are announcing scrapping policies and incentives to keep the ball rolling.
IBT: There are two counter tendencies that were created by the pandemic. The rise of remote working & decline in purchasing power, which dented consumer demand. On the other hand, there was a preference for private vehicle ownership due to social distancing norms. How did these 2 trends impact the demand for EVs?
Deepak MV: The declining purchasing power initially led to an overall slowdown in automobile sales. Passenger 3-Wheelers were heavily affected by the pandemic, with a drop of over 80%. The cargo segment, however, showed increased demand due to growth in e-commerce.
The latter part of 2020 has shown an increase in preference in private vehicle ownership, particularly with respect to EVs. Passenger 3-Wheelers have also shown signs of recovery in the latter part of the year, with electric passenger 4- Wheelers clocking higher numbers than FY 2019-2020.
IBT: In your opinion, what does 2021 hold for the Indian EV industry?
Deepak MV: 2021 will be an interesting year for the EV industry in India. One of the significant factors would be Tesla’s entry, which will provide the much-needed boost that the renewable energy sector needed. However, with the electric three-wheeler space becoming dense, and Indian as well as global OEMs announcing new electric four-wheeler launches, EV sales are expected to go up by a notch.
Increasing oil prices coupled with a more balanced cost of ownership of electric vehicles will be two most significant contributing factors to the increase in EV sales. It will be another testimony to the potential of India as an EV hub of the future. This will also create an opportunity for upcoming entrepreneurs to create visionary brands like Tesla, while putting innovation at the forefront.
IBT: What expectations does the EV industry have from the government?
Deepak MV: The key expectations from the government are as follows:
Enablement of charging infrastructure in the country at a faster rate
Details of PLI scheme to support for localization of EV supply chain in the country and enable innovation
Support for attractive financing option for electric vehicles
Inclusion of retrofitment incentives in FAME II policy
Faster roll-out of tax refunds and incentives
Smoother regulatory approvals
The government needs to open the sector for foreign investments which will help the OEMs in the country to cope up with their working capital needs. EVs are a very high-cost business, both on the OEM side as well as the infrastructure side. We are hoping to see the government opening up the sector for foreign investments which will attract new investments in the sector.
IBT: How can the government promote localisation of the EV supply chain? What are the main challenges when it comes to the domestic production of EV batteries in India?
Deepak MV: In this regard, the government already provided capital support for OEMs to set up facilities in India. The industry is hoping to see the PLI scheme in EVs also, like the government did in the case of mobile phones manufacturing. A production-linked incentives scheme for EVs is the need of the hour. We also expect the government to identify key bottlenecks in component design and manufacturing to allow time for grassroot innovations. This, we feel, will be key for India to step out of the shadows of other global leaders and create its own sustainability roadmap.
IBT: What is your take on the Union Budget’21 from the standpoint of the auto industry?
Deepak MV: This budget definitely demonstrates the commitment by the government to boost demand and generate employment through investments in areas like infrastructure, finance and healthcare. Also, the budget extends support to start-ups and MSMEs through tax exemptions and increase coverage of small companies threshold and, higher allocation towards MSME sector.
From an overall auto industry standpoint, the soft step towards the introduction of voluntary scrappage policy is a welcome move. However, driving implementation of the same through incentives/ disincentives and the necessary infrastructure is going to be critical. Further, the allocation of Rs 1.97 lakh crore towards PLI along with customs duty increase on components should spur investments in domestic manufacturing. The infrastructure investment focus would definitely drive demand for M&HCVs and construction equipment specifically along with boosting demand for mobility at large. However, the increase in custom duty and fuel prices will lead to upward vehicle price revision and higher running costs for the customers.
An IIM Calcutta alumnus, Deepak leads Etrio, an electric vehicle start-up with a vision to transform environment, lives and businesses. Etrio is the only company in the country rolling out new EV products and electrifying existing ICE products with a sharp focus on building an ecosystem for driving adoption of a range of green mobility vehicles including two, three and four-wheelers. He has played multiple roles as an entrepreneur, consultant, banker, sales professional and trainer in his almost two decades of corporate experience.
Deepak has worked in different roles in sales, finance and consulting domains before jumping into entrepreneurship. This journey first saw him driving channel sales of trucks & buses at two blue-chip companies, Tata Motors and Axis Bank. Prior to leading Etrio, he had co-founded Prashaste and established it as the foremost channel management consulting organization helping Fortune 500 organisations to establish Channel 2.0 . There he worked closely with the leadership teams of Tata Motors, M&M, BPCL, VW, Petronas, Toyota, Honda, Castrol among others.
He is a prominent speaker and has been invited to conferences, training, seminars at leading educational institutes, corporates and industry associations including CII, FADA and IIMs. Deepak is the recipient of prestigious awards including 40under40 award and most promising consulting organization and has been on the board of non-profit organizations.
In addition to his job, Deepak is an avid reader, yoga enthusiast and badminton lover. He resides in Hyderabad, Telangana, India. All views expressed by the spokesperson are personal and not necessarily those of his organisation.