Think like Verne
By KS Nayar
The 19th century French author Jules Verne was instrumental for my interest in science. His science-fiction novels Around the World in Eighty Days and Twenty Thousand Leagues Under the Sea set my mind in fire.
It was Verne (1828–1905) who said “I believe that water will one day be employed as fuel, that hydrogen and oxygen which constitute it, used singly or together, will furnish an inexhaustible source of heat and light of an intensity of which coal is not capable………Water will be coal of the future.”
No modern scientists would dare challenge Verne. If he had been alive today, he would have ridiculed major automakers that are in slumber. He would urge them to pursue innovation that might be seen as an impossible realty.
As he wrote: “Science, my lad, has been built upon many errors; but they are errors which it was good to fall into, for they led to the truth.”
Some big automakers are reluctant to shed their legacy and embrace disruption for fear of errors. It is here that start-up upstarts are scaring the big guns. Facing the threat, legacy firms, are scrambling for tie-ups with smart young technology entrepreneurs. With the potential of Silicon Valley replacing Detroit as the capital of auto makers, the big three are seeking tie-ups with digitally savvy companies.
This trend is reflected in a raft of deals to fire up the engines of big auto giants. The fast lane of growth is getting crowded by a new generation entrepreneurs such as Leon Musk. Automakers realise that they cannot survive unless they embrace disruptive technologies to navigate the major changes of the coming decades driven by big innovations: car sharing, battery-powered electric vehicles, autonomy and hydrogen power.
It is in this context that one should view the Indian decision on electrification of cars by 2030. Indian companies are confident of taking on the technology challenges if private-public participation is assured with appropriate legislative environment of incentivising initiatives by the government.
Some analytical reports indicate that policies such as government footing 69% of R&D bill for developing indigenous low-cost electric technology is showing results. Around 25,000 EVs have been sold during the last fiscal year. It is reported that transitioning to 100% electric vehicles could help India save up to $300 billion in oil imports and nearly 1 gigatonne of carbon dioxide emissions by 2030
Decades ago India has been working on electrification and hydrogen fuel cell technologies. But it hit road blocks because of a lack of innovative government policies and the constrictions of monopoly of a few players in the automotive sector. It is in this context that one should see the observations of German and Japanese companies operating in India. They have been critical of the country’s all-electric vehicle plan for 2030.
One top official of a German luxury car maker said that adopting a less ambitious plan of promoting e-cars would make sense. His view was that nationwide auto electrification was not commercially and technologically viable.
“Yes we can achieve” should be the challenge that every Indian industry segment should take taking a leaf from what Indian Space Research Organisation has achieved year after year. It offers the world’s least cost satellite launches, and its scientists and engineers are defying conventions while scaling technology heights.
‘Achieving the impossible’ is the badge of honour they wear. A couple of years ago ISRO had developed a demonstration vehicle using hydrogen fuel in collaboration with Tata Motors. It is said that by 2040 the whole world will be moving on hydrogen. India is unlikely to be behind in this race. It already has the hydrogen roadmap.
The present government’s proactive policies are putting considerable thrust on electrification and hydrogen plans. Tata and Mahindra & Mahindra, which have started selling EVs are bullish despite the fact that their industry organisation — Society of Indian Automobile Manufacturers (SIAM) — in a whitepaper indicated that going all-EV might not be possible before 2047.
However, market analysts say India is set to see a CAGR of over 37% during 2018-023 in EV growth. Recent government initiatives, such as incentive schemes to encourage environment-friendly EVs, the growing consumer interest in EVs, and huge investments by OEMs indicate robust growth prospects.
It was the EV statement of Piyush Goyal, former Power Minister who is now the Railway Minister, which set the current discourse on electrification. He said India was going to make EVs self-sufficient like UJALA or Unnat Jyoti by Affordable LEDs for All. This scheme is aimed to conserve energy by distributing 770 million LEDs by March 2019 across 100 cities.
Launched in 2015, it has become the world’s largest LED distribution programme. At the end of the project the expected annual energy savings will be 105 billion KWh and 20,000 MW reduction of peak load. It would also result in an annual estimated greenhouse gas emission reductions 79 million tonnes of CO2.
Reports show that policies such as government footing 69% of R&D bill for developing indigenous low-cost electric technology is showing results. Around 25,000 EVs have been sold during the last fiscal year. Its benefit is that transitioning to 100% electric vehicles could help save the country up to $300 billion in oil imports and nearly 1 gigatonne of carbon dioxide emissions by 2030.
Tata Motors, the manufacturer of the world’s cheapest car Nano, is planning to hit the market by converting the model into EVs. It will be in competition with Mahindra & Mahindra’s two models that are already on the market.
Anand Mahindra, Group Chairman of India’s top EV maker Mahindra & Mahindra, said this segment will continue to grow even without government subsidies. “This is the single biggest business opportunity for the next couple of decades. Anyone not looking at these opportunities is going to miss out on growth,” he commented.
A McKinsey report said by 2030, nearly 40% of all new cars hitting the country’s roads will be EVs. Their sales have gone up by 35% in recent years. The government’s decision to put one million electric three-wheelers and 10,000 electrically-powered city buses by mid-2019 would incentivise building of recharging stations. Japan’s Suzuki Motor, whose Indian company Maruti Suzuki, is setting up a plant in Gujarat to manufacture EVs.
Suzuki has plans to collaborate with Toshiba to manufacture in India fuel cells and cell modules that will give impetus to government plans to push the hydrogen roadmap. It is in line with India’s plan to commercially make available hydrogen fuel for the transport by 2020. By that time there will be adequate facilities for production, storage and supply chain. Several Indian companies have existing facilities to produce hydrogen as by-product.
In fact the National hydrogen energy road map (NHERM) visualises one million hydrogen-fuelled vehicles, mostly two and three wheelers and 1,000 mw aggregate hydrogen based power generation capacity by 2020.
Those who are still sceptical of India’s targets for EVs and hydrogen fuel cells should re-read Verne.
(Published in February-March, 2018 issue of Tyre Asia)