Retrofitting of electric vehicles is a viable solution to shift to electric mobility but that needs careful customisation, instead of being sold as off-the-shelf products.
Last-mile mobility in India has witnessed a massive shift towards electric vehicles in the last decade. With the rising demands for doorstep delivery during the Covid-19 pandemic and the substantially reduced operational cost for EVs have played a crucial role in the growth of electric mobility as well as last-mile mobility. Electric three-wheelers have been dominating this space since the beginning. The recent growth in demand has further fuelled the sales of electric three-wheelers along with the two-wheelers as well. This momentum is expected to continue further. Explains Deb Mukherji, Managing Director of Omega Seiki Mobility in interaction with Team Autofintechs.
Edited excerpts below.
Q. Last-mile transportation has been witnessing a rise in electric vehicle penetration with a large number of electric three-wheelers joining the fleet. Is it not increasing the congestion on roads and creating a new set of problems while offsetting the vehicular pollution?
Last-mile transportation is driven largely by e-commerce companies. During the lockdown, we saw a surge as people sitting at home were ordering everything from food to fashion. Post lockdown also the growth trend has continued. The penetration of e-commerce in the Indian retail market is less than 5% even today. So I don’t think the last mile has created congestion on roads. We can have data to check how many traffic snarls are created by last-mile delivery vehicles and I don’t think it would be anything.
The second part of the argument is if electric vehicles were not there the last mile would be done by IC vehicles creating more pollution and emission issues. And lastly, if e-commerce last mile is taken out of the equation then you will have people travelling to markets, malls in their cars, or scooters and increasing traffic congestion as well as pollution.
Retrofitting kit for electric vehicles needs to be sold as customised for specific vehicles and not as generic off-the-shelf product.
So I think e-commerce helps both ways, reducing individual travel as well as bulk transportation of goods to the end-user. Take the example of grocery delivery. Ecommerce can deliver one month’s groceries in a day rather than you rushing to market every 3rd day. So in order to support the e-commerce industry, the electric vehicle is the only answer for the last mile. I agree e-commerce companies need to work out efficient and economical delivery models comprising of optimised load runs, cost per Kg per Km etc.
2. A large number of electric three-wheelers in India run on lead-acid batteries. Do you think this is not serving the true purpose of mitigating vehicular pollution?
Yes, I completely agree. there are two issues with the low-end three-wheelers both passenger and cargo vehicles. One of these runs on low-end lead-acid batteries which are polluting, need refills, have low life with no end-of-life treatment and the second ones are made in China cheap low-quality vehicles. Both problems are interlinked.
Lead-acid batteries need to be banned as they don’t meet the aim of reducing environmental pollution as well as pose health hazards.
To reduce cost, the makers use lead-acid batteries. These need to be banned as it does not meet the aim of reducing environmental pollution as well as pose health hazards. We need to have high-quality vehicles with contemporary battery technologies eg Li-Ion, Zinc Air etc. Once you have a good technology solution then only the environmental pollution problem can be solved and not by these cheap low-end measures.
Q. Do you think the approach of e-mobility penetration should be transforming the existing fleet into electric rather than selling new electric vehicles?
It should be a combination, you can’t have one size fit all solution. Retrofitting has its challenges- you need to assess the vehicle quality, condition then the retrofitting kit needs to have proper quality and technology. Retrofitting kit needs to be customised for vehicles and not a generic off-the-shelf product. It needs to be an engineered product. Once these technical issues are solved converting the existing fleet into electric will make sense. On other hand, a new electric vehicle with proper technology and quality is a ready solution.
Q. Are the current set of incentives and assistive government policies comprehensive enough to aid a holistic growth of electric mobility in India?
Govt. has come out with incentives on the supply side as well as the demand side. On the supply side, we have FAME-II for OEMs along with some state-level subsidies. Then there is a PLI scheme of batteries and auto components. On the demand side, there are tax benefits on electric vehicle loans, depreciation benefits etc. I think the PLI needs to have wider coverage and must include MSMEs who form the bulk of the automotive industry. They play a major role in the auto ecosystem. For electric vehicles, MSMEs clusters need to be encouraged.
Govt needs to provide cheaper credit to this large segment of the industry. On FAME2 there needs to be a refinement to make it easier to utilise. At present, it takes anything from 3-6 months for the credit to happen. And lastly, we need Govt intervention in banks financing electric vehicles. Banks need to come forward to finance electric vehicles. They can have criteria on vehicle quality, life, buy back etc.
5. Do you see a saturation point in the near future for the electric three-wheelers in India? What’s your take on the growth prospect?
Three-wheelers will rapidly transit to electric vehicles. I see the passenger segment is almost 50% already converting. Interestingly this is a new segment of L3, low price vehicle, with less than 1 lac cost. This is where OEMs need to come up with innovative products and capture this market which is dominated by low-end Chinese imports. Mainstream OEMs are still not in the fray and we have a 50% conversion, this is huge.
I see the three-wheeler segment at around 80% electric by 2030. Rest 20% would be CNG. I also see new companies coming up with better three-wheelers. Three-wheelers nothing has changed in the last 50 years in terms of vehicle design, safety, comfort etc. It’s time this segment is given a make-over with a high-quality design.
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