Electric vehicles (EVs) are quickly becoming the future of the automotive industry.
While the potential for growth in India is enormous, a tricky market like this is bound to present some unique challenges for EV companies to tackle. The country's large population and growing middle class create a massive potential customer base, but the lack of charging infrastructure and high upfront costs remain significant barriers to entry. However, the Indian government is taking steps to address these issues, with initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which provides incentives for EV and hybrid vehicle adoption by providing financial support and adequate awareness.
As the Indian market continues to grow and evolve, the role of digitalization and battery optimization in the EV industry will become increasingly important. EV companies must continue to innovate and invest in these areas to ensure the safety, performance, and longevity of their products.
The government has laid out its ambitious plans to make India a 100% electric vehicle nation by 2030. While we have come a long way in terms of growth, it’s safe to say that there is much to be desired if we hope to even come close to achieving this goal. This is as crucial a time as any for industry leaders to come together to discuss the challenges and opportunities in this space. Effective collaboration, knowledge sharing, and a fair understanding of where different players are currently at from an innovation perspective can pave the way for increased efficiency, and improved services.
The electric vehicle industry represents an improved lifestyle for humanity, one that achieves a cleaner, more sustainable future. Giving it our all is not only an economic imperative but a moral one.
To gain a deeper understanding of this transformative technology and its impact on our society, Global Talent Exchange recently organized a virtual roundtable discussion as part of our Technology Game Changers Series on “The EV Revolution: Powering India’s Progress”.
The discussion was moderated by Satish Rajkumar- Head of Digitalization (Battery Optimization and Monitoring) & IT at Volvo Energy. As an industry leader with a keen focus on the role of digitalization in driving de-carbonization, Satish is passionate about harnessing the power of technology to shape a better future for all. As a member of Volvo Energy's Executive Leadership Team since its creation in September 2021, he has been instrumental in the company's mission to achieve a fundamental breakthrough in electrification with great people and applicable partnerships.
The panel was made up of 8 like-minded visionaries with invaluable perspectives and expertise that elevated the dialogue to new heights.
While the session was a closed-door one, we wish to build a community that benefits from the widespread knowledge of certain pioneers in tech. Here’s a rundown of what was discussed.
The economic survey of 2023 predicts that India’s domestic EV market will see a 49% CAGR by 2030 with 10 million annual sales, leading to the creation of around 50 million jobs. The industry has gained immense traction of late with advancements in battery technology and a gigantic push for manufacturing. Moreover, investments have increased- both from within the country and outside it.
It’s safe to say that India is well-positioned to transition.
The discussion opened on an interesting and engaging note as Satish Rajkumar set the context for the dialogue ahead.
The chart depicts the 7 spheres of electric vehicles that are of high importance- the elements that shape them and are worth addressing. The first, i.e., batteries, play a crucial role in the space and the industry as a whole must focus on how to further monitor and optimize them. We need to figure out how to better manage and install them for maximum efficiency.
The second is the charging infrastructure- an extremely important element, one that India is still struggling to adequately secure. The moderator mentioned the various e-mob services and drew out the differences between private, public, hybrid, and super charging. Quickly moving to the third, re-manufacturing is a process that is extremely important for both India and the globe. Batteries must be given a second life, and the industry needs to work out ways to reman, refurbish, recycle, and repurpose them. This is what the fourth point talks about as well. This is crucial if we are to ever truly fulfill the goal of a cleaner tomorrow.
Point number five refers to the role of digitalization to accelerate decarbonization, while point six drew out the importance of partnerships between various stakeholders- organizations, startups, academia, government, etc.
Arguably the most important element is the final one- people. Whenever there is a change, people are the center of it all. The mass users must be educated about the benefits of the EV, and talent within the industry must be built up by providing them with adequate learning and skill development opportunities.
A crucial question was then addressed to the panel.
How does each one of them see the electric vehicle industry pan out by 2030, especially according to the 7 blocks mentioned above? What possible opportunities and challenges lie ahead?
A key aspect that was stressed on multiple occasions was the cost of ownership, i.e., TCO. Several panelists felt that the total cost of ownership must be reduced if adoption is to increase. This can be done by also promoting certain financial incentives for owning an EV vehicle, as well as new government policies can be brought to the forefront incentivizing those that go the electric route. 4 aspects of the CTO were drawn out: Talent acquisition cost, charging infrastructure cost, the financing model, and lastly, the government.
The business requirements and climate requirements must be merged as we cannot just focus on one and achieve success in this field. A revolution is needed both at the technology as well as circularity levels. The battery and infrastructure setup has indeed come a long way, but the power must be improved further and the charging time must be brought down- only then is it practical for daily and regular usage.
A panelist discussed his experiences with several charging infrastructure companies and those in charge of boosting this revolution. He mentioned that the consensus was that these organizations are holding back from releasing their model to the public as technology is continuously evolving. As soon as they’re done working on one prototype, a better route emerges. Thus, they are constantly playing catch up. The industry is relatively new and we are in the learning stage where no one has the correct answer; everyone is just trying what works.
Another panelist mentioned his experiences visiting other regions and countries. He put forward the view that even in India, we should soon have specific cities dedicated to innovation, tech ecosystems, OEMs, and supply chain bases from an end-to-end perspective.
Automobiles have always been an integral part of a country’s ecosystem, and while there are a few major players in India, the potential is much more than this. A point drawn out was that at least 50 unicorns in our country are needed in this space to drive the change. Only then can we achieve the 2030 vision for every automobile on the road to be an EV.
Talking about the challenges, a panelist mentioned that the growth of the charging infrastructure is not at the pace that was expected for the stage we are in the electric revolution. There is an isolation of the 2-wheeler EV market, while most 4-wheelers are hydrogen hybrids. The swapping technology has also failed and the policies pose a significant problem as they are currently not recognizing the different verticals but are stringently boxing suppliers under a single rule/policy. Another challenge that was brought up was that the cost of ownership, at present, tends to favor the end users and not those that are in the first half of the cycle due to the high operational costs. The cost is only justified once usage is regular, thus, we see faster rates of adoption amongst people whose careers directly depend on automobiles, for example, fleet owners.
A very important point that was drawn out is that whether electric vehicles in India are actually green, at this point, is highly debatable. The energy requirement is extremely high to create the batteries and the usage is not that much.
A panelist recalled a survey done by the Niti Ayog. It is predicted that by 2030, there shall be a 70% penetration of EVs in commercial vehicles and a 40% penetration in the private sector. This is actually aligned with the growth we are seeing at present. He further mentioned that the EV space must soon merge with the proper industries and verticals as new business models will evolve and be brought to the forefront. Only then will the overall ecosystem improve.
We cannot approach this in the same way that other countries are approaching it. For every such tech or disruption, certain India-specific challenges need to be addressed as the market is highly diverse. User behavior continues to evolve here and it must be understood if adoption is to be accelerated. The problems that we currently anticipate for 2030 might not be prominent till then; new ones might crop up! Another panelist mentioned the need to look beyond technology and focus on the intangible assets that are going into this revolution. It’s important to understand the competition and draw parallels, have good thought leadership, and recognize the patents required.
However, not everyone agreed with all the points mentioned above. One panelist was of the opinion that at the end of the day, the cost does not matter much. Value migration needs to be focused on. Whenever a new product/service enters the market, people search for the value it offers and try to evaluate how their lives can potentially benefit from it. Humans are becoming lazier, and the businesses that recognize this and cater to these needs are likely to be successful. At present, there is no powerful trigger for the value migration to the EV. Nothing stands out, and it is relatively similar to the ICE (Internal combustion engines). We need to find what can be improved, only then will adoption increase; people are likely to invest in more expensive, better EVs rather than cheaper ones that don’t provide value. This is a piece of the puzzle that is left to crack.
The focus was then shifted to the potential for collaboration between industry, government, and academia. How can changes in policy drive adoption? What role do these stakeholders play?
All the panelists believed that a partnership between the three was essential. There should be a good deal of knowledge sharing on the regular; the industry must enlighten the academia by providing details of where they are presently from an innovation standpoint and the academia must also communicate how they continue to evolve the curriculum to keep it relevant and what problems are they working on. Electric vehicles are not just about mobility, they represent continuous learning. The journey from ICE to EV is a transition, and it isn’t going to be an easy one. People need to be made ready for it through adequate upskilling effort, research, and more.
It is through efforts like these that India will reach a point where it is completely self-reliant when it comes to electric vehicles. As of now, 81% of minerals required in a lithium battery are readily available in our country; there is no need to depend on external sources. Moreover, the batteries and engines are no “rocket science”; they’ve been in the works for several years now. What we need to work to improve is the management system.
Overall, the consensus was that the industry and academia partnership has been developing well over the past few years and the government is prioritizing this field too. All we must do is evolve well and pick up the pace.
The conversation then turned toward the last block that was mentioned right at the start- people. There is clearly an urgent need for consumer education and awareness. The panelists were asked for their recommendations on how it can be boosted in the country.
The stakeholders must come to the forefront and make the consumer aware of the total cost of ownership of an EV. Till we can make them valuable for everyone, it should at least be made clear which kinds of people can benefit the most from them.
The panelists felt that the tipping point has been reached for the 2-3 wheelers, but not for the 4-wheelers. Somewhere down the line, the change will only come about when the consumer tries it out for themselves and experience it over time. They will see the ease and comfort it brings to their life, they will tell others, and gradually adoption will increase. Also, the industry must continuously take feedback from the consumers on what elements can be improved and what problems must be solved and work on them religiously.
It was pointed out that there are still many misconceptions and misunderstandings about the capabilities, benefits, and limitations of these vehicles. Consumers are not expected to have all the answers on their own. Dealerships must be provided with adequate training and resources as they are usually the first point of contact with the consumer and can provide them with information about the benefits and features. Workshops, webinars, and online courses funded by the government, or large-scale players in the industry can go a long way as well.
The conversation was then diverted to the interesting aspect of giving batteries a second life and how can customers be given more value if energy storage is utilized correctly. Moreover, the panelists were asked to discuss the TCO interconnection and how it can possibly propel the value chain.
The second-life use of EV batteries is an exciting idea with significant potential to enhance the value proposition of the vehicles along with energy storage. Batteries retain a significant amount of their capacity after they have been useful in an EV, approximately 70%, and thus, must be repurposed and given a new life as this is both the cost-effective solution as well as the most environment-friendly one.
Grid-level energy storage, home energy storage, commercial energy storage, as well as EV charging stations are all potential solutions to this and can help increase the resilience of critical facilities as well as reduce the energy bills at home.
A panelist pointed out that financing risk must be minimized and new incentives should be introduced such as buyback schemes, reduced down payments, and optimized TCOs. Such factors can help drive adoption.
There was also some dialogue about ways to increase the charging network and how hydrogen can play a role. A panelist pointed out that Hydrogen is 0 carbon but it does have some emissions. Even hydrogen hybrid vehicles are facing an infrastructure problem. India can produce adequate hydrogen without relying on other parts of the world, which is why the government is pushing it further, at least for now. It is also a by-product and can be used as power storage too.
The panelists were then asked to elaborate on the role of digitalization. How can it help accelerate decarbonization?
India is the 4th largest producer of passenger car vehicles in the world. For our country, digitalization is the key to unlocking the door to decarbonization. By leveraging digital technologies, we can improve energy efficiency, reduce emissions, and increase the deployment of renewable energy sources.
It can be utilized for the development of smart grids that manage energy storage as well a balance supply and demand. Advanced Energy management systems (EMS) can be developed to manage any inefficiencies and further bring down the consumption of energy and costs. These steps will help bring down the carbon footprint of the country as a whole.
A panelist mentioned that there is an urgent need to focus on cybersecurity risks as well. With increased digitization comes an increased threat to safety and security, so innovative strategies should be used to manage that.
Lastly, there was an interesting discussion on talent. We need people to live and lead the change. Does India have the quality and quantity of talent required for acceleration?
If we were to talk about the traditional internal combustion engines, then talent is in abundance, though it comes at a significantly high price. However, for emerging technologies and niche skill areas, there is a large gap that is noticed. There is a deficit of talent that is knowledgeable and skilled in topics such as cell chemistry and they lack experience. Talent is not enough to realize our 2030 vision, and if we are to move toward that goal then organizations will need to source the best of the best from other regions. A panelist mentioned that from his experience operating in a Tier 2 city, hiring skilled talent is one of the biggest challenges they face; it is nearly impossible.
On the positive side, academia is trying to catch up quickly, but we need an urgent fix to the problem.
Overall, the discussion was enlightening and filled with enthusiasm and vigor.
This closed-door conference was the 9th in our Technology Game Changers Series and we are gearing up for the next. Stay tuned!