The Indian commercial vehicle (CV) industry is dominated by traditional manufacturers with decades of isolation driving them to establish low-cost technological products well adapted to Indian environments. Hard pressed environmental concerns, rising energy costs, demand for energy efficient technologies, and the country’s emission norms impel e-mobility transformation an integral part of the Indian CV industry.
Akin to international scenarios the Indian electric vehicle ambition is still driven by conceited political environments, development of reliable subsystem / accessory supplier ecosystems is keen for sustenance. There are a set of policies / reforms under implementation by the current policy makers, more important would be to nurture / implement this drive to make this reality.
Of late, the existing local CV manufacturers had aligned their goals to this ambitious road map but face constraints on availability of low-cost technology to meet this price sensitive markets, inspite of assured government driven financial initiatives. Trailing concerns had led opportunities for Chinese majors, new entrants to set assembly units to supply e-vehicles under “Make in India” scheme.
OPEX model trends, anticipated to be adopted, welcomed by the cash deprived local State Transport Undertakings / municipalities which are lacking budgets for new vehicle purchases. They are set to deploy electric vehicles on select routes / corridors on dry or wet lease model to encourage uptake of electric vehicles, payments are collected and paid on monthly basis thru an e-portal system governed by department of heavy industries. Now at this juncture concerns arises on unswerving transfer of subsidies to manufacturers, immense responsibility on manufacturers to ensure vehicle availability, other operation related tasks performed through the local transporter or by the State transport undertakings.
It is anticipated that there would be an initial surge in demand for Battery Electric Vehicles (BEV) / Applied Electric vehicles / Plug in Hybrid Electric vehicles (PHEV) on account of massive push under FAME-II (Fast Adoption & Manufacturing Of Electric Vehicles)1 subsidiary schemes, however usage can be limited to certain specific applications owing to fears on range anxiety concerns. Its quite imminent the transformation is set to be more focussed on hybrid vehicles, vehicles with lesser polluting alternative fuels like hydrogen, biodiesel, methanol, ethanol, P-series fuels. Whereby OEM’s need to get their gears suited to function on alternative fuels, further key would be evolvement of supplier ecosystem to support these developments in commercial vehicles. Widely the electric / hybrid vehicles drive can impact to a range of 20-30% coverage of the existing CV industry against the nationalist reforms of an ambitious target of 100% electric drive. Witnessing the excessive reformative push can evolve India to a low-cost supply base for components / subsystem to meet out the demands in the developed countries.
Immediate Transition expected to be witnessed in offering pure electric buses as the FAME II Schemes drives to deploy 7,000 buses in various State Transport Undertakings under an OPEX model where OEM’s partnering transporters have to operate on a leasing model and collect their payments and subsidies. Further Strong Hybrid SCV (small commercial vehicles expected to be promoted under the FAME II Scheme, they intend to collect it from DHI (Department of Heavy Industry) thru an e-enabled platform. In this context the vehicles set have a radical change in their structure, subsystem levels & component levels. OEM’s need to ensure appropriate training to their distribution network, availability of parts to have a smooth functioning of this transition. Overall over a period in time we expect there might certain shortfalls which may trigger focus towards alternative fuels usage, hybrids, conversion kits on existing diesel vehicles to meet the overall ambition of reducing the greenhouse gases.
Also to anticipate the evolutions in vehicle body, susperstructure, chassis, other systems to meet out this transition. Steel the most demanded commodity in the automotive industry is set to become less in need further to witness demand for aluminium, fiber bodies, carbon graphite bodies to meet Indian operating conditions. To this extent the maintenance and infrastructure requires to kept available.
To summarise the quicker reference been the Chinese, the US, European markets which well adopted to the e-mobility but still struggling to achieve price parity between diesel and electric vehicles in the price sensitive commercial vehicle sector. Indeed reformative pushes witnessed sale of more electric / hybrid buses, reduction in price parity on Total Cost of Ownership (TCO) as pushed certain demand of light duty e-Trucks. medium duty / heavy duty trucks is anticipated to achieve price parity by 2030 in these countries. More importantly vendor eco-systems, body parts transformation has been achieved to an extent also the operating conditions has been well suited for e-mobility transformation. In India we have major hurdles in term of harsh environmental conditions, lack of vendor support systems, after-sales support systems to handle during the life of the vehicle, charging infrastructure, network to reduce range anxiety fears will pose as major problems for the OEM’s and new entrants in Indian markets. It will be electrifying to see how the disruptive forces will bring in e-mobility a reality in the commercial vehicle sector, Is it the new entrant OEM’s set to gain momentum or the existing traditional OEM’s anticipate, react timely to hold on their market positions.
FAME India Scheme – A quick glance
FAME India Scheme – The FAME India Scheme is an abbreviation for the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India. This is an Indian Government programme first introduced on April 1, 2015, to encourage manufacturers, component suppliers and other stake holders to invest in the manufacture, sale and support of hybrid and electric vehicles. Phase I of the original scheme ran for a period of two years, i.e., April 1, 2015 to March 31, 2017, and then extended to March 2019.
Later in April 1, 2019, the Union Cabinet of India has approved the proposal for the implementation of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) of phase II scheme with a fund allocation of $1.54bn over the period of three years, effect from April 1, 2019 and FAME I closure by March 31, 2019. This would be in line with fortifying the National Electric Mobility Mission Plan 2020 (NEMMP), which aims to achieve electrification of cars, bikes, light commercial vehicles and city buses by 2020.
FAME II plans to support 1 million e-two-wheelers, 500,000 e-three-wheelers, 55,000 four-wheelers and 7,000 buses. The benefits of incentives will also be extended to those vehicles which are fitted with advance battery like a lithium-ion battery and other new technology batteries. The scheme proposes for establishment of charging infrastructure, whereby about 2,700 charging stations will be established in various cities across the country so that there will be availability of at least one charging station in a grid of 3 km x 3 km. Establishment of charging stations are also proposed on major highways connecting major city clusters. On such highways, charging stations will be established on both sides of the road at an interval of about 25 km each.
By Rajesh Khanna, Chief Executive Officer, RACE Innovations Private Ltd.