The grand old man of the Indian car industry strongly argues that India must not rush into EV-car making for a bunch of convincing reasons. Critics may hasten to brush away his comments as mere defence for Maruti Suzuki India coming very late into the EV market in India. But despite this, Bhargava's arguments are worth considering.
First is the issue of battery manufacturing: "I don't think, we fully appreciate, there is no battery manufacturing unit in India," he told me on our show 'Latha & The Leaders'.
"Batteries constitute close to 40% of the cost of an EV. Why is nobody making batteries in India? 40% of the car, that's one part."
Yes early efforts are on, he admitted. But the bulk of the batteries or the cells of the batteries are imported from one country, China. "Now should the car industry get dependent on a very critical 40% part of the car-part on one country? We have just seen the rare earth situation," he thundered.
The second more important reason to desist from rushing into EV is the availability of clean energy, Bhargava said. Even if installed capacity of renewable power is 46% of total installed power capacity in India, the energy consumption picture is different. Mospi data shows that as of FY23, coal was the source for 57.6% of all energy consumed, lignite 1.3% and crude oil 31.1%. Which means only around 10% was accounted for by natural gas and electricity.
"We expect our manufacturing growth to become much higher than what it has been in the last 10 years, which means essentially energy consumption will go proportionately higher because manufacturing means energy. Which means more power consumption."
"If most of us started buying electric cars, and charging it at a point near the house, the grid will collapse because every house will have to get an additional load of seven and a half kilowatt minimum. This is not going to happen," he said. "I think practical consumer problems will limit the growth of EVs plus the problem of dependency on China and the issues of imports. EVs will continue to remain a smaller part."
He argued for more support to use of biogas and ethanol in cars.
"We have hybrids, which at least reduce the fuel consumption by 35%. In today's electric generation situation, hybrids are cleaner than electric cars" said Bhargava plugging in for his company's hybrid cars.
Bhargava's point was policy should promote all the biogas and biofuels. It should promote hybrids. It should promote electric cars, but recognize the limitations of electric cars to bring about clean energy, cleanliness in the environment."
Bhargava chuckled when I suggested that he was saying all this because he missed the EV bus. "EVs are 4% of all cars. What bus is that then? It's not even a scooter" he retorted.
Clearly age hasn't weathered his humour.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
