Moneycontrol
Last Updated : Apr 13, 2020 01:59 PM IST | Source: Moneycontrol.com

This week in Auto: Will COVID-19 dash electric vehicle plans? Bajaj-KTM to make e-mopeds

Extremely slow adaptation coupled with a crippled economic system, EVs will have the toughest time in the coming years in replacing petrol/diesel vehicles

Representative Image
Representative Image

It is now given that the coronavirus or COVID-19 pandemic will become the biggest reason for a prolonged slowdown in automotive demand, not just in India, but across the world. The disruption though has happened in the middle of a critical transition that the automotive world was witnessing; switch over to electric vehicles (EVs).

In today’s wrap we take a look at India’s ambitions of becoming the factory of electric vehicles to the world and where it stands amid the threat called coronavirus. But before that here is a list of all the major automotive news of the week.

Bajaj Auto-KTM combine to make electric mopeds

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Bajaj Auto and its Austrian partner KTM have included mopeds in their multi-product line-up that will be made in India and exported to other markets.

These light-weight mopeds will be powered by low power electric motors, with commercial production expected to begin in 2022 from Bajaj's plant in Pune.

Honda announces Rs 1700cr package

Honda Motorcycle & Scooter India (HMSI), India's second largest two-wheeler maker, has made advance payments of incentives and reimbursements as part of the Rs 1,700 crore package to help its dealers, suppliers and service providers tide over the coronavirus-induced lockdown period.

The maker of models like Activa, Shine and Unicorn joins companies like Maruti Suzuki and Honda Cars India to announce financial support packages for its partners.

PSA pushed back India debut to next year

Groupe PSA, one of Europe's largest carmakers, on March 7 announced it has been forced to reschedule its India debut by at least four months due to the the disruption caused by the coronavirus outbreak.

It was earlier slated to make its India debut in September this year. As a result the debut of its first vehicle for India, the Citroen C5 Aircross SUV, has been now shifted to the January-March quarter of 2021.

Apollo Tyres raises Rs 500 crore through NCDs

Apollo Tyres  said it has raised Rs 500 crore via allotment of non-convertible debentures (NCDs) through private placement. The present issue is for allotment of 5,000 NCDs of face value of Rs 10,00,000 each aggregating to Rs 500 crore, Apollo Tyres said in a regulatory filing.

The date of allotment is April 9, 2020 while the same for maturity is April 9, 2030 and the interest rate is at 8.75 percent per annum, the company said, adding penal interest for delay of payment is pegged at 2 percent per annum.

MG to bring petrol ZS to take on Seltos

SAIC-controlled MG Motor India is exploring a debut in the SUV segment, which is dominated by the Kia Seltos and the Hyundai Creta, with a petrol version of the ZS.

In January, MG Motor had launched its first fully electric vehicle in India called the ZS EV. Now the same model could be used for housing a compact petrol engine to compete in the Rs 9-15 lakh priced SUV category

Will covid-19 deliver a body blow to electric mobility plans?

India does not have any major reserves of Lithium, a critical element required in the manufacturing of battery cells that powers electric or electrified vehicles. Yet Niti Aayog, a premier policy ‘think tank’ of the government is hoping to make India the hub for electric vehicle (EV) and battery manufacturing for the world displacing China.

Senior lawmakers also agree. “We should not miss this bus. Along with ‘Make in India’, we should see that India becomes the manufacturing hub for electric automobile manufacturing,” Nitin Gadkari, union minister of road transport and highways had said at an e-scooter launch event in Delhi.

An Indian delegation led by Dr VK Saraswat, Member (NITI) visited Chile, Argentina and Bolivia to explore opportunities for sourcing of lithium for manufacture of advanced chemistry batteries in India. Discussions were also held with Western Australian Premier on strategic partnerships for sourcing raw materials such as lithium, cobalt and nickel to support battery manufacturing.

As per the think tank India’s EV ambitions, through 100 percent domestic manufacturing of batteries, would require at least 3,500 GWh of batteries at a wholesale cost of $300 billion (Rs 20 lakh crore). At a more realistic level, as per a report, an investment of $5 billion is proposed by Niti Aayog to set up battery factories that would have a capacity of 50GWh.

But really how much of this can be pursued in light of the COVID-19 threat when International Monetary Fund (IMF) said recently that the world faces its worst economic crisis since the Great Depression?

Auto companies not just in India but globally will scale back investments, prune operations and roll back projects to stay afloat in challenging times ahead. Exhausted and financially virus-ravaged world economies will be forced to give priority to nation building above everything else. Will investments in uncharted and untested areas such as EVs be given any importance?

EV technology is capital intensive and constantly evolving while the cost of the EV itself is prohibitively high for mass consumption. Simple-looking hatchbacks or compact sedans do not go beyond claimed 200 km before asking for a four to five hour recharge rendering them impractical for daily use. An EV variant costs twice as much as a petrol-powered version of the same vehicle.

With emission norms mandated to get even tighter in coming years across the globe automakers had to scale up investments in EV technology development to balance out pollutants emitted by petrol/diesel vehicles. But the gestation period for EV acceptability seems longer than thought.

More than a decade after showcasing its most popular electric car Zoe at a European auto show French carmaker Renault’s first city electric car will debut not before 2021 in its home market as per a latest guidance. Even in advanced markets like Europe which boast of superior charging infrastructure than India electric cars have not attracted buyers at an impressive pace.

With an extremely slow adaptation and an even slower launch pace of new models, coupled with a crippled economic system thanks for the coronavirus pandemic electric vehicles will have the toughest time in the coming years in replacing petrol/diesel vehicles.

Can India still manage to go after its dreams of making itself the world factory of electric vehicles?
First Published on Apr 11, 2020 09:07 am
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