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Funnycontrol | We didn’t start the fire: An EV/EBITDA ratio of a different kind

Funnycontrol asks Billy Joel if he started the fire, but gets a completely different set of answers.

May 29, 2022 / 05:21 PM IST
Of every 100,000 EVs sold in the US, only 25.1 experience a fire on average. (Representational image: Michael Fousert via Unsplash)

Of every 100,000 EVs sold in the US, only 25.1 experience a fire on average. (Representational image: Michael Fousert via Unsplash)

The automotive segment is on fire these days. Well, at least the automotives are at any rate. A major debate is raging (apart from the fire) on the safety of Internal Combustion Engines (ICE) vs electric vehicles or EVs.

A major publication dug up some key findings on the industry and like a true equity analyst, the Funnycontrol team has provided its own analysis on the same. Our analysis is true, unless it turns out to be false six months on.

ICE fire incidents are more frequent in the United States. Unless you are a Game of Thrones fan, in which case it’s more like a song of ice and fire.

Of every 100,000 EVs sold in the US, only 25.1 experience a fire on average. To which the typical mob in India would go “pfft, we manage to burn more vehicles in our quarterly protest”.

The study also draws parallels between what’s happening now and what happened when CNG vehicles were first introduced. Early on, CNG vehicles caught on fire a lot, especially those that were retrofitted locally with CNG kits.

It is possible many of them caught fire due to the frustration of waiting in long queues for CNG. Like the CNG engine would go: “It is better to go up in flames than to keep burning in this heat. All hail Elon!” and then blow up in spectacular but relatively climate-friendly fashion.

Those CNG fires were considered teething troubles. But that doesn’t mean vehicles bursting into flames can be overlooked. Just like that angry fufaji at Indian weddings. Somebody please give him the gulab jamun first so he does not explode in self-righteous anger.

Bengaluru-based battery charging startup Exponent Energy explained how lithium-ion cells need to hit a temperature of at least a few hundred degree Celsius before having a thermal runaway incident, which is what causes the fires. Most modern batteries automatically switch off when the temperature gets to around 45-55°C. However fights between couples on what temperature the bedroom AC should be kept at start from much lower levels. Thus explaining the term “Split AC”.

Today, most EV makers in India import battery cells and assemble them into battery packs locally—it’s cheaper and easier to do it this way. Which is exactly how Bollywood also comes up with original plot ideas.

But the performance of such imported battery cells tends to vary, due to differences in climate and usage patterns. There is also no method in place to check the quality of battery cells or the level of degradation in life cycles.  Or the deterioration in the script, characters and plot treatment in original Bollywood ideas. But we look forward to the next installment of Krish and the remake of ET with the same excitement.

One of the issues has been the speed at which new models are being rolled out, raising questions if pressure to scale quickly is having a bearing on safety standards.

“Even if 1 in 100,000 vehicles catch fire, it is one life lost,” said Deb Mukherjee, managing director of EV maker Omega Seiki Mobility. And even though EVs have fewer components than ICE models, engineering processes still need a relook, according to Mukherjee, who also worked with Honda earlier. “At Honda, we used to spend five to seven years in vehicle engineering. In the EV space today, you have a vehicle ready in three months.”

To which Sharmaji of Sharmaji ke bete fame went: “Pfft, we had Rajiv ready for IIT in 3 months. He was solving integration problems even before he started walking. But we hope he qualifies for an MS in electronics from Stanford before his milk teeth drop.”

The whole design of an EV has to be done around the battery, and such ground up engineering has been neglected in India. Engineering in general has been neglected in India but engineers are an equally negligent lot. Especially on Tinder.

Vague and contradictory regulations are also an issue. For instance, low-speed electric two-wheelers are categorised as non-motorised vehicles (NMV). Before EVs, this NMV classification applied only to vehicles that were not self-propelled such as bicycles, hand-drawn carts, rickshaws, or rich South Delhi kids.

As such, NMVs were exempt from any need for registration or licences, or even helmets and insurance. Which means they often thought of themselves as VIPs and sometimes would also put a red light on their hood and jumped signals. And if stopped by a cop, they would go “Tu jaanta hai mere bureaucrat kaun hai?”

But the Indian government wanted to incentivise and promote the EV industry. So it extended this NMV classification to low-speed electric two-wheelers, too—i.e., models with motors up to or smaller than 250 Watt and a max speed of 25 kmph. But this only applies to the likes of Yulu bikes, and not the Ola or Okinawa scooters that caught fire.

Which is one reason the government has initiated an enquiry to determine the exact cause of the fires. To which Billy Joel replied with a song “We didn’t start the fire”. And some MPs from the opposition also shouted “neither did we”.

The government will also likely mull several options once this probe is over, including recalling unfit vehicles or even an outright halting sales of faulty models. Arranged marriages, however, continue in India without any such probes.

The fires have thrown up many glaring issues at a time when the Indian EV market is poised to explode in size. Let us hope we don’t all explode instead. Because that would not be good for my mental EV/EBITDA ratio.

Vikram Poddar is an ex-investment banker turned comedian. He tweets @BoredRoomComedy
first published: May 29, 2022 05:16 pm