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I am Not Convinced Govt’s Current EV Plan Will Work

July 11, 2019 05:05 AM


I am Not Convinced Govt’s Current EV Plan Will Work
Rajiv Bajaj is in the middle of a row with incumbent automakers on one side and startups and the Niti Aayog on the other over whether or not to ban two- and three-wheelers that run on fossil fuels. As much as 99% of the electric vehicle sellers in India are traders, and they are bringing the vehicles from China and creating jobs there, the Bajaj Auto managing director tells Satish John. India tries to do everything overnight and that is why many initiatives don’t work, he says, while urging the government to test EVs in a few cities before adopting a national policy. Edited excerpts:

Are budget proposals enough for established players to take a plunge into EVs and discontinue production of conventional vehicles? It is not the manufacturers that decide. There is a very famous saying by (Honda Motor founder) Soichiro Honda that it is not the manufacturer who shapes the market, it is the customer. The thing is, whether you are an OEM (original equipment manufacturer) or a startup, you can only make the vehicle to the best of your abilities. Ultimately, the customer has to buy it. And that is where the problem starts. Today, electric vehicles constitute less than 1% of the size of the industry and for the life of me, I cannot understand how somebody can imagine that 1% can become 100% in six years' time.

You aren’t per se objecting to EVs? Nobody in SIAM (Society of Indian Automobile Manufacturers) has objected to electric vehicles or to incentives for electric vehicles. We are all for electric vehicles and we are all for supporting and incentivising electric vehicles. At the same time, we are also saying that we are the same industry who are making world-class two-wheelers and three-wheelers. The proof of that is that we are exporting 3 million vehicles every year. These are earning a great name for our country across. These are earning $3 billion of forex.

Assuming that electric vehicles are better — and I'm once again saying that I don't think they are better; they are good and so are IC (internal combustion) engines — even then, why do you ban the other technology? When IndiGo or Jet Airways start, does it mean that you ban Indian Airlines? Just because 4G comes, do you ban 2G? Let the customer decide. This is one principle because of which I don't agree with banning IC engine vehicles.

There is also a practical reason. EV acceptance today is only 1%. And people are bringing them from China — 99% of EV sellers are traders, they are not engineers. They are just traders who are giving jobs to China by bringing the vehicles from there and dumping them in this market.

But after doing all this, if your acceptance is only 1%, then I want to ask the government that do you really want to take this one swallow and make a summer out of it? Because tomorrow, if you force us all to go that way and the customer doesn't accept it, what will happen to the industry? That means the IC engine is stopped, all those people are out of jobs, and electric vehicles are not selling. What are we supposed to do then? Shut shop and sit at home?

Policy wonks are pointing towards China and its successful migration towards EVs…

The Chinese example is being completely misunderstood. In China, they started banning IC-engine twowheelers only in select cities like Shanghai, Beijing, etc. So, China was doing something very selective and targeted. Whereas our people are doing something very general. Also, when they introduced the electric vehicle in China, they proposed a policy called 20-40. This means that the vehicle should not go at more than 20 kmph and the weight should be less than 40 kilograms.

The two big advantages of this rule are that the technology doesn't become a challenge and the acquisition cost remains low.

In India, no such a rule has been proposed. China had a willingness towards a minimalistic approach whereas we seem to have a maximisation approach. The third thing that China did was they built huge infrastructure in terms of road connectivity and made special lanes which were reserved for pedestrians, cyclists and such vehicles which complied with the 20-40 rule. This was to address the safety and congestion issues … You cannot take just one piece of the China puzzle.

We are committed to electric vehicles but because of this 'trial balloon' which has been floated by Niti Aayog, am I going to panic and change the direction of my ship to a new destination? No. Because I am not convinced that it will work.

Startups say it is very difficult for big companies to change overnight and hence they are criticising…

We don't have to prove our credibility to people who have done nothing so far. When the Niti Aayog said that if we don't make such a tough policy, tomorrow the Supreme Court will come down heavily and they will enforce it, my answer to that was that if the Supreme Court is so powerful, then please request them for the sake of all Indians that in five years they make Air India into a Singapore Airlines. We would all be very grateful to finally have a decent airline to fly with.

The reason so many of the initiatives of the government did not work is that they tried to do everything overnight. Same thing they are trying to do here. I would say you take four cities of India which are very polluted like Shanghai or Beijing, and debate what should be done to get 100% electric vehicles there. Instead, you try to make an all-India policy.

Once the government or Niti Aayog decides something, it is very difficult to make them change their mind. Are you hopeful?

I totally disagree because I have seen many U-turns on this issue. Let us not forget, two years back in September 2017, Mr (Nitin) Gadkari himself had made some very ambitious statements which were withdrawn after a few months. In fact, if you ask the general opinion of the business community or even the general public, they will say that the government is full of U-turns and flip flops. And this is true of not just this government, this is true of all governments.


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