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Automotive Product Finder Magazine | We must be patient with the transition to electric vehicles
We must be patient with the transition to electric vehicles
Timely stimulus to kick start demand
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The current market conditions are tough for auto industry on account of liquidity crunch and consumer confidence in both urban and rural hinterlands. Despite this, Greaves Cotton Ltd - engineering company that manufactures engines and heavy equipment - witnessed a positive growth momentum nine quarters in a row; thanks to its E-mobility arm (e-scooters and e-rickshaw). Greaves Cotton decision to buy strategic stake in electric two-wheeler (e2W) maker Ampere Vehicles in August 2018 has paid rich dividend to the company. Since acquisition the brand has seen 3 times growth as on year ending March 2019 and around 41 per cent growth in the first quarter (Q1) of 2019 compared to Q1 of 2018, says Nagesh Basavanhalli, Managing Director & CEO, Greaves Cotton Ltd. In this interview with Rakesh Rao, he sheds light on the roadmap for the company’s EV business and deliberates on the future of automotive industry.
How is Greaves Cotton preparing for electric mobility both as an automaker (ie, OEM) and a supplier to electric vehicles (EV) industry?
Ampere Vehicles, by Greaves, is one of the fastest growing e-mobility brands in last mile personal mobility segment. With wide range of energy efficient products in slow speed and high speed backed by comprehensive EV ecosystem support, the Ampere emobility solution brand has widespread accessibility with a strong nationwide footprint today that consists of sales, service, spares and charging points, steadily growing across the country. This reliable portfolio is backed by attractive finance options opening access to millions of buyers to purchase electric vehicles.
Backed by decades of solid understanding of last mile user, superior value proposition of low TCO, reliable, dependable product offering & solid aftermarket support Greaves has made a good beginning in the last mile e-rickshaw segment.
What was the rationale behind buying strategic stake in Ampere Vehicles in August 2018?
As part of its strategic business plan, Greaves has been working with wide range of fuel agnostic powertrain solutions and services. In pursuit of remaining future-relevant Greaves Cotton has collaborated with partners in India and abroad to strengthen its technology blueprint. This acquisition in the emobility domain & subsequent investment in Ampere is part of long-term strategy to deliver cleantech mobility solutions for the last mile. This relationship brings good synergy between technical ingenuity of Ampere Vehicles combined by frugal innovation capability, scale, marketing & management expertise from Greaves. It opens up a very wide base of potential consumer base in mobility segment.
With Ampere acquisition, Greaves inches a step further now in entering the transportation of new personal mobility segment (e2W, a huge emerging segment). This combination of personal and commercial mobility strategically strengthens Greaves as a formidable player in the last mile segment.
What are your plans to ramp up Ampere electric bikes business?
The energy efficient range of vehicles from Ampere have found good acceptance in the electric two wheeler (e2W) range. Since acquisition the brand has seen 3 times growth as on year ending March 2019 & around 41 per cent growth in the first quarter (Q1) of 2019 compared to Q1 of 2018. The slow speed vehicles are used by consumers of different age groups for short commute in the vicinity.
The newly launched Ampere Zeal in the high speed segment comes with host of new age features and widely preferred owing to style, power & performance. Apart from retail users, Zeal has seen good acceptance in bike rental and e-commerce segment. Following this market demand and company’s intent to get closer to the customer, Greaves has now expanded its retail footprint to more than 350 across the length and breadth of country. With adequate capacity to produce, increasing network and riding on good investment on technology, people capability to grow the brand, Greaves Ampere is well poised to accelerate ahead in times to come.
Auto industry has been witnessing sluggish sales in the last few months. Is EV industry also grappling with low sales challenges?
The current market conditions are tough and facing challenges on account of liquidity crunch and consumer confidence in both urban and rural hinterlands. However, riding on plan to offer wide range of fuel agnostic solutions & services, we have created a cleantech portfolio which is driven by consumer’s need of providing eco-friendly & affordable products.
Greaves has achieved a positive growth momentum, nine quarters in a row. Our E-mobility arm (both e-scooters and e-rickshaw) has contributed to this positive growth rate. With increasing awareness, the EV population will increase.
How will reduction of GST rate to 5 per cent propel growth?
GST rate reduction to 5 per cent is an encouraging move for the EV industry and the consumers as it will effectively reduce the cost of owning an electric vehicle. Owning EVs will have become more affordable than ever before. Incentives, tax rate cuts and easy finance options will make the EV proposition lucrative and enable more people at the BOP (bottom of the pyramid) to join the EV bandwagon. This clubbed with low down payment and EMI will further make Ampere electric vehicles more affordable.
Is Indian auto component industry ready to support EV industry?
The EV industry is in its nascent stage and low volumes with respect to conventional 2Ws is a challenge. The government’s FAME II policy, Make in India push, thrust on localisation and GST cut are encouraging the industry to ramp up manufacturing in India. Greaves is confident that the EV industry in India will evolve and become self-sufficient in the near future especially with increasing buyer base.
One of the key to success of EV industry is the development of charging infrastructure. How can the industry and the government solve the challenge of charging infrastructure?
Charging electric vehicles especially the scooters is a convenient activity; it can be charged at ease at home, office, parking areas or shops. Newly launched Ampere Zeal comes with detachable battery option which is light weight, can be lifted & carried easily to the charging point. The EV user can also charge the battery at either of Greaves Retail or Ampere exclusive outlets.
However, considering the scale of mobility in India there needs to be higher contribution from EV players, private companies and Government to create expansive charging infrastructure across India.
Are you also looking at battery (Li ion) manufacturing business?
As of now we will continue to build strong product portfolio for Ampere along with complete ecosystem support of post purchase solutions & services. With new technologies getting developed, there is good headroom for new batteries with long range (distance per charge), higher durability and much affordable price point to be developed. We don’t have direct plan to manufacture batteries.
For sustainable EV growth, would you prefer a forced or market-driven transition?
Let the consumer decide which configuration he wants to buy. Transition to EVs will be a gradual process, we must focus on building a strong infrastructure for the industry. We must look at the history of traditional petrol/diesel vehicle industry; it took more than 70 years for the infrastructure to come to the current level. So we must be patient with the transition to EVs and allow the transition to be a market driven one. Till then both ICE (internal combustion engine) and EV technology will co-exist. To help foster smoother transition, the market should be well aware about all the key aspects of the EV ecosystem – the charging convenience, the EV performance myths, available financing and aftermarket support.
What is your outlook for electric vehicle industry in India?
EV industry is on the rise. With the right kind of co-operation and contribution among the public, private and government, India can become a global leader in the EV segment. Switching to EVs is the need of the hour and consumer is aware of that. Increasing number of users are making that smart move as they know that a cleaner and greener tomorrow warrants electric adoption today. They know that sustainability is the way to go and electric mobility is going to be the key enabler.
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