EV’s! The Eco System Disruptions!

Are we prepared for major disruptions in many Eco System due to advent of EV’s?

Advertisements

Below is an article which informs us about governments seriousness regarding introduction of EV’s in India. It is hoped that at least 30% of all new new vehicles by 2030 will be EV’s. Last year, government ordered 10000 EV’s and there is a plan to order the same quantity this year too! Government is also encouraging bus fleets to buy Electric buses. Himachal Pradesh has ordered 25 such buses and are being run in hilly areas. I saw a few of them plying, during my recent holiday in Manali.

http://www.downtoearth.org.in/news/centre-launches-national-e-mobility-programme-10-000-more-e-vehicles-to-be-procured-59845

What EV’s are going to do to various Eco Systems? When we discuss EV’s, discussion is about pollution, how long petroleum products will last etc. There is also a discussion about petroleum cartel holding human race to ransom. But there are many more disruptions that need to be considered. These are not only for individuals but for various agencies like government, businesses and many other systems. These need to adapt, change and modify to suit new environment created by the EV’s.

Take the case of governments tax collection. Tax collected on petroleum products are so huge that these are almost 100% of the price of the petroleum products. At every stage tax is collected. From refining, to distribution to sell. Both central and state governments will start losing this revenue when critical mass of new EV’s is reached. 2030 as indicated in the above mentioned article, may be that year. Government needs to find methods to make up for this revenue loss. Not all revenue will be lost but there will be a loss of big chunk. Another issue is the “fuel” that will replace petroleum products will be electricity which traditionally is being manufactured in Public sector. This fuel cannot be taxed very heavily,  as its usage will be multi-purpose, vehicles, industrial and domestic usage.

Another major change that has to happen is the growth in production of electricity. If this continues to happen using petroleum products, then pollution will come out of chimneys instead of car exhaust systems. Main thrust appears to be on solar systems but they will also have their own issues which need to be tackled in parallel with increase in production. Another method that is being undertaken is nuclear power. This will also help the ecosystem to achieve the same goals.

Why would people switch over to EV’s? In case of buses, since it is a public transport this can happen faster if funds are made available. These organizations are anyway public sector. Of course, cost of the vehicles needs to come down. From present knowledge, it appears that maintenance cost will be lower. With decrease in Electricity price, battery replacement costs may also become quite manageable over a period of time, due to mass production.

But the real numbers will be coming in cars. Why will people change over to EV’s, the cars? Cost of ownership is the going to be the answer. This is made up of Price of the Vehicle, Cost of servicing, cost of repairs, resale value and ease of use. To me the last factor is also very important though it is not a tangible factor. All other factors have been there in IC engine cars too! But this is a new factor that has come up. We are all used to just using the key to go where ever we want; if required, we go to the petrol pumps and fill it up! With EV’s it may not be as simple, to start with. We need to plan, we need to have cars that will give more mileage per charge. The current charging technology available takes about 30 to 40 minutes minimum, to fully recharge. How fast this technology will improve? Will the charging time reduce to 5 minutes or some such time? Only time can tell. This brings us to charging stations, which is going to be a factor by itself!

EV’s will need charging stations, bus operations will have their own stations. But cars will need a huge number of charging stations. In India, we should not forget two Wheelers. Two-wheeler companies are also thinking big in terms EV’s and those numbers could be large. First and foremost is going to be the charging time! Unless this reduces drastically, number of charging stations needed will be a big challenge! So, to me this improvement to around 5 minutes or less is almost mandatory! I am sure the improvement in battery technology will increase the capacity of batteries which in turn will increase per charge running of vehicles. Who should invest in charging stations? Who will invest in charging station? Current Oil companies can take up onus of this, being public sector companies. Chicken and egg situation will prevail in initial phase. Charging stations first or EV’s first will be the dilemma! ROI on charging stations will be tricky and priorities is going to be an issue. Till IC engine vehicles are manufactured, they will keep on having the pressure of exhaust pollution control. By 2030, something equivalent of Euro 8 or 9 standards will be prevalent.  Car companies and Oil companies both will have to invest a lot on pollution control during this phase, along with investments in EV’s. This is tricky because nobody can predict the speed at which proliferation of EV’s will take place. Lest we forget, EV’s are Zero pollution vehicles!

About charging stations, will the government agencies build them or private agencies build them? Private companies have an option of not building them. There will be  individuals who may have proper parking space in office or at their home. They will build their own station but that number is going to be small, at least to start with. But looking at vehicles parked on roads even at night in cities, common charging stations, like petrol pumps, looks to be the only way. Can there be a “Charging Station Cess” on all new vehicles sold? Will it be acceptable to burden IC’s engine car buyers to benefit EV buyers? Can local governments take part in this, in cities where EV’s will be sold in large numbers? When will they know the trend? When will they decide to do it? All these questions do not have easy answers, but these issues need to be resolved.

The drive train in IC engine cars, starting from Radiator and ending with Exhaust pipe, will be replaced by about 18 parts, maximum. Out of these, the motors and gear are the only so called moving parts! When there are less moving parts, there will be less repairs needed! In fact, Tesla is offering life-long warranty for their cars. So, the car service industry will be the first victim of EV introduction. Today major chunk of repairs after warranty period is over, are the drive train parts. When these repairs are simply not needed, will the service industry be viable at all? Will manufacturers offer the paid service life long, through owned outlets. This is already happening in spare parts business, where component manufacturers find it difficult to compete with the vehicle manufacturers.

Another major disruption will be component industry and their basic vendors like casting, forging industries and their allied industry. These industries today, employ millions of people. Since there will a major disruption in this eco system, things are going to be tough. If a certain business simply ceases to exist, what do you do in life? Not everyone plans 10/15 years in advance. By the time they realize this, it could be too late! This group of business men will have business knowledge but may not have where withal to completely switch over to something new! How many will be smart enough to change to a totally new and/or unconnected business?

Friends, I have seen my city Pune change from use of carriage pulled by horses (called tanga), to auto rikshas, to Ubers and Olas. Tangas simply don’t exist now! I have observed that riksha business will also taper off over a period of time. Riksha is not an elegant mode of transport and it appears that young generation does not want to come in this business, as it is NOT COOL! The advent of Metros in the city in next three years will push Rikshas and even Uber/Ola! I will definitely use a Metro, if possible! When I talked of major disruptions, I was talking of obsolescence too! History has been harsh, and there is no replacement or option for obsolescence. If a system has to go, it has to go whether it likes it or not! It is like death, one has to accept it. Welcome to the brave new world of EV’s.

Pollution! Nobody’s Baby!

Recently all of us have heard of pollution issues that are literally choking Delhi and probably this is only the beginning. As usual we go about the issues as if it is Government problem and has nothing to do with us. There are a couple of things that need to be considered. Nobody could have predicted that India will manufacture 3 million four wheelers per year and one million plus two wheelers per month by 2015. Increased car ownership can be considered as effect of liberalization. This improved the economy  at a rapid pace, at the same time growth of IT sector started. Combined effect of these two factors led increase in aspirations of fast growing middle class. But growth of two wheelers is purely because of poor infrastructure of roads and public transport in our cities. A society is considered developed if middle class and upper middle class people in that society travel by public transport.

Consider any city in India. Except for Mumbai, where does public transport carry large number of people daily. What is their other option? People have to move like Sardines packed in the “Local” trains. Ask any Mumbaikar about Metro and he will agree that ALL trains in Mumbai should be like Metros! Why Rs.90000/ crores planned for Shinkansen cannot be used to Mumbai “local” train quality improvement? (I am aware that its a special deal) Millions of Mumbaikars will bless the Government if this is done. What are our governments priorities? What are our society’s priorities? What do we want to achieve? Do we want to become a four/two wheeler dependent society? Do we have the discipline to become individually owned vehicle based society? Are we at all striving to become an advanced nation?

What is really adding to pollution? I am comparing data in general and not for any specific category. During discussions on pollution, we talk only of vehicles like cars, trucks, buses et al but there are other factors too. I am discussing Delhi issues because it has become first city in India to have really suffered. Factors contributing to pollution in Delhi are

  1. Winter/Weather
    1. Winter causes stagnation of cold weather near the earth’s surface  ie inversion due to cool air. This is not new to Delhi and has been an old phenomena
    2. Air flow patterns from Afghanistan and Pakistan, pick up from Haryana and Punjab, smoke created by farmers burning the straw in the fields.
    3. Delhi generates 10000 tons municipal solid waste per day. This is burnt every day.
    4. Pre monsoon dust storm also add to this issue
  2. Industry
    1. Delhi has massive construction projects going on; these add to pollution
    2. There are many industries in Delhi
  3. Power generation plants
    1. Badarpur power plants are 30 to 40 year old. Plants use very poor coal quality and have very old design equipments with almost zero automation. This cause high pollution as well as cost.
  4. Vehicles all types
    • Delhi has 7.5 million vehicles on its roads. Many of them older than 15 years.
    • By sheer volume, we miss out that two wheelers also have equal share in pollution because they are 70% of total vehicle population.
    • Government policies have kept diesel cheaper than CNG for most of the period thereby discouraging the use of CNG
    • Diesel buses which carry 50/60 passengers are taxed more than diesel cars.
    • Large number of trucks going to other destinations  just pass through Delhi though they have no business to be in Delhi.
  5. Dust cleaning from roads
    1. In India road cleaning is done every day using “Zaru”, a broom. With this method maybe 50% of the dust that should have been collected goes into air adding to pollution.
    2. It is seasonal but Diwali fire crackers add to pollution
  6. Delhi has a typical mix of Government authority where Delhi is a state Government but has a very large number Central Government establishments. This causes the clash of authorities so taking decision can be tricky for both!
  7. It is Supreme Court that has been pushing the Government. Supreme Court has now taken actions which best can be described as knee jerk. What is going to happen by not allowing to register say 15000 large diesel SUV/C class vehicles?
  8. Delhi citizens almost pay no money for parking their vehicles on public roads. This leads to indiscriminate buying of vehicles. In cities like New York 30 years back people had pay US$ 300/ per month to park their cars in apartment complexes.
  9. Besides this Governments policies play a major role in vehicle pollution issues. Following two tables show the Indian standards and European Standards for pollution norms.
  10. EuroNorms
  11. BharatNorms
  12. When the policies were declared by European Union, which were then followed by Indian Government, the EU wanted to reach Euro VI standard by September 2014. Whereas Indian goal was equivalent of Euro V by 2017! This is where the real issues start. Pre liberalization there used be Hindu Growth rate of 2.5% per year in India. Probably as we believe in Karma, we are in no hurry to change things. When this rate grew to between 6 & 8%, pollution also started galloping. We just forgot to change our targets  for pollution control which probably would have been ok for Hindu Growth rate! .
    1. Even on decided targets there is a major failure in implementation.
    2. Currently for fuel supplies, Northern India and large cities in other parts of India get BS IV for petrol & diesel. Rest of the country is expected to be BS IV in Jan 2016, BS by Jan 2020 and BS VI by 2023!!  Unconfirmed report says that industry will struggle to meet even BS IV norms by 2017.
    3. Vehicle industry says it will struggle to make BS V by 2020 and  BS VI by 2024!
    4. This proves one thing we are very adept at selecting appropriate names. EURO norms name is converted to BS. I need not elaborate the meaning of “BS”.
  13. Large Industries have money to open new factories but they do not have money to improve their Vehicles for better norms. Our Government owned fuel companies have thousands of crores to spend on marketing and opening new pumps. But they do not have money to improve refineries to make improved quality fuels.
  14. Why Government cannot give stringent targets to Automobile manufacturers and Fuel companies for going straight to Euro VI or Bharat VI norms? All these groups make noise but if they are forced they will do it. It is about putting correct priorities! Is it about the lack of political will? Is it about the clout of these big companies? Is it plain bribery? Why can’t Government push Public sector companies?
  15. Governments work on these issues only when the Supreme Court pushes them, otherwise everything is seems to be hunky dory.
  16. In olden days also I remember very foggy weather in Delhi in winters. Practice of cleaning roads with “Zaru” is an age old practice. Supreme court has already forced Smog caused by burning of straws in fields in Haryana and Punjab is also a very old practice. The factors mentioned were causing problems even in those days but word pollution was not in fashion.
  17. When nations proceeded rapidly towards industrialization they adopt new technologies, new ways of doing things. I am sure people must have been defecating in open in most countries in olden days. But this changed drastically. But in India in spite of Government trying very hard by making laws like “having toilets in home” as a pre-qualification for standing for local elections, people build the toilets but still defecate outside! Oh, we like it that way!! You will hardly see anyone spitting in developed countries. Mind you tobacco chewing was rampant in these countries too!
  18. Unless Governments, Industries, Fuel Companies, People all make concentrated efforts jointly and simultaneously problems of pollution will just remain that, Problems of Pollution, irrespective of whether we have authorities like National Green Tribunal (NGT)

In conclusion, we can say that following factors are causing pollution in Delhi.

  • Large number of vehicles and incorrect policy on diesel
  • Government apathy on regulations
  • Atmospheric conditions in winter
  • Auto makers & Oil industry taking advantage (gain what?) of lack of political will of Governments
  • Age old practices not being changed, road cleaning by “Zaru” & straw burning in farms
  • General apathy of public in not forcing  Government to pass strong laws. Yesterday’s example of passing of “Juvenile Justice Bill”. Public pressure forced law makers to pass this bill in the parliament.