And The winner is….

Crystal gazing of EV scenario in India!

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InternetGenie

Pramod somehow managed to make Internet Genie run at the high speed that was expected of him. Genie as usual started narrating a story. He started with a question, “I want your frank opinion about Indian Electric Vehicle scenario, your favourite subject.” Pramod knew that if he uttered a word, Genie would slip out of his control and system will hang! So Pramod did not give any reply to the question asked.

As usual Genie kept on talking. Pramod,  only a few months back, there was not much clarity about EV’s in India, but you had once said that Indian EV scenario depended mostly upon the international companies who have a large market share in car segment in India. Their current share must be around 75%. Mahindra had their foray in EV since some years back but have hardly got much traction. But suddenly the scenario has changed. It appears that many people have been working on EV’s, secretly. Last month Tata Motors grabbed an order of 10000 EV’s from a Government department for supply within one year. Pramod, this was a surprise for all! There is a story in today’s papers that Tata has invested US$ 900 million in Tesla Competitor, “Faraday Future.” This could be the secret of Tata getting ready for mass production, with “Tiago Electric?”! This indicates that both Indian companies Mahindra and Tata are well ahead of the pack for the Indian operations as their EV’s have reached production level.

What will be the situation in 2022, Pramod, five years from now? I know that Suzuki and Toyota have come together in India. Suzuki will produce EV’s for themselves as well as for Toyota, in India. Technology for EV will be provided by Toyota. These two have already joined hands with Denso, a Toyota group company, for manufacturing batteries, in Gujarat. So, this group will be the first to have their own batteries in Indian market! This will give them cost advantage. They are talking of their EV being available in India from 2020.

Honda is talking of EV in India by 2019! Hyundai has not said much but I am sure they will be around the corner! Nissan Renault is quite ahead in the global market for EV’s; if they decide to come to India, they have the wherewithal. But main India strategy has to be pricing as usual, quality must be good anyway! That is where Suzuki and Hyundai will have advantage over others as they are successfully doing this for so many years. But Pramod, don’t forget that Tata has reached mass production level already in 2017! So, they will have advantage over others!

Pramod there is breaking news below! 

https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/pm-narendra-modi-to-unveil-fleet-of-400-tata-nano-electric-for-a-cab-aggregator/61754665

NanoElectric

Pramod, I saw just now in Economic Times that PM Modi will inaugurate a fleet of 400 EV Nanos for OLA, in Delhi on 28th November! Looks like Tata Motors have hired Usain Bolt to learn how to make a clean start against all competitors!

There is not much clarity in heavy vehicles and buses. Goldstone Infratech from Hyderabad appears to have reached mass production stage as they have orders from Himachal Pradesh transport for 25 buses, the buses have already started plying; they also have orders from BEST, Mumbai for ten buses. In Mumbai, buses will run 220 km per charge and in Himachal hilly area the buses will run 110 km per charge. It is too early to predict more  as none of the others have said anything.

GoldstoneBus

Pramod, what about infrastructure for charging? Well, Suzuki-Toyota combine have said that they will invest heavily in this area too. Government of India is also going to invest heavily in infrastructure. Oil companies, Indian Oil/BPCL et al have said that they will jointly put up the battery plants and invest heavily in charging infrastructure! They already have petrol pumps all over India along the roads! Things look reasonably good in infra area ! Now Pramod, I want you to stand on the stage and call the winner by saying, “And the winner is…”

Pramod, I want your reply on this as I know that you have strong views!! Pramod just could not keep quiet. He said, “Under Indian conditions, Tata Motors turned about to be the dark horse! Mahindra has been around for some time. But Suzuki Toyota could be the force the to recon with!  “

With this statement Pramod broke the golden rule of silence that Genie had locked him in.  At that instant Genie slipped out of Pramod’s grasp, Genie’s speed became equivalent of 2 G and system hung!  Genie could not help but make a passing remark before escaping. ” Pramod, don’t forget Hyundai!”

 

 

Auto Industry 2040?

Auto Industry Circa 2040. where will it be?

WOW! MMG! DISCO! These could be names of some of the leading auto component industries in the year 2040! Why have I selected the year 2040? Simply because everyone is talking of this year for introduction of electric cars in a big way; from this year onwards, the real downward trend in manufacture and use of IC engines in the cars, as we know them today, will begin. I am simply assuming that the cars will be available, similar to the cars of today. Masses of cars will be driven by humans, they will have a steering wheel and a power plant/train to give them. They will have some form of braking, electrical system handling various functions, wheels and body with fuel storage area, air conditioning and so on! Things inside could be fancier with more and more entertainment, superior navigation abilities, drivers may become more stress free as cars systems will be able to understand many things and may take over some functions from humans. Internet of things (IOT) will allow things that are not even thought of today.

This is part of evolution of human race but this could be culmination of major change that is taking place currently. The “new” car industry is putting its toddler’s steps today. Evolution is nature as everything in this world is always evolving! Basic driver for these changes is computers and computer chips. The car industry will be using different chips and will capture lots of data data generated by various systems. This data will be in endless loop and will allow cars to function more and more efficiently.

What will be the difference in the cars of today and those in 2040? Today’s power plant, the Engine & Drive train will be replaced by Batteries and Motors. Today’s drive train, gear boxes etc will be just be not there. The exhaust system as is known today will be simply not be needed because there will be no IC engine, both Petrol and Diesel. Gear box and the whole system is really not needed because their function can easily be handled by Electric Motors. Even today, in electric cars, there is a single gear which reduces the RPM to what is needed to drive the car at allowed speeds!

There are many companies that are manufacturing the components that are discussed above. These components may become redundant over a period of time due to introduction of electric cars. Bosch, Denso, Continental, Valeo, Aisin Seiki are some of the major players that manufacture the cluster of these components. These companies together manufacture products worth US $200/ billions every year.  These products may comprise of 40% to 70% of their current turnover. The giants must be already studying the questions that have come to my mind. How are they handling these questions? I am sure it’s a tough call to all of them though they have the where withal and deep pockets to handle difficult situations. Some have started making navigation products, some are making parking assist, camera -related systems. But suddenly new names are being heard in these discussions as vendors. CISCO, NVIDIA are some of them. Some are direct vendors to car makers and some are vendors to components manufacturers.  Where is the real scope for new development and business? Battery packs, battery charging technology to increase per charge distance that the cars can travel today! All other developments that are computer related can also happen in IC engine cars too! TESLA is already building a giga factory for their Battery Packs! So will the “new” component business be taken over by Car Manufacturers? Suzuki, Toyota and Toshiba are coming together in India for big battery plant! What happens to smaller manufacturers of these components? Will they survive the major change? Will “WOW! MMG! DISCO!” replace them? Only time can tell.

In car making, after a long time, new name TESLA, started coming into prominence. TESLA came mainly for the new product offering. It appears that technology like fashion goes round! Till first two decades of last century, IC engine based transportation was not very popular. Trains used steam, cars used electric power plants; but battery technology could not catch with the then needs. Hence IC engine cars and trains became popular. From the existing car manufacturers, some are already manufacturing electric cars more than what TESLA is producing. On top of that they have a running profitable business producing IC engine cars. But one thing is for sure they have the humility and know where they lack. Look at what Volkswagen Brand CEO Deiss has to say about TESLA! 

VOLKSWAGEN brand CEO Diess has said that VW which manufactured 5,987,800 cars last year has to catch up with Tesla which produced 83922 cars last year. “Tesla belongs among the competitors which has abilities that we currently do not have,” Diess said in the interview with “Inside”, a publication for VW employees. Around half of Tesla’s engineers are software experts, while at VW’s core brand it is a much lower proportion, Diess said. Tesla has good electric motors, a fast charging network, autonomous driving technology, internet connectivity, and a new approach toward vehicle distribution. “This shows that we need to significantly improve. We can do this. We measure ourselves against Tesla quite deliberately. Our goal: Using our abilities not just to catch up, but even to overtake,” Diess drives an electric VW Golf.

 Current giants have ready infrastructure and eco system to make and sell millions of cars. They of course lack Electric car eco system as mentioned by Diess above. Their main struggle will be recharging stations for electric cars; but TESLA is also going face the same problem! The question arises if TESLA, a loss making company, a start-up, survive? Let’s look at the startups from the Silicon Valley and the west coast, who really made it big in computer industry sunrise era. Google, Facebook, Microsoft, Apple they all became very big with the products/services that never existed before. TESLA is pitted against the giants for making existing products where the main “driver” is only a different technology! That’s a huge disadvantage. Fighting against giants, who have woken up a bit late, like Mercedes, Honda BMW, Toyota, GM, Ford, Fiat, Hyundai is going to be very very tough for TESLA! Some of these giants are also going to suffer or may merge! My take,Continental TESLA may cease to exist  by 2040 or even earlier as it is known today! Takeover? Maybe!