There is little doubt that hybrid and electric cars are the future of mobility. India needs to rationalise its policy to ensure that it isn’t a laggard
Across the western world there is a very interesting phenomenon; when you visit a major mall chances are that the most crowded shop is not the local Zara or H&M store but the Tesla Motors outlet. The electric performance cars built by Tesla Motors owned by the seemingly eccentric South Africa-born Elon Musk are a rage across the world. While they haven’t really set the sales charts on fire due to their fantabulous sticker price, they have proven that electric cars are no slouches and do not have to be stodgy range-limited products.
And it isn’t just Tesla, even the supercar makers of the world inspired by the likes to the Formula E racing series and the incredible modern Formula 1 hybrid engines have produced cars such as the Ferrari la Ferrari, Porsche 918 Spyder and Mclaren P1 which use small internal combustion engines coupled with large banks of batteries to blast you into hyperspace. Most global manufacturers now offer a huge range of hybrid and electric models. Cities are experimenting with electric car-sharing services and sparing hybrid cars from congestion charges. As batteries and energy regeneration systems have become more efficient, the fuel economy gains of hybrid cars are tremendous. And all-electric cars coupled with ‘supercharging’ stations and increased renewable energy usage are more environmentally friendly than ever before.
Then we have India, the world’s third-largest car-market (fourth largest if one considers Western Europe as a single market) where electric and hybrid cars have barely made a dent. While it is true that the Government of India has a scheme called the FAME scheme — Faster Adoption of Manufacturing of Hybrid and Electric vehicles in India — it has barely encouraged the sector. An automotive taskforce set-up by the government and carmakers unravelled when Maruti-Suzuki pulled out. While Mahindra has taken some big steps on the electric front and even participate in the strangely silent Formula E championships, hybrid technology which is seen by most as the first step has not really seen adoption in India.
While it is true that both Honda and Toyota sell their executive sedans the Accord and Camry respectively as hybrids, these are just a drop in the ocean when it comes to sales. Because the FAME scheme is meant to encourage ‘local’ manufacturing, it has failed to seed the market. Both the Japanese carmakers who produce hybrid cars are for the large part importing the technology and drivetrain from abroad and even if assembly of the body happens in India this means that the subsidies offered by the government for these state-of-the-art cars is minimal.
Ronald Folger, the Managing Director of Mercedes-Benz India told me this week that customers are not ‘green’ and they look at hybrids if they make economic sense. “Government’s should look at subsidising hybrids at the start even if they are imported because that is what will change habits initially”, he explained. In fact, he wants the government of India to explore subsidising imported hybrids initially, “this will seed the market and eventually spread to smaller, cheaper cars and then hybrid technology will have to manufactured in India for volume reasons.”
India sees itself as a global production hub for small cars, but if India cannot get her act together when it comes to hybrid and electric cars then there are going to be problems going forward for the ‘Make In India’ plans of this government. Sometimes, the technology has to be imported initially to really seed the market. The FAME policy needs reworking to encourage consumers to drive the more fuel-efficient cars and build the market up. In an age of global warming and with the need to reduce carbon consumption, let us not think with blinkers on.