Former M&M MD Pawan Goenka fights for temporary tariff cut, Auto News, ET Auto
Q. How do you see the future of mobility in India shifting from the current mode of transportation to electric vehicles, drones, hyperloops, AirPods, etc. ?
It depends on the period or the time horizon you are talking about. I don’t think hyperloops, drones, etc. will occur in the next 10 years as a means of transport.
Right now, a lot of local development is happening on all of them. For example, IIT Madras developed a hyper loop experience and they also did an air taxi. Many other types of ITI-level research are currently underway.
But I don’t think the industry has gone into any other mode of transportation to make or move things from point A to point B. Such things are only on the camera, in photographs, but not in the real world.
What will happen in the medium term within 10 years is electrification. I think no one should doubt that now. Electric vehicles (EVs) will happen with the kind of support the government has and the kind of money they spend on it, it is bound to happen.
Three-wheelers will be the number one segment that will lead electrification, followed by two-wheelers in second place. Electric buses will be the third and the fourth will be passenger cars. This is how the transformation will happen.
I don’t think hyperloop, drones as a means of transportation will happen in the next 10 yearsPawan goenka
Q. Do you think the adoption of electric cars in shared mobility will be higher?
For electric vehicles, the more you drive, the more you save. It will therefore be an ideal solution for aggregators who will travel 100 to 150 km per day. Private owners can run up to 30, 40 or 50 km per day. Their fixed costs are higher and their variable costs are lower. The more you run, the more you save. Q. Why do you think the big Indian automakers do not seem very enthusiastic in the field of electric vehicles?
I would put it this way (they probably think) that I have a combination of good deals going on right now. And let’s continue with this business without much investment and also practical electric vehicles have been very slow in India. This is the combination that I see today.
Q. How optimistic are you about electric vehicles now? It’s been about a decade since you last talked about EVs when Riva arrived, but despite that Mahindra & Mahindra aren’t able to contribute much to EVs, rather Tata Motors took over. .
I don’t want to comment on any particular company now. I’ve been very optimistic about EVs and for the last five or six years I’ve been saying this about EVs, right? It didn’t happen, but now you can clearly seeâ¦ how serious the industry is. The seriousness of the government appeared when the FAME program was initially announced, although FAME-I was not very successful.
But FAME II has been very successful. Then came the GST and now the PLI scheme. Yes, this government did everything it needed to do and the industry was innovative.
But now I think even the manufacturers who don’t talk about it openly have big plans on electric vehicles. So far, if I take segment by segment, two-wheelers have at least a dozen good products on the market. Two or three of them are established, players. Many of them are new players eg Ather Energy, Ola and Hero Electric, not Hero MotoCorp.
Hero MotoCorp has also come up with a product. TVS and Bajaj also have their own products. So a lot of products have come and a lot more will come. It’s a fairly well established technology, and it will cut costs as well.
Right now, the main price is around 85,000 INR to 90,000 INR. With the PLI program and with more volume I think they would hit the average cost of INR 75,000 which would be a pretty good place.
On three-wheelers we have Mahindra, Kinetic and Piaggio. There are also five or six little new players. But again, once TVS arrives, the three-wheelers will take off pretty well.
Four-wheeled vehicles, at the moment, are suffering from not having enough products on the market. We need a lot more products for tomorrow.
Q. What would be the inflection point for electric passenger cars?
In my opinion, if we can make INR 8 lakh sedans with range of 250 km and INR 10 lakh sedans with range of 300 km, the products will take off. This is the sweet spot in my opinion. And I think it’s not too far and the PLI support will help achieve that.
INR 8 lakh hatchback sedan with 250 km range and INR 10 lakh priced sedan will push demand for electric cars in the fast lanePawan goenka
Q. What do you think of Tesla’s request to reduce taxes on imports of luxury electric cars?
I think this is a very controversial subject and some industry players might not agree with my point of view. In my personal, absolutely personal opinion, this can only be reduced for electric cars. Maybe it can be done for a limited number of vehicles and not unlimited. I think for whoever will come it will have to test the work and it is very difficult to invest in manufacturing without testing. And so I would only personally support EVs, the tax should be reduced from 100% to 60% with a volume cap.
The government may be able to slow down new regulations, for now, allowing demand to return for ICE vehiclesPawan goenka
Q. The conventional industry, you can see, is in decline, what do you think? Should the government also focus on the traditional auto industry?
As the government has clarified, the PLI program also includes advanced technology components. Well, demand helps keep costs down. Although the demand is high, I do not expect the government to reduce the GST.
New regulations increase costs. It is a real concern. I think the government could perhaps slow down the new regulations, for now, allowing demand to come back. So it can be a balancing act.