The Covid-19 pandemic hasn’t been kind to the auto sector, and the electric fleet segment is no exception. Experts suggest that increasing demand for personal mobility could hamper the growth of public transport providers. Last year, JBM Auto announced fresh investments in its electric bus unit. The company had said that it will invest ₹500 crore in next two years on charging and battery technology and to build business.
Fortune India spoke to Nishant Arya, executive director, JBM Group, on whether JBM is still on track to achieve its target of producing 2,000 vehicles a year, how the pandemic affected the industry, and whether the “vocal for local” approach is the way forward. Edited Excerpts:
Buses were amongst the worst hit in the slowdown-battered automobile sector. What’s the road to revival?
India, one of the fastest growing economies in the world, is achieving a growth rate of 7.5% per annum. With a growing population too, the country is working hard to transform itself over the next few decades. Currently, India has 1.6 million buses on road. The bus density is 0.75 buses per 100 people in India and it is targeted to be raised 1-1.5 buses per 100 people. There is a huge opportunity for bringing safe and affordable public transportation. In Delhi, there is a requirement of 11000 buses but currently only 6000 buses are fleeting on road in Delhi.
With social distancing norms put in place, has the demand for shared mobility gone down?
Covid-19 pandemic has changed the landscape of public mobility, both private as well as public. This is especially true when it comes to the burgeoning shared mobility space. Initially, a definitive reluctance was witnessed as people were skeptical in using shared modes of transportation like the buses and metros. But with due protocols put in place and preventive measures implemented by the government and authorities, ridership has seen a plunge in the past few months. It is worth mentioning here that a majority of our population in India is dependent on shared public transport system, hence, the demand and utility of the same can’t be contained for a long term.
Do you think financing for the commercial vehicle sector has declined? What are some of your demand revival strategies?
The performance of the auto sector in FY20 compared to FY19 has not been very promising in itself due to the slowdown with Commercial Vehicles going down by 30%. With the pandemic hitting, this has further taken an adverse toll. However, the announcements made by the government in the recent past with regard to domains such as electric vehicles and EV charging infrastructure, the sentiments are sure to be restored as we gradually come out of the Covid phase.
The Niti Aayog had proposed to push for full conversion to EVs, from internal combustion engine (ICE) three-wheelers by 2023, and two-wheelers (for engines with or below 150 cc capacity) by 2025. Under FAME, the Indian government is spending INR 10,000 crore in Phase II, while INR 1,000 crore has been earmarked for charging infrastructure under FAME II from 2019 to 2022. In its suggestion for CO2 limits for cars and vans, the Commission went even further and recommended that the EV market share should hit 15% between 2025 and 2029, topping 30% after 2030.
What are some of the trends that you can predict would be prevalent in the post-Covid world?
India is being looked at as the next manufacturing destination from global companies. The bilateral ties between India and Japan, Korea, and the U.S.A. will certainly have a long-term positive impact in this regard. Japan had earlier announced a $2 billion investment package for companies to move out of China. The Make in India programme is sure to gain increased momentum with the inflow of foreign companies, thereby, strengthening the manufacturing capabilities inhouse and India well-positioned in becoming the contract manufacturer for the world. The government can come up with new tax brackets to promote new companies to invest in India in sectors such as automobiles, textiles, high-tech manufacturing, EVs, etc.
What's the impact of Covid-induced lockdown on the economy of electric buses, as the segment was considered low-hanging fruit for the adoption of e-mobility in India. Do you still feel that the growth momentum will sustain?
The Electric Vehicle segment is an opportunity area for India. Having gone through the lockdown phase, people are now more focussed towards their health, safety, and environmental sustainability. The lockdown has had a positive impact on the environment and climate with air and water getting cleaner and fresher, which needs to be sustained. Thus, as responsible citizens and corporates, focus will be more on new technologies such as electric vehicles. Various government schemes that were announced in the recent past, such as the Phased Manufacturing Programme (PMP), will stand beneficial to promote localisation by way of collaboration between the various EV and EV ecosystem players, thereby, reducing the dependence on imports.
What's the idea behind the 'Well to Wheel' initiative and how can it help build a conducive ecosystem for e-mobility?
JBM developed the 'Well to Wheel' concept which drives the business across our various verticals. It is helping to drive our initiatives in sustainability and green manufacturing. Our multiple businesses are synergised for a seamless solution, from the generation to consumption of clean energy and aids towards building this ecosystem as an end to end in-house solution.
We manufacture 100% electric buses in India and to support the running of these buses, we provide EV charging stations as well. Our renewable energy division caters to setting up solar power plants for the generation of green energy that is, in turn, supplied to the EV chargers. In a nutshell, we have an entire range of in-house solutions right from green energy generation to energy consumption. India is well poised to become a key player in the EV space considering the size of our market. We have already deployed our EV solutions across various locations in India, starting with Mumbai where JBM has supplied 30 ECO-LIFE 100% electric buses. ECO-LIFE, a Zero Emission Vehicle (ZEV) saves around 1,000 tonnes of carbon dioxide and 350,000 liters of diesel over 10 years of its operations.