Chinese electric vehicle giant BYD and Hyderabad-based bus maker Goldstone Infratech’s joint venture is betting on ramping up electric mobility in India in line with the upcoming FAME II (faster adoption and manufacturing of hybrid and electric vehicles) policy for promoting electric mobility in India over next five years. Goldstone Infratech plans to manufacture 5,000 electric buses a year by March 2021. In an interview with Fortune India, N.K. Rawal, managing director, Goldstone Infratech, spoke about the company’s expansion and localisation plans, and his expectations from FAME II.
What are your localisation plans in India?
We are looking at it very seriously and already a lot of things are being done. It’s already about 35 buses now. We feel that within one year, it will be anywhere between 50-70. We have been working with a lot of suppliers. Earlier, because they couldn’t see any volumes, they were reluctant to invest money in development. But I think now people are feeling more confident about the industry and the market. I am pretty sure we will be leading in the localisation also. Manufacturing has already started and the increase of local content continues to happen practically every week.
But the batteries still come from China. By when do you expect to become completely self-reliant?
As of now, yes, the batteries come from China. But, hopefully, by the time we meet next, they will be produced locally. Currently, we are not developing the technology. We are importing it and that is what BYD brings to the table. It’s a proven technology worldwide and in India, I would say that we don’t have a great ecosystem so far. So, we are not designing anything as far as the technology is concerned. So far we have supplied only 31 buses. So, you cannot expect it to reach that level right now. But we are very clear that India provides a lot of opportunity and we want to avail that benefit.
What do you see as a challenge in expansion?
We don't think there is any serious challenge. Obviously if you expect a 100% localisation tomorrow, it’s not going to happen. Any new technology takes times but we are very confident that our localisation may be ahead of others because of very strong support of BYD and them owning several technologies of their own. In one year, you will see 60-70% localisation, including the battery manufacturing. So, the costs will come down as it will avoid some logistics cost and some import duties. Our first challenge is on the skilled manpower. Then is the availability of ancillary industries.
Bigger corporate groups like the Adani group might get into the electric buses space. Do you worry about the competition?
At this stage, more and more players are required in the market to expand the ecosystem and to create skilled manpower. I think the market is huge and for the next few years, entry of new players will only help in expanding the market quickly. To begin with, there will be ample space for many companies and it’s good for the growth of the industry. We need more and more players to come and experiment with whatever they think is right so that at least electric mobility could grow.
What is next in the pipeline for BYD-Goldstone?
We will commence deliveries to Mumbai, Bengaluru, and Hyderabad in the next order, total quantity being 160. In next few months, we will start manufacturing batteries from the cell level. Initially, some capacity may be set up by BYD directly in India. The battery plant of BYD is coming up in Chennai.
What are your expectations from FAMEII?
The government is working to tweak the earlier policy and to implement certain learning from the last time so that those issues could be addressed. And, obviously, we are expecting certain reduction in the incentive portion based on inputs from every quarter. The government is also considering that after having a word with industry stakeholders.