The Indian automotive industry is up in arms against the government’s plan to actively push public Electric Vehicle (EV) adoption in India. It is an utter shame that they should do so. But then again, there’s nothing surprising about this. If one remembers well, these are the same guys who were once up in another set of arms when the Indian government tried to make our cars safer by introducing NCAP-style safety rating for Indian cars. Their absolutely ridiculous argument was better safety regulations would actually increase deaths! Of course, higher prices (and reduced mileage) because of those safety features would make cars unaffordable, forcing people to buy unsafe two-wheelers leading to an increase in number of accidents! You can’t argue against such convoluted logic. But why are they so riled up now, especially when the electric vehicle market share in India is even below negligible, and one does not reasonably have to expect large-scale adoption in a long time? That is because with their massive data analytics capabilities and forecasting models and market research, they have seen the future, and that future terrifies them. But there is hardly anything they can do about it. Let me tell you a story.
The Three-Point-Something Rule of Technology Adoption
When I was in college in 2002/3, I enrolled with an Airtel distributor in Trivandrum to sell prepaid connections to government employees to make some easy money on the side. It didn’t go the way I imagined as it turned out to be impossible to convince people. People laughed at the premise of buying a mobile phone. Why? They asked. It is an impractical toy, they said. Their main points of argument:
- Absence of infrastructure. “There is no ‘range’ (cellular network connectivity) outside cities and towns.” And it was true, coverage ended as soon as you left city limits, and most of these people came from rural areas. They were unanimous that it would take atleast a decade for network to reach their homes, because companies would see no incentive in investing in villages.
- Equipment cost. Handsets were mostly expensive, with short battery lives, were confusing to use, prone to breaking down and difficult to repair. The 3310 was just becoming popular at that time.
- Alternatives. “I have a landline at home, there are hundreds of cheap PCOs everywhere and for emergency there are office phones. There is no point in this additional burden. And who will I call with the mobile anyway?” And so on.
Every point was valid. But soon the infrastructure improved, equipment cost went down, and alternatives lost their prominence. Just four years later, everyone had a mobile phone. And six years later, everyone had a smartphone. Changes happen without us even realising it, so fast that we wonder how we ever managed to survive earlier. And this is the future for electric mobility as well. You can deny their existence now, but they will be everywhere before you even know it. And this can be proved.
If you look closely, variations in these three points always decide and control the adoption of any new technology. As the first improves, the second goes down, causing the third to weaken (if it does not adopt and evolve), pushing the new tech to dominance. I call this the three-point-something rule of technology adoption. And this is applicable for EV adoption as well. Not a single person I speak to is averse to buying an EV, they do not take the plunge because of, well, absence of infrastructure (charging points), equipment cost (EVs are expensive) and alternatives (well, you know). Once these improve, they will drive EV adoption through the roof. These three points once held back the adoption of petrol cars as well. Standard Oil and Henry Ford eliminated the third (EVs) resulting in today’s world order. The establishment of robust charging infrastructure alone would single-handedly push internal combustion engines out of the market. The government seriously advocating EV adoption means this is now only a matter of time because in India, government approval and validation is the first and foremost requirement for large-scale public acceptance. If I could deduce as much, the industry knows it way better. They are seeing a real threat to the traditional fossil-fueled automobile industry in the government’s EV push. But why wouldn’t they want to change? It is all for the good and better, right?
Creative Destruction in the Indian Automobile Sector
The Indian automotive industry is one of the most conservative, risk-averse, status-quoist, pampered and unregulated in the world. It was only very recently that the government started insisting on norms for vehicles sold in India. Until now, the Indian transportation scene operated with no rules or norms whatsoever, a true free-market! And the result is for everyone to see. Total anarchy. For more than half a century they got away with everything including murder, fooling generations of Indians with horrible products that wouldn’t even be allowed on most roads in the world. Indian cars were typically built small and lightweight (a Maruti Alto weighs 725 kilos while the Baleno and Swift weigh just 865 kg etc.), with no safety features whatsoever (airbags? unnecessary expense. Crumple zones? You’ve got to be joking), bland, uninspiring interiors of terrible aesthetics (They must be made of old recycled plastic buckets. It’s the same thing!) and terrible, horrible, godawful driving dynamics (The last drivable car Maruti produced was the 2006 Zen). Compare the Polo sold here with the Polo sold in Germany. And there is a reason for this, one that we all know.
Indian cars are designed and produced with only one thing in mind: to squeeze that ever-last micromillimeter out of every drop of fuel. They created this obsession for kitna deti hai being the only selling point for a car. The industry’s sole mission was to rake in margins by selling crappy tin cans on wheels that barely qualify to be classified a car. The entire industry ecosystem from design to concept to sourcing to tooling to producing to marketing to selling to shipping to servicing to customer interaction was built on this premise alone. Any move to depart from this proven, money-making strategy that kept the customer dumb and uninformed like a puppet on a string was fiercely resisted. For instance, did you know that cars produced for sale in India contain only 30% galvanised steel, while cars produced for export from the same plant contain 70%? More steel means more weight, less mileage and more cost. Same goes for air bags, crumple zones, ABS, and so on. And now they are scared that if Indian customers were to switch to EVs, it would mean the end of days for the internal combustion engine (ICE) and with it this very profitable money making scheme. They would have to ditch their comfort zones and enter the territory of the unknown. They will have to build entirely new ecosystems from design to service from scratch. Massive adoption of electric vehicles will bring in a kind of creative destruction never seen before in India, which terrifies the highly risk-averse Indian automotive industry.
Two Wheelers Will Drive EV Adoption in India
The anxiety towards this policy is especially visible in the two-wheeler segment. Electric vehicle adoption in India will not be driven by cars but by scooters and autorickshaws (followed by public buses). Cost differences between ICE and EV two or three wheelers are negligible, electrification has now reached nearly everywhere, running costs are close to nothing and they can be plugged into any outlet with a standard three-pin plug and socket. Some electric scooters even come with removable, portable batteries. And that is what they’re scared of. A leading Indian two-wheeler company is so conservative that their products haven’t changed for the past two decades. It is no wonder that the two-wheeler industry is among the most vocal critics of the the government’s EV push. We common idiots who are taught to believe in a strong sense of “good” and “bad” might see this as a good thing, but unfortunately, “good” for the industry means only profits, to attain which anything is justified, which includes killing people or destroying the planet. India’s automotive industry thrived on government patronage for over half a century. Complaining and crying victim when this favour now moves in another direction makes them look like a jealous little boy who is pissed because his new little baby sister is getting all the attention. It also isn’t much different from taxi drivers outraging against Uber or large kirana stores protesting against Amazon.
A lot of libertarian types complain that governments should only set standards and “the market should decide” which type of mobility should win. A century ago, electric vehicles were the dominant mode of personal transportation in America. No, really. What did you think, that cars were invented to run on petrol? Oh you poor dears. And upto half a century ago, the country with the most intricate urban, suburban, exurban, intercity, crosscountry and transcontinental public transportation network was not Japan or the UK or Germany, but the United States of America! Despite being the most ridiculously inefficient and outdated technology in the world, the ICE and the private car ruled the apex position of the mobility food chain for an entire century only and only because of government patronage! Western governments actively supported, encouraged and patronised the automotive, ancillary and roadway industries with policy, funding, tech, design and subsidies while unfairly regulating and discouraging all competing technologies to their deaths. Read up.
The right time for the Indian road transport sector to be overhauled and cleaned up was thirty years ago, but better late than never. There has to be no mercy. We require norms that are no less than draconian and implemented those with an iron fist to make Indian roads safer, reduce remove emissions and inculcate proper driving habits. This push for electric vehicles will disrupt everything we currently know as our way of life and will cause massive changes in everyday lives of the Indian public. We have lived in the old status-quo-ist India where nothing changed for way too long. Change has to begin somewhere, might it as well as be this way. As for the industry, the best thing they can do is stop whining, see the writing on the wall and try to change with the times. If they don’t, they will go the way of the dinosaurs that power their products. Because thus is the law of nature.
