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For Piaggio, electric is an opportunity not an obligation

Murali Gopalan | Updated on August 02, 2019 Published on August 02, 2019

India chief says customers should be free to choose what is most suitable

When Diego Graffi took charge as CEO and MD of Piaggio Vehicles two years ago, his top priority was to help out in “an effective transition” to Bharat Stage VI emission norms. This would extend to the powertrains for both the company’s commercial vehicle and two-wheeler businesses.

Graffi is doubtless pleased that Piaggio is on track with its plans even while readying its new foray into the electric space with the Ape City. The Centre has, of course, been pulling out all the stops on electric mobility even while its think-tank, Niti Aayog, was contemplating a ban on the internal combustion engine (ICE) for two-and three-wheelers by 2025.

“I appreciate the efforts of the government for pushing electric/incentivising OEMs but there should not be any kind of obligation. If electric has to succeed, it has to be more from the customers’ perspective and not because there are no other alternatives in the market,” says Graffi.

Co-existence

By the end of the day, electric can co-exist with other powertrain solutions to handle the challenge of emissions. With BS VI coming into force from April 2020, pollutants reduction will be more than 45 per cent, which is a huge jump from BS IV.

“The new powertrain that OEMs will bring into the market will be very low from the pollutants perspective. I think with all these coming into play, it is not in the interest of anybody to force electric mobility,” adds Graffi.

Even while incentives for electric will help companies’ cause, he believes there there must still be options available in the market for the customer to choose what is most suitable. “I personally feel that any kind of government support in electric or clean mobility is welcome and a positive development,” says the Piaggio India chief.

What is not so positive, he adds, is when the support is meant to disincentivise other kinds of technologies. In a free market, the customer should be free to choose any product so long as the product he is going to buy “is respectful of the environment and pollution rules”.

However, if the policy is meant to ban other kind of technologies that are also clean and environment-friendly, this does not add up. By the end of the day, any policy meant to incentivise the application of clean technologies is “not only recommendable but mandatory”.

Opportunity over obligation

The push for electric should be interpreted “not as an obligation but an opportunity” which helps manufacturers, customers, channel partners, component makers and so on. “If it (electric) is seen as an opportunity, I think it will start growing very fast,” says Graffi.

Piaggio has been working relentlessly to transit to BS VI for its diesel powertrain. The new 600 cc engine being developed with Greaves Cotton will “see the light” in mid-November. According to Graffi, the company has traditionally focussed on diesel but has been investing over the last few years on alternative fuels like CNG.

“Beyond diesel, we wanted action on alternative fuels too, which would assure performance, efficiency and so on. We are planing to complete the transition to BS VI by the end of this year,” he says. Piaggio is now “nearly at the end of this journey” even while it began “making the experience on electric” more than a year ago.

This will kick off in the three-wheeled Ape City where production will begin in September. As Graffi says, this will be accompanied by an “innovative solution” in the form of swappable batteries developed with Sun Mobility of Bengaluru.

It is now over a year since Piaggio teamed up with the company with the objective of providing the vehicle and battery swapping solution. The pilots will happen in Pune and Bengaluru where customers (the drivers in this case) will leave the discharged battery at the station while taking a new one in the bargain.

“This will be our first experience in electric for the Ape City along with Sun Mobility,” says an upbeat Graffi. There will be support coming in from R&D in Italy. This will be a critical exercise since the entire business model is completely different.

“The serviceability of this vehicle in our network will be challenging since the technology is completely new,” says the Piaggio chief. The challenge, therefore, is to prepare the network (for servicing) and the customer for this initiative. After all, the battery is not part of the vehicle package that he is buying but owned by somebody else.

Battery swapping

Instead of filling fuel from a regular outlet, the customer will now need to go to a battery station. He will then leave the discharged battery while taking the new one. In terms of cost, it is more or less the same but the mindset needs to be completely different. This is not going to be easy and will require a rebooting of sorts.

“We want to therefore build our experience along with our partner and the dealer network,” explains Graffi. The swapping station could perhaps be installed at dealer outlets, which will then end up being an additional source of revenue. The Piaggio MD has no illusions that this will not be a walk in the park.

“Obviously there are challenges because you have to plan your daily usage in order to reach the swapping station before the battery is discharged,” he says. Additionally, there will not be an unlimited number of swapping stations quite unlike conventional fuel outlets.

“The plan that the customer makes when he uses an electric vehicle will be completely different,” he says. Going forward, Piaggio will take feedback from customers and network while monitoring daily use of vehicles on roads. “We will take all these inputs and plan the next course of action. This is now a path that is in place and we need to seriously think how to develop our current portfolio not only in terms of conventional fuel applications like diesel and CNG but also electric,” says Graffi.

In the near future “for sure”, Piaggio will seriously consider the option to have an electric variant for every product that can meet customers’ needs and expectations. “This is something that we have started thinking and the push coming from the government is definitely very positive,” he adds.

For now, the battery swapping model is one of the solutions being considered by Piaggio for the electric drive. It is largely intended to remove the “kind of mental constraint in the initial stage” that customers may have.

Published on August 02, 2019
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