Learn from Europe’s mistakes with EVs: Folger

The Centre may be betting big on electric vehicles (EVs) but luxury car-maker Mercedes-Benz finds this goal a bit too ambitious given the German experience where similar efforts failed to yield the desired results.

“In Germany, which has an average income level that is at least twice as much as India, hardly anybody is buying EVs,” Roland S Folger, Managing Director and CEO at Mercedes-Benz India, said in an interview.

“The government is subsidising them with substantial tax breaks of €4,500. Yet there is no breakthrough despite the fact that German cities have massive numbers of charging stations unlike India.”

Folger says that it may be premature to assume that in the Indian context EVs can reduce emissions. The Centre needs to revisit its plans to have a cleaner environment in a more holistic manner instead of assuming that going all-electric will reduce emissions.

“You need to look at the mix today of how much comes from coal and oil burning for creating electric technology versus how much is coming from green technologies,” adds Folger. At present, a kilowatt-hour energy produced by EVs “that is generated from coal and gas as compared to a litre of oil” is more polluting than a Bharat Stage IV vehicle.

Clearly, the top priority should be to focus more on cleaner fuels instead of chasing the electric dream. Folger said the push towards EVs might also end up helping Chinese companies much more instead of suppporting homegrown automakers such as Mahindra & Mahindra, Tata Motors and Maruti Suzuki. “Maybe China is the whole deal where it wants to influence India to make a decision that makes it easy for Chinese electric cars to be dumped here,” he says.

If this were to happen, it will go against the Centre’s move to go 100 per cent electric if the entire initiative being driven from China and not Indian companies, which would make more sense. “I don’t think the Government would much appreciate something like that happening,” adds Folger.

In addition, the plans to use swappable battery stations for EVs may sound like a brilliant idea but is, in reality, not practical. “It took the auto industry in Europe six years to define what kind of common plug we want to have for swappable batteries,” says Folger. “There is no way that you can get everybody to agree on even one single place where you want to put these batteries.”

The key reason behind this is that the placement of battery in a vehicle has effects on its overall drivability, stability and crash-worthiness. “To assume you can get everybody on a common place where to put this is simply not realistic,” he adds.

“And even if you find a solution for that in India, your local companies will not be able to export the technology to Europe because you don’t have it there.”

Folger also took a dig at hybrid vehicles wondering “why bother with hybrids” if you could move to BS VI earlier.

“Hybrid, especially on petrol, gives you maybe 15 per cent improvement on consumption if you are really lucky. In BS VI, you are talking about 82 per cent reduction in NOx and 63 per cent in particulates,” he said. For the moment, it does not look as if the Centre will budge from its stance of reducing the GST levy on hybrids, which now stands at 43 per cent compared to a mere 12 per cent levied on EVs. A section of the industry argues that this is not a practical stance if the intended objective is finally cleaner vehicular emissions. In addition, it is their view that transiting from hybrids to EVs is the best way forward and for this to happen, there cannot be such a huge tax differential between the two.

Mercedes-Benz India is incidentally working towards achieving BS VI emission norms by 2018, two years ahead of schedule.

Across industry, the cost implications are going to be quite significant and it will be interesting to see how customers cope in a higher price regime after 2020.

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