Volkmar Denner admits it is a “delicate question” that will need a carefully thought out response.
The Chairman of the Bosch Group is visiting India and, during a select media roundtable, is asked what he thinks of the Government think tank Niti Aayog’s proposal on making electric mandatory for two-wheelers under 150 cc by 2025.
This effectively means that the internal combustion engine (ICE) will need to be shown the door, an idea that has obviously not gone down too with two-wheeler manufacturers.
“It is difficult for me to answer your question because on the one side Bosch is a leading technology company. The other part is that we are the supplier of the automotive industry and are respected by our OEM customers,” Denner tells this writer while weighing his words carefully.
Alternate way
The Bosch CEO then volunteers his personal opinion on the subject while offering an alternative line of thinking. From his point of view, where industry is clearly resisting this move, perhaps there could be an alternative way to examine the proposal.
Hence, in a situation where traditional ICE manufacturers like Bajaj Auto and TVS Motor industry as well as Honda and Yamaha are opposing a move to go 100 per cent electric overnight (while banning the ICE), “why not try the idea in several pilot projects/cities” instead first?
Hence, in lieu of the 100 per cent idea that Niti Aayog has in mind, Denner believes that these pilot projects will help “people study the issue, identify the problems, where to adjust” and so on. It is as important to ready the infrastructure, provide vehicles and then study market acceptance. It is precisely what two-wheeler manufacturers have been saying too in terms of taking one thing at a time. None of them has an objection to electric mobility as a concept but to ban the ICE engine is a bizarre idea especially when they have spent huge money on new technology for Bharat Stage VI emission norms, which become mandatory from April 2020. Additionally, these two-wheeler companies are concerned that this huge move to electric at one go will jeopardise their exports of ICE engines as well as risk jobs in their plants. The supporting ecosystem of suppliers and dealers will also be affected in the process.
Denner says he completely agrees with these apprehensions and adds that this is not an India-specific problem by any stretch of imagination. After all, Europe is coming down hard on diesel, which is now being seen as the villain of the emissions drama.
“Across the world, this is a very difficult process to navigate through. There are so many issues that need to be considered beyond technology and environment,” says the Bosch CEO.
Balance needed
While making it clear that he has no objections to environmental issues, Denner says one needs to take into account the viability of the company as well as social responsibilities. All these three aspects “will need to be balanced” though, unfortunately in many parts of the world, “we have one-sided discussions”.
In Europe, for instance, the focus is on ecological issues but perhaps it is essential to think of a more balanced discussion publicly. It is not “easy clearly but it is necessary absolutely”. By the end of the day, reiterates Denner, mobility still has to be affordable to the end-customer.
This is where open discussions could help the cause and allow people to get a better idea and form opinions. The aspect of affordability is especially true for India, which is a price-sensitive market and even a slight cost increase is enough to put off potential buyers especially in the two-wheeler space. This is where a 100 per cent electric ecosystem will hardly help anyone’s cause since prices will shoot upwards of ₹1 lakh and there is just no way that a rider of a basic commuter motorcycle can even contemplate accessing an electric option.
Manufacturers also insist that BS VI is a far cleaner option, which should be given its place in the sun. To just give a five-year window to the BS VI era before electric takes over would be suicidal, they fear.
Soumitra Bhattacharya, Managing Director, Bosch, and President, Bosch India group, refers to the “critical transition” of BS VI where “diesel, gasoline, hybrid and electrification all have their need and ICE will be there for a long time”.
Continuing with the clean air theme, Denner makes it very clear that companies like Bosch must make a contribution against climate change. In his view, this is something that has become even more important lately.
While with today’s technology, electrification is possible, it still remains an issue of affordability. For passenger cars, the move to electric must be done in a “very cautious manner” since the electrical grid infrastructure does not allow the population of EVs.
“We cannot keep burning fossil fuels as we did in the past,” says Denner, especially with climate researchers calculating a host of aspects that pose important questions to countries like India, which are already grappling with extreme heat conditions and air pollution.
Predictions
“Globally, our prediction is that by 2030, 75 per cent of all vehicles sold will have an ICE. Many of them will be hybrids but still it is an ICE; 25 per cent will be battery electric,” says Denner. The number in India will be slightly different but this is still “an ambitious plan” in terms of selling a quarter of the vehicles worldwide as electric. “Many people today, in my view, are over-exaggerating the battery part and our position is that we are driving the cause of electric even while 75 per cent will be ICE,” adds the Bosch CEO. Climate change, he adds, is real and it becomes an obligation to make the ICE as clean and environmentally friendly as possible.
“That is why we are still driving investments in diesel and gasoline. We have kept on working on diesel technology to improve it further and make it more robust in terms of reducing emissions,” says Denner. On the gasoline side, the main challenge is particle emissions and Bosch has shown that by an upgrade of the injection system and use of a particulate filter, emissions can be reduced.
2050 deadline
According to Denner, 2050 is a realistic deadline for fossil fuels and therefore it is clear that “we need to phase them out” in this timeframe. This does not mean that the ICE will be completely gotten rid of. If fuels are created based on renewable energy, one could still use the ICE without fossil fuels, which would be CO2 neutral.
As Denner says, there is no possibility of driving electric fully tomorrow in terms of climate impact. In his view, there is enough time when “we are looking at 2050 in terms of (eradicating) fossil fuels”. The top priority is to define the target; if it means no local emissions, e-mobility is the technology of choice.
However, with the improvements made in ICE, there is something out of the exhaust pipe that “we can measure which should be low enough and does not contribute anything remarkable/sizable to air pollution”.
Denner lightly adds that being a scientist by education, the current world is a dream because there are endless opportunities. Being a company CEO is very much different, however. “If you look at what Bosch is doing with powertrain on ICE, electro-mobility, fuel cells and so on, do we exactly know if this technology will come? No, but it is still important to be prepared as a technology leader,” he says.
Denner is equally concerned about the state of the world with trade conflicts and the like disrupting the overall market and hitting customer sentiment in the process. As he explains, industry is also psychology to a large extent and “if you are uncertain as a customer about what is happening”, it is but natural to turn wary about investing in a car for instance.
To that extent, sentiment is coming down big time across the world. For a global company like Bosch, worldwide supply chains are in danger. Components are travelling across the world several times as part of open global trade and this is coming under threat due to trade conflicts.
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