Mahesh Babu, CEO, Mahindra Electric

Q:  Dear Mahesh thank you for your time, please share in detail how has been your journey so far as the CEO of Mahindra Electric?

A: My journey with Mahindra and Mahindra began two decades back. Over the past two decades, I have worked extensively in the technology and product development space. It always amuses me, how technology can play a transforming role in life of people and as a responsible engineer, how can we shape up the future.   This has definitely helped me connect with a future technology oriented organisation like Mahindra Electric.

It is an exciting time for Electric Vehicles in India and it is an honour for me to lead the team at Mahindra Electric at this juncture. I am very happy to be leading an organisation with a unique mix of the strength of Mahindra policy and process framework and the agility of a start-up. The environment at the organisation is very different from a stable automotive business. It is based on technology and constant innovation, which requires us to be nimble and fast in our operations/decision making. As pioneers, our efforts are always towards growing the EV industry along with growing our organisation. After all, what we do today is going to define mobility tomorrow.

Q: Recently Mahindra & Mahindra announced about an investment of Rs 4,000 crore in electric vehicle business, can you tell us more about the investment? Is the company also looking at a joint venture partner in motor and power electronics, apart from infusing the money for its half a dozen new EV vehicle portfolio?

A: Mahindra & Mahindra has been consistently investing in the EV business since 2010, and the current announcement is also a part of the same growth plan. As announced in May this year, we will be investing into scaling up our manufacturing facilities as well as developing on our technologies, products and mobility solutions. We have carved out a well thought out future plan around these and have christened it EV 2.0.

Apart from this, we are always looking to collaborate with other players to increase the adoption of electric vehicles as well as deliver additional value to our customers. The specifics of any joint ventures and partnerships will be announced as and when they are finalised.

Q: This investment is being observed in media as an after effect of losing the prestigious government electric vehicle order to Tata Motors, what is your take on this?

A: We welcome competition in the Indian EV space.  More and more stakeholders will translate to faster growth for the entire ecosystem. We are happy that there are more believers in Electric technology now.  As pioneers in electric space, with our 50 million kms of experience in Indian subcontinent, we will continue our commitment to Electric vehicle technology. In line with this, we were very happy to be the first to deliver on the government’s EV tender ahead of competition and on time.   We are mindful of the fact that with a vision of India becoming all electric by 2030, we will have competition and we are prepared to lead this space with other players in the space.

Q: What are some of the main advantages of electric vehicles?

A: The first and most important advantage of EVs, given the times that we are living in, is that they have absolutely zero tail pipe emission.

In addition to boasting of green technology, EVs are also more efficient, on both parameters of energy and economics. EVs effectively utilise as much as 80-90% of energy (as compared to a 20-25% in ICE vehicles). In terms of cost, while currently the initial cost of acquisition may seem high, EVs prove to be more cost effective over a period of 3-5 years with running costs as low as 70-90 paise. Given the trends of technology advancements, the initial investment is also likely to come down within the next 5 years, which will make EVs much more economical than other vehicles.

Apart from this, EVs have the capability of being ‘connected’ like no other vehicles. The on board electronics can deliver connectivity not just with a smart phone, but with charge points, service stations or even transport systems like red lights or toll booths. Such connectivity features are already available to a certain extent and are being developed further as a part of our mobility solutions.

Q: Tell us a bit more about EVs in Asian countries and how it’s progressing in terms of growth etc.

A: Asia, primarily driven by China has really been the front runner in EV’s globally. China has been the hub of the market with several critical aspects of the EV ecosystem focused there like Battery technology and low cost components. China also is a market where the government has played a huge role in supporting and bolstering the home grown local EV market. When the market was in its nascent stages, the Chinese government had provided initial incentives to the tune of 50 – 60% on the vehicle prices. Also China has in place a high penetration of publically available fast charging infrastructure that helps support the operational aspects of EVs. These factors have helped transform China into one of the world’s largest EV market with vehicles across all segments – two wheelers to buses, with an annual sales of 250,500 in 2016 (BEV share among PHEV’s~75%).

Apart from China, Japan is also a key market in EV’s with Toyota being an early player in the hybrid space and Nissan in the pure electric vehicle space.

The other fast growing economy of Asia – India, is also contributing to the overall growth of the EV industry. The recently announced vision of the government, to go all electric by 2030, is a strong indication of the seriousness with which the economy is taking the EV industry. This vision is supported by the NITI Aayog recommendations specifying that for the unique characteristics of the Indian economy, the ideal way forward will be focus on mass mobility transportation moving to shared, connected and electric. We believe with this EV vision, India has a chance to lead the world in the mobility space of technology, manufacturing and market place.   We are very happy that we have been able to align our plans with these recommendations and will continue to play an important role in this journey, as the pioneers’ of EV in India.

Q: Being an expert in this segment do you see rise in adoption of EVs in coming years across the world?

A: Absolutely. We believe EV’s are the future! With stricter emission norms becoming prevalent across the globe and consumer sentiment rising for EVs, adoption would rise exponentially in the coming decade. This would be aided by the fact that key technology cost for EVs like the battery, is also on a downward trend. As per the current trends, EV battery cost may touch the $100 – 150/kWh range by the 2021 – 2025 timeframe. This would put EVs on a comparable plane with ICE vehicles in terms of acquisition cost and make their adoption easier.

As per a GS report, India alone might see as many as 3million EV sales by 2032 (aggressive projection), bringing the EV penetration up from 0.04% to 40% in the country. The report also states that globally, EV will comprise 51% of the total auto sales over the world by 2040 (aggressive projection).

Q: What part of the revenue does the company pumps into R& D of electric vehicles and what are your upcoming products?

A: Developing in-house R&D capability for electric vehicles was one of the main objectives of the acquisition of the current EV business by Mahindra & Mahindra in 2010. As part of this objective continuous investments have been made in developing a state of the art R&D centre which has manifested itself in the form of our Electric Vehicle Innovation Centre in Bangalore.

Our EVs have also completed more than 50 million electric kilometres on roads, giving us a plethora of data to learn from.

This innovation centre learns from this data and is solely focused on developing Electric Vehicle technologies. It is one of its kind in India with dedicated test labs for EV powertrain components. We now also have in-house capabilities for technologies like drivetrain systems, battery packaging, BMS, control systems like VCU & MCUs. In these facilities we are currently developing globally competitive powertrains which will go in the next line of Electric Vehicles from the Mahindra stable, planned out in our future strategy – EV2.0

As a part of EV 2.0, we have announced that we developing products in two major segments – mass mobility and luxury. Our teams are aggressively working on electric three wheelers and buses and we will be launching these soon. This will be aligned with the NITI Aayog’s recommendation of promoting EVs through shared, electric and connected mobility solutions. In addition to this, we will also be launching a few ‘objects of desire’. These would translate to high end vehicles which will deliver high performance.

Q: What is the major hurdle to EV adoption and how can it be sorted out?

A: The key challenges for EV adoption in India are caused primarily due to low penetration of charging infrastructure and perceived high initial cost of acquisition. We are very glad that the government has announced the vision 2030 as this sets the stage for even more favourable policy push towards EVs. Charging infrastructure is going to be very important aspect of that. Discussions around this have already begun and we have seen the Bharat Charging Standards rolled out, as a result of this.

As far as affordability is concerned, when compared to fossil fuel vehicles, EVs still seem to have a higher cost of acquisition, even though the total cost of ownership is much lower for a 5years in fleet application. This understanding requires the customers to be educated on the technology and experience EVs first hand. While we are working to bring down costs at our end by at least 20% over the next three years, we also take several initiatives through the year to educate customers.

In addition to this, government support in bringing battery manufacturing to India and making localised part production more lucrative, will certainly help reduce this cost further and help fix this skewed perception of EVs being expensive.

But even with these challenges, the EV four wheeler segment in India has been seeing rapid growth in terms of vehicles on road. While the absolute number may not be very big, the percentage growth is a very healthy indicator of growing interest in EVs.

Q: What role will EVs play in achieving a de-carbonized future and climate change?

A: The world as we know it, is struggling with air pollution like it never has before. India in specific, houses several of world’s most polluted cities. Our capital New Delhi for example, is struggling today with the frightening situation of smog settled in the atmosphere. The search for alternate fuels is nothing but urgent, and how each person can contribute is to switch to shared and electric commuting to reduce their individual carbon footprints.

CO2 emissions for EVs from well to wheel are 25% less than ICE vehicles, while considering the emissions from power generation at the energy mix in 2014 (0.82kg-CO2/KWh*) This number will improve exponentially with energy mix shifting towards renewables, and considering improving efficiency of EVs. Currently EVs are as much as 2.5 times more energy efficient than equivalent ICE vehicles, and technology trends are going to push this EV efficiency even higher.

Clearly, all-electric mobility is going to be an important step towards de-carbonising and preserving our planet.

Q: What’s it really going to take for EV to go mainstream and how long?

A: Across the world, adoption of EVs is going to be determined by an interplay of four major factors: reducing cost of batteries, which comprises almost 40% of the vehicle cost as on date, to make the cost of acquisition at par with other vehicles; development of a reliable and extensive charging infrastructure; customer awareness and education on EVs; and last but not the least an initial support from the government in the form on incentives and policies.

In a growing economy like India, certain segments are already ripe for adopting EVs as the primary source of movement. For eg. The three wheeler segment and the mass mobility segment (buses). We are expecting that the next five years will be very crucial for the growth of EVs in these segments and by 2020-25, one would be able to see a significant impact as well.

Q: What support the EV industry needs from the Government to phase out the vehicles currently dependent on fossil fuel running on road?

A: The stage is set for favourable policies as well as an active push for adoption of EVs coming from the government. We believe that this is going to make India one of the leading players in the global EV mobility space. The FAME scheme has been in place for a few years and has helped drive adoption till date. The government recently also announced an extension on the same, indicating its commitment towards EVs. This has been supported by state level policies, like the one at Delhi which offers an additional subsidy of INR 1.5 lakh over and above the FAME benefit. We are expecting this push to get even more aggressive and bring with it a new era of Indian mobility. The May launch of the electric fleet in Nagpur, a joint project between the Mahindra Electric, Government of India and Ola; is a great example of this.

Apart from financial support, the government is actively working on developing the Bharat Charging standards for the country, which will cater to both low and high voltage charging systems. We are hopeful that as soon as the government rolls out these standards, there will be a substantial addition to the momentum with which the development of charging infrastructure is going forward.

Another important area where the government can support is by leading the nation from the front and adopting EVs for government department transportation requirements. This will work as a good confidence booster for the citizens of the country. We also believe that until the cost of EV technologies is high and the sale volumes are low, government support would be needed in incentivising local production. Such steps will definitely impact the entire ecosystem of EVs.

Q: Do you have personal favorite EV?

A: I personally love the e2o. It was the first EV that we launched under the Mahindra brand, and so is of course very special for all of us. Apart from that, I think it’s simply cute, unique looking and the vibrant colours make it stand apart.

Q: India is aiming to become 100 percent electric vehicle nation by 2030, do you think it’s an achievable target?

A: We welcome the announcement of the government’s vision to go all-electric by 2030. This definitely reaffirms our belief that the future of mobility lies in EVs.

NITI Aayog’s plan focuses on public mobility and this, we think is the right way forward for an economy like India where mass adoption will be driven by public and shared transportation programs. The plan also suggests different methods of managing the infrastructure like battery charging ecosystem as well as battery swapping ecosystem. We have taken due cognizance of both and preparing for vehicles to suit both models. It will of course involve all stakeholders working together to develop the entire EV ecosystem for the country.

If India achieves even 20% of the vision articulated, it will translate to big volumes for the EV industry and a significant progress towards the EV system at large. Certain segments like 2&3 wheelers, fleet 4 wheeler and city transport buses have a high potential to achieve the full electric mark by 2030.  As pioneers of EVs in the country, we are very happy to contribute to this cause!

Q: India’s push for EVs is closely bound to its drive for solar energy; can you say a bit more about that?

A: As it currently stands, the ratio of energy generation in India from renewable to non-renewable sources is at 16% to 84%. Going forward the projection of renewable to non-renewable by 2027 is 43% to 57%, of which coal alone will be 38%, so the overall electricity generation is projected to become much cleaner.

Of this projection, the biggest chunk is going to come from solar generated power. Towards this front, one can already see some of the world’s largest solar plants being developed in India. States like Rajasthan, Tamil Nadu, Madhya Pradesh etc. already boast of solar generated electricity supply. In recent times, per unit cost of this electricity has also come down. We at Mahindra also recognise the potential of solar generated electricity and Mahindra Susten solely works in this space.

Putting together this development with the boom in the EV space, is going to make EVs even greener to drive. In addition, solar energy will become increasingly cheaper, bringing down the cost of operating EVs even further.

Q: Finally, as a successful business leader what is your mantra for success and what is the key to be a successful leader?

A: My mantra is simple – create, test, learn and refine, all at lightning pace! In an environment where complete disruption is the only way forward, we at Mahindra Electric completely rely on this strategy. This coupled with a close customer connect helps us receive direct validation from the market, making our future planning even better.

To be a successful leader, a concept that I have always admired and followed is that of being a ‘servant leader’. I focus on developing a strong team based on their aspirations and attitude and then work with them towards creating a higher purpose. This makes us collectively responsible to achieve it and gives clear unbiased direction towards decision making. It’s the cooperation and effectiveness of this team that is the most important factor to ensure success.

(This interview was originally published in Climate Samurai, December 2017- issue)