Collaboration between Industry & Government will Create a Fertile Ground for EVs in India

We all remember how just within a couple of months into the lockdown, the world started sharing pics of the healing earth, which was more greener, cleaner and was breathing after a long time. Even the ozone layer repaired itself. I promised myself to keep a check on the amount of pollution I create on a daily basis to continue contributing towards this great cause. But then will I be able to do stick to it if I continue using my petrol vehicle which is one of the foremost cause of pollution in our country. Remember India has some of the most polluted cities of the world! 

Like me there would be several others who wish to find an answer to this, and electric vehicle sure is a ray of hope. But the cost of purchasing an electric vehicle is far from the reach of many people. So how can the EV industry work towards replacing petrol vehicles with EVs that even a common man can afford? Let us find the answer with Sohinder Gill, CEO, Hero Electric, and Director General of Society of Manufacturers of Electrical Vehicles, who spoke to me in length on this and much more. Sohinder has been in the automotive industry all his professional life and associated with Hero Electric for over 13 years now. His passion is contributing towards society and EVs is a way to do the same. For him, passion is addiction. Let’s start. 

How has COVID-19 transformed the industry? How did you tune your strategies to make the policies and strategies work better?

Pre-COVID-19, we had the record highest sale. We were planning to celebrate our year end with a historic high of 50,000 numbers. But this COVID hit us in March end. It was just like hitting a wall because we didn’t know what to do as all the shutters were down, offices and factories closed and labour had disappeared. So from celebration it became a doom. 

We then thought of how to get out of this crisis and light the dark areas we were in. And then we were able to see some silver lining. We never had a strong online presence, but were more on touch, feel and buy category. But COVID made it impossible for our customers to experience our products. So what to do? 

We came up with an innovative idea to allow our customers to continue with the purchase. We already had the brand trust of Hero. We encouraged the customers to come to our portal, look at the products and the various schemes available and get all their queries answered by our call centre. Post this, we segregated the interested customers and tried finding ways to make them comfortable. Hence we started couple of new initiatives. The first among them was to apprise our customers about the environmental advantage that COVID brought in. For instance, the absence of petrol or diesel vehicles from the road cleaned the environment. Now imagine the change that EVs can bring! We informed them that if they buy a Hero product, they fulfill their responsibility towards a cleaner environment. This attracted quite a bit of interest. We also offered discounts, which resulted in a massive sales growth. 

This was just the beginning of a new era of marketing and sales strategy. We received almost 10,000 inquiries about our products and decided to talk to them through town halls in their regional languages where I along with a panel of senior executives of Hero Electric answered their queries. But then these perspective customers wanted to touch, feel and test drive the bikes before making purchase decision. And this led to our second initiative where they can book a bike by paying a certain sum of money and we deliver the bike to their house. They can use it for three days and if they are not satisfied, we pick up the bike. This helped us sell one and a half times of what we used to sell, from 800 to 1200 bikes in just 20 days. This led us to believe that there is a possibility of online sale in a big way. 

The last scheme that we ran was the reference scheme, which became an instant success and resulted in sale of 2200 bikes. This scheme was named ‘Be a Bike Buddy’ which allowed the clients referee to get an additional discount of 2000. This was largely appreciated by our customers. 

Going forward, online will become a major strength of our organization where we can sell around 30 percent of our products online. 

Do you feel that the ecosystem of EV has changed in India and how is the industry transforming in a year’s time? 

There is still a lack of interest among the customers when it comes to buying EVs in India. There are several companies offering quality two-wheeler EVs which are at par with some of the best petrol two-wheelers. Through their performance matches, the price of EV is approximately twice that of the petrol bikes. So the storyline here is that people like the EVs but they don’t buy it. 

Today 80 percent of the EV two-wheelers sale is happening in the price bracket of 60,000-80,000. Indians are very cautious for value for money and City Speed bikes fits their budget and taste well. These bikes are attractively priced but on every day running cost basis, they save a lot. That is why I see an increasing number of customers shifting to EVs. 

If I talk about certain other advantages, especially during the pandemic times where people were following social distancing, EVs allowed them to avoid any crowded place like filling stations or service stations. Going forward, the pandemic impact is going to stay and hence people will be more cautious about the environment and nature, and hence adopt products which are green products, noiseless, maintenance less, environment-friendly and also good for the pocket. EVs have all of them. 

Could you predict the market size of EVs in India? 

Last year, the total sale of two-wheeler EVs were 152,000. Going forward it looks like even this year, the total automobile sector will go down but perhaps electric two-wheelers will not see the downfall but will crop the same figure they did last year. 

There is a lack of infrastructure for EVs in India, like the charging points and service centres. How is industry working towards developing it? 

We are in talks with the government to build charging points, which doesn’t need big spaces like filling stations. We just need metered charging points in shopping malls basement or otherwise. But as an organization, I have already solved this problem three years back by doing three things. Our two-wheelers have lightweight, portable and lithium batteries which can easily be removed and charged just like your mobile phones and then inserted in bike again. You can even keep a spare battery for long distance driving. 

The next step was to create charging stations which we did by partnering with our dealers. We provide free charging kiosks to them to install at roadside shops, whose details are available with the dealer that they share with the customers during purchase. We have also trained some mechanics who run their own business on the road side and provided them boards on which it’s written ‘Hero Electric Preferred Garage Owners’. Even their list is available with the dealers which is provided to the customer. If your bike breaks down, he can do the primary first aid and help you but if not then you can leave the bike with him and he will get it fixed from the main dealer. We have already started implementing them all across India. This year we plan to install another 5000 charging stations and another 5000 PGOs. 

But the ecosystem still lacks behind. What would be your point of suggestion for the players? 

Infrastructure, supply chain, or even manufacturing, anything and everything is a business for somebody. But before starting any business, we need to check where the demand lies. Today the demand for two-wheeler EVs are so less (bikes around 150,000, cars nearly 3400 annually and buses only 600). And hence there is no quantity to create the demand, or the infrastructure or the supply chain to make a business sense. So if someone wants to start a business now, s/he has to think of a return in 20 years or start for a social cause. Hence the need of the hour is to create a demand. 

What I would suggest is picking those 20 most polluted cities in India where it makes lot of sense to have EVs. The industry and government need to come together to put huge density of electric two-wheeler and cars in these cities, which will then make sense for the vendors and infrastructure. Hence the demand has to come first and other things will simply follow. It is really easy to create the demand if the government and the industry work together. The government doesn’t have to spend extra money for it as it has already allocated 10,000 crore for incentives but the sad part is that it has not been utilized by anybody as the government has made it extremely difficult. On the other hand, these incentives are only meant for high-end and premium vehicles and equal performing vehicles which costs around 1.5 lakh. Even after subsidizing, no one is buying them.

Hence the government needs to do a little bit of thinking on the policies and extend the subsidies to the affordable two-wheeler categories also. The beauty of it will be that these 10,000 crore subsidy will be utilized within just two-years and we can see more EVs in the market. Even if they don’t want to spend more money, they can just mandate. For example there are nearly three million petrol two wheelers used for deliveries/courier services. The government can mandate them to use EVs. This is just one example. Together industry and government can do much more. 

Another area where we need to work is creating awareness among the customers especially outside of the tier I cities. We have to apprise them. Taking another instance of the government’s LED initiatives, they can similarly launch a massive apprising program for EVs too under the Swatch Bharat Abhiyaan umbrella. 

So on awareness, on mandating businesses to convert to electric, on adoption of EVs by the government themselves and on re-directing the incentives to where it matters, these are some steps which can help create huge market for EVs in the country. 

You have been in the industry for long and have experienced the downfall and the ups. What would be your suggestions in terms of marketing EVs? 

Industry has an important role to play. I believe that it is not a game for small timers or fly-by-night operators. Despite being an electric vehicle, it’s an automotive product and hence needs to be handled by the automotive companies. You have to have big organization, big systems & processes, service centres, workshops, huge dealership and more. And if people doesn’t have huge manpower, just having great strategies alone won’t work. 

But large players who already have the resources need to enter the EV space and create more demand. I am happy that larger players are entering the industry although they are entering in a very small way. I believe that they would taste success soon if they expand their horizon. According to me every automotive company making petrol vehicles should also make one part of their portfolio as electric. The day it happens, it will create a huge portfolio of consumer choice, and that is the time these fly-by-night players will go away. But the industry has to wake up. They can’t sit quite on it. They have huge money and huge profit and hence they have to start it seriously. I believe this will start in next three-four years. Once the choice expands, the awareness will also grow. 

When this happens, automatically the infrastructure and the supply chain will also strengthen. The government will also be eager to jump in. 

Do you see startups coming into this space? 

Of course, startups with big money can make business to a certain extent but then they have to grow their mindset just like running an automotive company. Startups if remains an entrepreneurial venture will never grow as an automotive company. Either they have to align with an automotive company or they have to graduate to be an automotive firm. Unfortunately our startups are not doing this and hence we will not see much startups succeed in this sphere. 

Hence I believe that if startups align with the giant automotive companies will make a good business sense for them rather than startups doing it alone. They can do a very good business in peripherals as EVs have lot of potential available outside the vehicle. For example infrastructure, IoT, smart connectivity, data analytics and electronics support startups. 

Advice to the entire automotive industry? 

Industry has to also pull up its socks. COVID has sensitized the customers on the benefit of cleaner and greener environments and then this opens up an Pandora of opportunities for the automotive industry to jump into the EV segment. It’s time for the industry to take a leap of faith and invest heavily into the future and take a bit of business risk. But the industry is not doing that. I believe that all the big players who have the future in this industry cannot wait for the future to come to present but take leap of faith so that there are better products, better offerings, best of technologies and align with localization and Make in India, which will push the ecosystem and infrastructure to kick start. 

Hence the industry and the government has to come together to create an environment in the next couple of years and nourish it. Even the state policies are framed to attract manufacturing into their state but they should be keen on creating demand and then manufacturing. India is infamous for being one of the most polluted countries in the world, and it’s a national agenda which the government needs to take care of. 

Let’s take a look at your personal side and know Sohinder as a person. 

I have been all my life a two-wheeler guy and have worked with almost all the two-wheeler companies, hence it is in my blood. But this is something I was waiting for as a passion and wanted to do something for the society and not just for the business or family. And when I got a change 13 years back to merge into the EV segment, I realized that this is the time that I can contribute to the larger society. 

I get a lot of satisfaction with this association.

Hobby? 

It’s a difficult question because once you reach a level of handling a business where it is always firefighting which needs so much of attention, whatever hobbies you have are shelved. But during the COVID times as we have been working from home all the time, I could get time for my most favourite hobby, i.e. gardening and this is what keeps me grounded. My roots are also in farming, my grandfather and forefathers were all into farming. I always used to enjoy my time on the tractors or in the tube well. So those days are now back in a small way through gardening. When I sit there, I feel I am talking to the plants and getting the nature back into my veins. 

How about cooking?

Ya, but only baking cakes and have never tried beyond that. But yes, I have tired cooking omelet sometimes. 

Favourite cuisine? 

South Indian anytime as it is simple to cook, fermented and easily digestible. 

Favourite sports? 

Badminton. COVID has brought some good things back and this is one of them as I play along with my family apart from the aerobic exercise and yoga. 

How do you spend your family time and what is your mantra to balance work and family? 

Having family time these days aren’t an issue as we all work from home. But in normal situations, it is difficult to find quality time with family as both my daughter and son have startups. So we find time at the dinner table together and exchange thoughts or talks about the day. Small in amount but rich in nature.