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Frank Muehlon, head of ABB's Global Business for Electric Vehicle Charging Infrastructure, says the battery-swapping concept will not be successful in India and will rather add to the complexity. In an interview to ETAuto’s Nabeel A Khan, Muehlon also reveals that the company will soon start manufacturing EV chargers in India. Edited Excerpts:
Will the current developments around electric vehicles encourage more actions from ABB in India?
Yes, from our side, we see a lot of action in India.
You have seen the transition to EV around the world. How do you see this transition shaping in India?
What we see in any mobility going forward is a very regional play. India is now really at an early stage when it comes to e-mobility. We have quite a good base of 8,000 DC fast chargers deployed in about 68 countries. We have a strong base in countries which started quite early on e-mobility. So, for example, Norway, the Netherlands, even California in the US are countries (or provinces) which have adopted early. India is a vast country and offers a big opportunity.
If there is one country or market which could be a role model for India’s transition…
I would not compare one country with the other. Each and every country is different in terms of e-mobility. You do not simply introduce e-mobility overnight. You transition from where you are today. So, it's disruptive but, it’s not that with e-mobility you change everything immediately.
To make e-mobility successful, you need to have a few parameters in place, you need to have the right cars, right grid, charging infrastructure, right energy mix in terms of renewable. It all goes together. So, it will be a mix of a lot of market trends.
Success of EV in China, Norway and other countries are largely perceived to be because of subsidies. How do you view this? What India can learn or take back from these markets?
China is, of course, without a doubt the largest market in e-mobility in terms of cars, infrastructure. China made this policy (subsidies) to leapfrog in technology with e-mobility beyond the combustion engines, so to put that in place, they put a lot of subsidies in place to install infrastructure and to bring the right cars on the street.
Whether this is good or bad, I don't want to judge, but this is how they did it. And now we see it quite successful in a couple of cities. Take Shenzhen for example, 100% of the buses there are electric buses, taxi fleets are electric, so a lot of ownership of electric vehicles in China is driven by fleets. It’s not so much private ownership yet but it is about to come.
For sure this incentivization which the (Chinese) government did, helped to get it going. Now it needs to move autonomously. Now, whether this is a good policy for India? There is a different way of doing it. Norway also started a lot with subsidies and then reduced the subsidies. Norway also lives a lot on renewable energy which is a completely different mix of energy than China.
Just to put electricity without having the renewables behind doesn't make sense. Because we have to look around the overall value chain of energy generation and consumption.
A large part of India’s power generation happens through fossil fuel, so with EV is it not a mere transfer of pollution rather than eliminating it? Further, there is a lot of progress in the development of internal combustion engines. They are becoming cleaner. How can India deal with this?
There is a good question. It only makes sense to transition if the whole chain works. If you burn fossil in order to use this electric energy and have high energy costs for producing that car and battery in the first place then at the overall bottom line, you didn't save any energy. The only thing you then do is you put the CO2 and the Nox emissions out of the city into the place where it is generated.
Again, we are talking about the complete ecosystem and now the question is where to start. If you say we do not want to go electric because everything is on fossil fuels, so where do you start. So, continue to build, reduce fossil fuel, go more to renewable and at the same time start building electric mobility.
Lithium-ion battery cost has been reducing very quickly (from $1,000/KWH in 2010 to $200/KWH now) while the cars with cleaner IC engine with high technology are getting costlier. Do you see the acquisition cost of IC engine-powered cars and electric cars reaching the same level?
I really see that in the future. And again, I would like to look at the whole system. If you only look at the cost of the battery, the $200 you mentioned, there is a lot of prognoses out there. There is an analysis out there that says the cost of ICE vehicle to a BEV vehicle will be around the same, for midsize cars, roughly by 2021-2022.
So, this is a prognosis on the pure purchase price for a consumer of the midsize sedan vehicle. But I would say, we are already there because I look now at the complete ecosystem and if you are a taxi driver for example and now assume you drive taxi as an EV so assuming that, by the mileage you have and by the maintenance cost you have, you should already below the ICE engine today.
In India, we talk about the unavailability of charging stations when it comes to infrastructure, but don’t you think the grid also needs to be ready to support this?
It needs to be made possible if you want to drive that forward.
Looking at the buzz around EV, what kind of investments are you going to make?
We envision that India as a subcontinent with 1.2 billion people is a market on its own. We also see that the requirements here can only be fulfilled if we do it locally. So, we have a clear plan going forward on putting local charger production facility here in India either by the end of this year or early next year. I can’t disclose the number but suffice to say we are funding that.
Where do you see India featuring on the global roadmap of ABB? Do you think India can be among the top 10 markets?
If I look at the figures today, I think we are quite well positioned in India in a couple of segments. So, just to take solar for example, it’s a very well-established segment in India. If I look at e-mobility, I can't expect India right now on my revenue map but what we just discussed going forward, I see big potential in India and we want to be positioned to really grab that potential. We need to make the ecosystem fly.
Are you still not convinced with announcements coming from the government around EV?
I have no doubt. What we see in policies needs to be transferred to the industry and needs to be invested in. So, what we need in the whole ecosystem is the car manufacturers, the OEMs to bring the right car. E-mobility depends on how speedily OEMs bring the cars.
The other thing is grid enforcement. For chargers, you need to put right grid behind and people need to put the charger on the ground to operate them. So, again you need entrepreneurs who start doing that. Overall, I have no doubt that this will happen.
What kind of electrification penetration do you see globally?
If we look at a global scale right now, we see about 30 percent of the new vehicles by 2030 to be electric. But there is a lot of uncertainty still out there and volatility of this figure is high.
Do you think India will be matching this number?
It’s a global mix. If I talk about India and towards the vision that is out there, if that will be enforced with some policy like tax reduction, the premium line to drive, if this is placed in combination, I think that could be a realistic target.
What are the top three policies India should do to speed up e-mobility?
I think what needs to happen is that the whole EV thing will only work with grid enforcement. So, this grid side and utility side are much closer to the government, so if this enforcement is supported, this will help. The other thing is on the individual side.
Because whatever you do in politics is one thing, but in the end, it is on the individual to buy the car. So, as long as the EV is expensive, we need to have some incentive to make that happen. Tax reduction and incentives will push e-mobility in India.
Do you think battery swapping will work in India?
I will give you a very blunt answer. I don’t think it will work in India because battery swapping won’t work. It is a complex option for India. Swapping concept is nice when you are driving somewhere you can swap and you continue. It looks nice for the first moment but if you look at the swapping station, the battery has to be charged, so it just adding one more level of complexity.
But battery swapping helps in dealing with the most important factor, that is acquisition cost?
For the cost, you don't need to swap. There are models like what Renault did. They sold the vehicle and leased the battery. Companies who did swapping didn't work out.
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