Don’t set illogical pricing
Currently, petrol rates are hovering at around Rs 80 or more in some cities. Based on this atrocious rate, we have made the following calculations:
- The cost of operating an ICE car after 4 years is around Rs 3,06,640;
- The cost of operating an electric car after 4 years is around Rs 39,000;
- The cost of operating an ICE scooter after 2 years is around Rs 36,600; and
- The cost of operating an electric scooter after 2 years is around Rs 3,400.
For an electric car, battery replacement costs only need to be considered after 8 or 9 years. For a lithium-ion electric scooter, battery replacement costs only need to be considered after 5 or 6 years. So, these numbers were not factored into the above calculations.
I have mentioned this data for a very important reason. You always need to look at the total cost of ownership over many years for both ICEs and EVs. If you do that, EV's will always win because of the low cost of operating them.
However, the Indian consumer will always look at the sticker price. You can’t expect him or her to make crazy calculations. EV enthusiasts will do it, but 80% of consumers won’t bother or even know how to do it.
So, if you release an electric car in 2013 at a starting price of Rs 7 lacs, it is illogical to sell essentially the same car in 2018 for Rs 8.5 lacs or sell an only slightly upgraded version for 10.5 lacs. And don’t forget that back in 2013, there were no incentives, whereas now the government is offering a subsidy. Battery prices are also supposed to have gone down over the last 5 years.
So yes, I’m looking at you, Mahindra Electric. This kind of pricing is highly illogical!
The Ather S340 and S350 have created a lot of buzz about EV's, and for good reason: they are fantastic products! But again, the starting price here is Rs 1.09 lacs for a scooter that has a range of 60 km per charge.
Then there is the Ather One plan. This subscription service entitles customers to free public and home charging, periodic maintenance that is inclusive of consumables, breakdown assistance, and unlimited data services for the vehicle’s dashboard at only Rs. 700 + GST per month.
Why not have an ‘affordable’ Ather S150 with a 800-1000 watt motor, 60 km range, and fewer tech features?
So, on the one hand, you have the e2o Plus P6 at 8.5 lacs and a Hyundai i10 Grand Petrol car at 5.5 lacs. Then, you have the Ather S340 at 1.09 lacs and a Honda Activa Petrol scooter at 60k. It would be impossible to convince 90% of the population to pay extra and they won't bother to look at “total cost of ownership” calculations.
Nevertheless, there are companies that are launching lithium-based EVs and are trying to compete with ICE vehicles, such as the Strom electric car, which will retail for 3.5 to 4 lac rupees; the Okinawa Ridge+ (Rs 69,000) or Hero Electric’s e-Scooter (Rs 75,000). These are the few good examples with reasonable sticker prices.
Here’s what Spock has to say to the EV industry:
Stop this marketing nonsense about EV range
But over the months, dissatisfied customers started complaining that the company had engaged in false advertising; many of them could not even get 100 km range per charge.
I honestly believe that what Okinawa did was detrimental to the entire EV industry. This strategy of instant ‘brand recognition’ without any long-term insight is very illogical!
Okinawa is not the only culprit here. The Mahindra Electric e2o Plus P8 model claimed to offer an impressive 145 km of range on a full charge. As a classic e2o owner who only gets 100 km range per charge, I admit I was a little jealous. But after a few months, after listening to customers’ stories about efficiency issues, we learned that the P8 can only provide around 110 to 115 km per charge under normal driving conditions.
You’ve all heard this excuse: "You will get X km range when driving in standard test conditions.”
This excuse needs to be put to bed. Misleading consumers using fine print is no longer an option.
Mr Chetan Maini designed the classic e2o, a fantastic electric car. His company, Reva, claimed to provide 100 km range per charge. However, many of us in the EV community were delighted to get 115-130 km per charge while driving efficiently even with the AC on. Without the AC on, on flat roads, a veteran EV owner in our community, Captain Sanjay, was able to obtain 170 km out of his e2o in a single charge on flat roads! Now that’s value for money!
Then there’s the made-in-India OREVA e-Scooter sold by Ajanta. The company does not make tall claims. It says you can get 60 km range per charge, and in real-world conditions, you may get anywhere between 55 to 65 km per charge. This is not a major deviation from the claimed range because the actual range may vary depending on driving habits, ambient conditions, and battery health.
EV companies should be pessimistic in their range marketing. Getting more for less is what delights customers.
So Spock says this to the EV industry:
Build a holistic charging infrastructure that solves the limited range problem of current EV's
Most of these companies are applying for government tenders and supplying AC and DC charging equipment to consumers. Some are supplying chargers to municipal corporations for electric buses and tying up with automakers as OEM partners to supply chargers in bulk.
I applaud these businesses for investing money into the EV ecosystem and obtaining some incredible charging equipment for India. But these companies seem to care only about making bulk sales. Short-term profit making appears to be the only motive of these companies.
However, if you’re making money doing bulk deals,
- Why not create holistic infrastructure?
- Why not electrify certain highways as proof of concepts?
- Why not talk to members of various state governments to implement local state-level policies that will provide a strong business case for setting up charging stations?
You might not make money now, but your "brand" value will increase, resulting in more recognition and money in the long term.
So who will create a holistic infrastructure that can be used by EV owners?
Back in 2016, PluginIndia and the EV community members created an app with community charging points. We also electrified certain highways. Many EV community members use this app and plug in at community charge points so that they can drive about without worrying about range. Now OEMs and grid companies too want to list their charging points on our app. For example, Bescom, Bangalore’s electricity distribution company, contacted us to list its DC fast chargers on our app. Pune’s Mahavitaran too has started listing its DC fast chargers on our app.
I should also mention a few companies that are looking at the infrastructure issue differently and are putting in the effort, thought, and money to support and create holistic EV infrastructure in India.
Ather Energy’s AtherGrid
AtherGrid is basically an extensive charging network. Starting with Bangalore and expanding to 30 cities, AtherGrid will offer fast, reliable, and safe charging for all electric vehicles, not just Ather vehicles. What we love about the Ather Charge Pods concept is that all of the devices involved are made in India by the team at Ather, and these pods are intended to be open to all EVs. I also like that Ather is tying up with existing businesses to set up Ather Charge Pods. This verifies our oft-repeated claim that electricity is all around you; you just need to tap into it.
A couple of other companies I would like to mention are Magenta Power, an EV charging infrastructure provider, and MassTech Controls, which manufactures AC and DC charging stations. They are actually investing the money to create smart and safe AC and DC charging equipment that will allow people to travel quickly and conveniently between Pune and Mumbai.
So Spock says this to the EV industry:
Support your dealerships
Many EV manufacturers face issues managing dealerships, and many EV dealers have approached us and they complain to us about the treatment they receive from manufacturers.
This is what we have to say to EV manufacturers:
- Don’t look at dealerships as an opportunity to unload inventory and forget all about it.
- Don’t send stock that has issues. Your dealers don’t want to firefight and fix your problems. They need to focus on selling EVs.
- Provide spare parts and constant support. Many EV dealerships complain about not having parts available; sometimes, it takes months to get spare parts. This has to change.
- Provide a marketing budget to your dealers. Many dealers complain to us that they receive no help from manufacturers regarding promotional activities. Remember that you are selling an electric vehicle, a paradigm-changing product, and your dealers will need to change people’s mentality and provide a lot of education to make a sale. This is hard. Support your dealers with this.
- Provide training to dealers to fix common EV issues. Nowadays, dealers are selling lithium-based EVs. Are the dealers prepared to test and diagnose the batteries, controllers, and other electronics? Can they replace a cell in a battery pack and get the pack to the customer within a short period?
So Spock says this to EV manufacturers:
The Indian EV industry has come a long way over the last 5 years. Back in 2013, we only had one 1 electric car option and only low-speed lead-acid-battery e-Scooters. There were no commercial electric vehicles, no electric buses, and no DC and AC charging infrastructure.
Now, we have multiple electric car options, and by early 2019, we can expect MNCs and Indian automakers to launch many new EV's in India. We already have many lithium-battery-based e-Scooters. We also have commercial electric vehicles and electric buses in our cities.
Our government has pushed for EV's, and the industry has acted. We are seeing changes despite some illogical steps taken along the way!
So, I say this to the EV industry: great work so far, but there’s a lot more to be done. Just follow Spock’s advice, get rid of all the illogical steps, and watch the industry thrive!
Live long and prosper!