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India needs radical measures to accelerate the transition to electric vehicles, but this transition will cause major economic problems, said Anand Mahindra, whose $ 20 billion Mahindra group is one of the most important car manufacturers in the country.
Mr. Mahindra, whose group gained a foothold in the burgeoning electric vehicle sector with the acquisition of Reva in 2010 and a partnership with Ford in 2018, embarked on a debate on how the government Prime Minister Narendra Modi is expected to continue the change.
"This transition will cause a huge economic disruption in the value chain," Mahindra said during an interview. "There was huge collateral damage during disruptions. But that has never been the reason for not looking for the disturbance. "
Authorities have previously suggested that all vehicle sales be electric by 2030. However, in recent bills, reviewed by the Financial Times, the government's internal think tank has proposed to accelerate this delay by requiring that all three-wheeled vehicles, namely the Indian ubiquitous system Taxis-rickshaws – sold after 2023 are electric, with scooters and other light vehicles with two wheels making the transition to 2025.
Mahindra said the government needs to be flexible about its goals. Electric vehicle sales in India are currently negligible, accounting for less than 1% of the automotive market. Electric cars represent 2% of the Chinese market and nearly 40% in Norway.
"An industry that invests heavily in today's ecosystem and value chain will naturally have some inertia," said Mahindra. "If the government does not signal that it is the direction in which we want you to go, and you have to act very quickly, that sense of urgency will no longer be there."
Analysts at broker Kotak Institutional Equities, however, expect that less than 30% of Indian cars will be electric by 2030.
Fuel-intensive sales continue to be Mahindra's core business, ranging from farm equipment to resorts to resorts to non-bank financing. Mahindra is the world's largest supplier of tractors in volume. Its automotive division sold approximately 10,000 electric vehicles during the fiscal year ending in March, compared with approximately 600,000 conventional vehicles.
The company has developed a range of electric vehicles, including two rickshaws, the Treo and eAlfa Mini, which it seeks to establish as next-generation fleet vehicles. Last year, it also reached an agreement with Ford to develop more electric vehicles.
Indian government urgently promotes electric vehicles to reduce air pollution in cities – the worst in the world, according to the World Health Organization, and reduce the country's dependence on oil imported.
The government has proposed a series of measures to accelerate growth. On Friday, Finance Minister Nirmala Sitharaman proposed cutting the electric vehicle sales tax from 12% to 5% in India's annual budget. "Our goal is to take a leap forward and consider India as a global center for electric vehicle manufacturing," she said.
In March, the government announced $ 1.5 billion in subsidies for electric vehicles for the next three years, more than ten times the previous amount.
Authorities have allocated the bulk of these resources to two- and three-wheeled vehicles, as cars are still out of reach for most Indians. According to the SIAM industrial group, two-wheelers represent 80% of the total automotive market.
Mr. Mahindra said that his group's first investments in electric vehicles would bear fruit, despite the upheavals.
"When we bought Reva, we made fun of us. [People] said: What are you doing? Does it still pay? 'No, but is it going in that direction? Yes, he says. "We have seen this future come."
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