View from India: SUVs and EVs give new dimension to mobility

Tesla Inc has indicated that it plans to expand into the Indian market, which is among the biggest emerging car markets in the world. If the taxes on import duties are lowered, Tesla Inc may set up a factory in the country. Whether this will happen remains to be seen, but what needs to be noted is that the global auto maker has perceived India as a destination for electric vehicle (EV) investments. EVs have gained traction in India – leading companies such as Kia India, Tata Motors, Mercedes-Benz India, Audi India and Maruti Suzuki India have plugged in their EVs in the country.

In retrospect, having an electric car was like trying to maintain a white elephant: EVs were priced high and hardly offered fuel efficiency. Given the proliferation of EVs, it’s obvious that this perception has changed. It could improve further as the country is committed to sell only EVs by 2030. The government is clear cut in its aim to generate energy from non-fossil sources. Fuel-efficient mobility encourages the build-up of a skilled workforce in its manufacturing, and EV battery technology can itself be a revenue churner and open up new vistas in the software and hardware development, besides generating employment.

Infrastructure and energy ecosystem need to be fully supportive for mass adoption of EVs. EVs can take off in a big way provided they are backed by public charging infrastructure; the government is working on the establishment of electric charging stations along the highways.

The domestic production of EVs has been incentivised, with tax benefits also available for buyers of EVs. The goods and services tax on EVs has been lowered from 12 per cent to 5 per cent.

Coming to the electric two-wheeler segment, OLA Electric Mobility Pvt Ltd, Ather Energy and Mahindra Electrics have manufactured electric bikes and scooters for Indian consumers. The government has unrolled initiatives for electric two wheelers as well – the announcement has unlocked the hidden potential in the two-wheeler sector. Under the automatic route, 100 per cent foreign direct investment (FDI) is allowed in this sector, meaning that foreign investors as well as foreign auto companies can forge ties with Indian auto makers to manufacture two wheelers. The country is home to electric two wheelers.

The FDI announcement can add a new dimension to the two-wheeler space. It can lead to exchange of ideas and even open up R&D opportunities. There could be indirect benefits from this. The pandemic has shrunk the office space-mall segment footprint: the establishment of large collaborated auto factories to mass produce EV two-wheelers could improve the real-estate footprint.

E-mobility contributes to the low-carbon economy, besides reducing India’s dependence on oil imports. It also encourages the domestic production-manufacturing of vehicles, which, in turn, enhances the Make in India programme.

Given that a slew of EVs are entering the auto space, it’s likely that there is scope for automakers to produce EV models with different price points. It can hopefully become a mainstream choice.

The clean-energy drive is also supported by hybrid vehicles. Though both are green variants, hybrid vehicles are different from electric vehicles. A combination of internal combustion engine and electric motors power the wheels of the hybrid, whereas a single source of the electric motor steers the EVs ahead. Companies such as Honda, Volvo, Toyota, Lexus and Porsche have strengthened their position in the hybrid vehicle space. 

Driving on, SUVs (sports utility vehicles) seem to have a wider adoption than before and the auto industry has witnessed a spate of launches in the space.

Alcazar, an SUV from Hyundai Motor India, has been making waves with the company recently announcing that it has received over 11,000 bookings for is new variant. Other SUVs are from leading auto manufacturers such as Skoda India, Mahindra, Audi and Volkswagen, among others.

The fact that these tall vehicles are being launched in the country is indicative that India is a market for SUVs. There was a time, not so long ago, when young athletic men chose to drive an SUV as it suited their suave personality. Then there were those who lived in farm houses away from the city or those on long work commutes; they had no choice but to opt for an SUV to navigate rough and long drives. In short, the consumer profile of SUV was specific and limited. This has changed: the consumer profile of the SUV user has grown and diversified to include men and women across age groups. It’s only logical to steer into the world of SUVs and find out how these rugged machines found a wide acceptance. 

Like the luxury sedan, SUVs are aspirational and a status symbol, though that’s probably where the similarities end. To put things in perspective, we need to go back in time: around 15-20 years ago, SUVs meant tall vehicles that were big on the pocket too but the styling-manufacturing of the muscular vehicles has undergone a change. SUVs now include sub variants that come within the Rs 10 lakh bracket. Along with the mid-size, full-size and premium options, there are compact SUVs that are pocket friendly for the budget buyer. The arrival of multiple SUVs on Indian roads reinforces the consumers’ desire for these feature-rich vehicles. Generally speaking, they are loaded with a two-zone HVAC (heating, ventilation and air-conditioning) system, sunroof, turbo petrol engine and an automatic gearbox, and some offer a dual-zone climate-control option as well.

SUVs pack in quite a punch. The turbo-charged cars are sturdy enough to navigate all sorts of terrains, along with waterlogged roads. It’s a top-notch feature, which is technically known as ground clearance, where those at the wheel sit higher than they would in the low-seat sedans and hatchbacks. This gives a good view of the road and helps in manoeuvrability, increasing the security quotient besides giving passenger comfort. Large Indian families and travel-by-road junkies opt for SUVs given their wide luggage capacity, spacious legroom and comfy seating capacities.

A diverse range of SUVs and EVs are expected to grace the roads of the future.