Is This India’s EV Moment?

In the 1990S, India saw The P. V. Narasimha Rao (PVN) influenced opening-up of the Indian market. In the subsequent decade (2001-2010), we saw Indian startups talking of and chasing renewables for power generation. So the buzz words were grids, blades, fans, turbines, CSP, PV and so on. In the next decade starting 2011, the business valuation games played themselves out and Net Present Value (NPV) was the next buzzword. Thankfully, renewables is now a fairly stable industry with large brands and investors bringing in best practices and building on it further. Pricing has also dropped by the day! Hopefully these unit economics are sustainable in the long-run. So India has seen PVN, PV, NPV so far. Will India latch onto EV?

Circa 2021 - Let’s Talk EV Now
The electric vehicle (EV) is a nascent industry in India. Globally EVs have been commercially available for some time, but their popularity has been growing only in recent years. There is a public sentiment for green alternatives to traditional fuels and to move from IC engines. Comforting progress (not but lifechanging pace yet) has been seen in technology development to support EV charging capabilities and efficiency of usage in real-life conditions.

In India, it looks like it’s the race of the fittest and the fattest cashbox (investor). Right from traditional auto brands to ecommerce founders to urban mobility brands to deep-tech engineers – all are in the race. The governments have announced policies and incentives to promote EVs. While there is a lurking perception that it could have been fast-tracked, but for the strong
pushback from the traditional lobbies. In a consumer market with almost no visible respect to alternate-powered-vehicles, and no physical infrastructure for EVs, these are new audacious players who are trying to be trend-setters and global pioneers.

There is much chatter about the EV startups being “yet another kid with large pots of investors’ monies”. Let us not belittle them with “do they understand automobile industry”? It is in fact a strength, if they are not stuck to the incremental-ideas that Indian auto industry has had. The traditional auto manufacturers have been slow to this EV game.

Great Indian Expectation
India is a diverse geography with stratified consumer segments and weather patterns. Most of our urban cities have highly congested and dense traffic patterns. And roads are actually pothole laden or with poorly constructed rough-shod quality. Urban mobility as a concept in town planning, could do with lessons for
all of us. We have grown up with “where most towns exist, town planning did not”.

The traditional distribution model of selling EVs could only see partial success. For the Indian mobility industry has seen multiple consumer-trend-disruptions over the past three decades. It had the “wait for years and pay a premium to get a vehicle of manufacturer’s choice” period before the global major automobile brands entered India in the mid to late 1990s.

The next disruption was the retail consumer financing which altered the access to vehicle ownership and increased the pattern of use-exchange-change-to-new-vehicle adoption. This helped increase volumes of new vehicles sold and also the market size of used-vehicle sales.

The next big disruption on the macro scale will be the belief and conviction of the youngsters, globally. The younger citizens are pushing for transparency of information, making the world a better place and to be inclusive. Call it the bigger ESG moment to roll out. Consumers (especially the younger citizens - call them Millennials, Gen Z) will demand good (looking) products they can be seen taking selfies with; products and companies that would appeal to their sense of “sustainability”; brands whose services could cater to their demand for transparency of information (about the technology / product / brands /companies that serve them). They would want to be associated with brands that are responsible corporate citizens as well.

A-to-I of EV
It is actually a practical common sense approach that would be a game-changer in the race to succeed in the EV space. The platforms that adopt the following learnings have a higher probability to succeed:

Ambition, Arrogance and After-Sales Batteries and Bureaucracy Consumer understanding and Culture Digital and data for driving (riding) convenience Execution - “Everything can’t be done alone” Founder and Financing Go-To-Market (GTM) strategy Humility to listen to consumers Indigenisation of components & IOT Ambition, Arrogance & After-Sales

It is good to be ambitious. It is indeed better to be audaciouslyambitious! It’s like having stretched goals. As long as the early wins don’t make the founder or the core team arrogant, it’s fine. Many times, early wins create a smoke screen of delusions. That could mislead the team away from their stated vision and values.

The other critical aspect in the Indian consumption story is “after-sales” life. In the EV space, much process and concept innovation would be needed to deliver after-sales service(s) and spare-parts functionality. If any EV maker wants to own up to the consumer experience, imagine a small delight of no-questions asked-replacement vehicle if the break-down is going to take some time to fix or cost above a certain value. Or can the EV come with bundled insurance (life, vehicle, health) and bundled financing element? And if the brand is confident of what it can deliver in terms of savings per kilometre usage, then can they offer a programme to take those “perceived-savings” as investments into mutual fund schemes for the consumer?
This is what a design-think of how a collaboration Eco-system can help EV brands offer “contextual-finance” along with “contextual-experience” and to own up to consumers in entirety!

If battery technology and its commercialisation aspect does not improve drastically, the EV industry simply won’t take off! Period! To borrow the old advertising phrase of Hero Honda, we need “fill it, shut it, forget it” type of EV batteries! Long lasting with better efficiency, not expensive to maintain, and yet ecologically sensitive. In the latter aspect, anyone wanting to win the “EV war” would be better off in investing equity, energy and extraordinary efforts in researching into alternative battery technologies using different metals.

Energy-storage technology has seen much improvement over the past two decades. In 2000, the European Patent Office (EPO) had registered 1,029 unique invention patents filed at two or more offices worldwide, a measure known as international patent families (IPFs). In 2018, the number of IPFs had risen to 7153. The battery-related patents outpaced the other patents.

The mobile phone chargers being different for different brands, adds to the consumer inconvenience. EV makers would do yeoman service to the consumers, by collaborating and standardising batteries and allowing for interoperability with other EVs. The bigger capitalist question is, does the competitive pressure to stand out with uniqueness of design of battery pack and to have a disproportionately large share of the market not allow for sharing with others?

Just remember that Volvo invented the three-point seat belt and made it patent-free so that all vehicle manufacturers could use it to save lives! From our home turf, TTK Prestige pressure cooker brand invented the “pressure cooker gasket” that prevented cookers from exploding. And they made it patent-free for the common good of the consumers.

Bureaucracy
Policymakers have to adapt to newer technologies, issues of sustainability, growing demand for cleaner and decongested cities and higher levels of global governance norms. They have to balance fiscal pressures of avoiding incentives and to allowing the industries to bring in cleaner and efficient mobility solutions, including for public transportation. Hopefully we shall see faster public policy efforts, as the world of EV develops.

The internal organisational bureaucracy of EV makers’ matters too. Especially when they scale up, their internal systems should not stifle their processes and time-to-market. Copying processes from other auto majors or conventional industries could just do the same!

Any EV aspirant brand which is in other business lines currently in the market with visible branding, will need to watch
out. Failures, mistakes, consumer grievances of those existing brands would be potential obstacles for consumers to try the new (EV) brand. In today’s social media era, consumers’ angst can be targeted (mistakenly) on the new brand.

Consumer research is not merely a phrase. It has to be a continuous attitude for someone trying to reinvent the way consumers move! In the EV consumer research, the consumer’s perceptions of visual and physical attribute (design, looks, compactness of the vehicle, etc.) of the EV (called visceral emotions) is a critical one. Added to this would be the crucial element of behavioural emotions which are formed by consumers experiencing driving / using the EV. In today’s imagery-led individual-consumption patterns, perceived social and personal “identity” connected to being seen driving an EV would be an important aspect in the EV sales approach.

The ambitious EV brands may attempt to do what Steve Jobs did with Apple to the concept of mobile phones. The factors that worked for Apple were: attention to minutest detail, one of the best global supply chains, consumer was truly queen / king (think “warranties” / “replacements” etc.), regular product innovation to the extent of cannibalising own older variants, and partnering with various external stakeholders instead of trying to do every aspect of the business themselves.

The Indian automobile industry is an incestuous talent pool. Not many outsiders have come into the industry for a long time. If you are reimagining mobility, then too much dependence on the existing talent and their idea pool may not augur well.

The founders of these EV startups would need to be the champions of creating a culture where the combination of global experts can blend with Indian employees. With the same culture objective, they need to have the ability to carry along the right blend of youthful exuberance andexperience-filled-maturity of senior / older employees.

In this aspect, understanding GEMZ (Gig Economy, Millennials, Gen Z) would be important to EV makers. With varying age groups in EV startups that’s aiming to scale fast, you will have to deal with situations with senior (older) talent seeming to be like “pesky parents” to the youngsters, while the youngsters could be seen as “truant teens” and not “toeing the line”.

Constant churn of mid to senior talent and perceived bad work culture as seen in many organisations could be the death-knell of these startups. And in cases of serial entrepreneurs who enter this space, trying to copy what worked for them in their earlier businesses may not work well. The appropriate and dynamic organisation design would be needed. After all, peace time soldiers (steady state organisations) have different capability and style than the war-time soldiers (startups scaling rapidly!) Hire right!

Digital & Data
Digital and data collation from the EV would be a big leap in how consumers will expect newer and predictive solutions during the course of their EV ownership and usage. So many benefits can be offered with the data collated - not just for the consumers, but also for the state machinery in facilitating better citizen benefits and traffic management. Data and driving patterns collected from vehicles can also be linked to motor, health and vehicle insurance.

Of course, the unsaid aspect that the industry needs to address would be data privacy rules. Also adequate planning for cyber protection should be added to avoid hacking in the EV digital systems.

Execution - Everything Can’t Be Done Alone
Don’t try and build everything from components to the EV to financing alone. Learn to collaborate. That calls for culture of openness of sharing and collaborating. No relationship of unequals survives the long term!

Greed to make margins at every consumer touch point and/ the over enthusiasm to be the only knowledge-provider across the life cycle of product usage could prove to be an expensive price to pay for failure.

Importantly, to succeed, there is no alternative to ruthless focus and single-minded execution of plans. Plans and project management have to factor in a margin of error that would happen in an audacious Greenfield project.

A lot rides on the “Founder” and the “Co-founders”. Their situation is surely the case of “lonely at the top”; in their endeavour, many successful pioneer-founders use a confidential-coach advisor as their sounding board. These advisors typically avoid having any conflict as a board member or holding executive roles in the same founders’ ventures. The biggest impact such an advisor can have is at times to protect a founder (using private conversations) from their own follies and fallacies, something which no one in the organisation would dare point out!

After all, successful young founders have not had prior exposure to large scaled organisations which demand different ways of leadership; unlike the cohesive small band-of-boys type of teams in the startup phase. Some of these founders can be mercurial and such behaviour breaks the organisation like a pack of cards. Not all serial entrepreneurs succeed in all their ventures. At the same time, past failures should not deter newerattempts. Past is no indicator of the future.

It’s tempting for those serial entrepreneurs to bring their best folks from their previous or other ventures. Sounds like a great idea but it’s success depends on some factors like if those team members still have the frenzied-energy, conviction about the new business idea, and the hunger yet to change the world!

Successful (contrarians) founders give the “right role and responsibilities for the right person”. It is far better than the conventional HR idea of “right person for the right role”.

Entrepreneurs in their passion to scale up business have to remember to build a knowledge management ecosystem in the organisation. There will be many learnings, hits and misses along the way. Those have to be converted into organisational learnings and not just be a mere anecdote that the founder would recite at a party! So knowledge has to be institutionalised, now!

Financial Ecosystem
Having a wide range of financing options is a critical factor in the decisioning for vehicle ownership. It is also true for the entire value chain - components vendors to distributors to spares sellers to vehicle-experience-providers.

It would be useful to leverage a network of financiers that consumers typically deal with and those financiers who have adept experience in dealing with such consumer cohorts or varying demographics and psychographics. Another important aspect is to onboard only such financiers who are convinced about the EV philosophy and those who can create risk frameworks in their system to deal with it.

The other aspect that’s critical is financing the infrastructure for creating charging units across India. It’s going to be more than just a balance sheet game! For some of the EV brands starting up in India, getting to a SPAC mode of funding could set them up with ample capital to fuel up their audacious goals. And it will also act as a pressure to build a scalable profitable business on time, and with adequate management bandwidth and governance framework.

Go-To-Market (GTM) Strategy
The EV play is a consumer-business play. Right from pre-sales to sales engagement to post-sales processes have to be seen from consumer lens. Not from conventional vehicle sales methods. Imagine having an EV as a video game much before launch. The consumer can try all the driving features in the game and would be ready before the vehicle is formally launched. And the points collected during the gaming could be used as a currency for the vehicle purchase. That could help create a community around the brand.

This is very relevant to any consumer durable brand. EV has to be reimagined as a consumer durable (product plus service). This would necessitate creating a framework in the entire engagement with the consumers in constantly collating their inputs - of both ranges of delight or dire frustration. The brand should have the humility to listen and act, and not just hear! That calls for a relevant culture in the organisation where consumer engagement should be a compulsory KRA for every employee.

The EV’s components have to withstand the Indian road and weather conditions! It not only makes logistical sense to indigenise components, it also ensures a greener-supply-chain to aid the brand’s ESG scores. It would mean building of a local ecosystem of research, which will build world class education facilities as well as brain power. It would also increase employment and entrepreneurship opportunities in India.

In the Fourth IR world, the IOT will provide countless and ever growing possibilities of new products and solutions, for simplifying the lives of consumers and to have them “get more from their mobility”. Any serious EV brand will need to invest efforts in utilising IOT capabilities to constantly bring newer product and service features in their EV.

Mobility will be transformed with technology adoption. The Fourth IR has sufficient tools under development, as well as commercialisation runway to help with it. Reimagining mobility with the lens of how much of digital embrace consumers (can) do will set the design-to-deliver framework. EV mobility won’t just be greener-wheels, it could be life 2.0 (almost like sci-fi ideas of the 1970s).

We need to encourage such of our entrepreneurs to dream and work on larger-than-life goals. And yet not worry about any fear or failure. This could be the ‘Designed & Made in India global-EV’ moment!