A new world order?
9th Feb 2019 8:00 am
Shapur talks about how the advent of electric cars will affect the Indian market and major carmakers worldwide.
Unless you’ve been hiding under a rock, you’ll have noticed that the automotive landscape is fast changing. Technologies we’ve long taken for granted are slowly but surely making their way into the mainstream. And the day isn’t too far when we will switch from one type of powertrain to the other.
What I’m talking about here, of course, is the electrification of the car. Forget range anxiety, forget charging time, think nothing of battery replacement. Once the cost of the battery comes down, the automobile industry will change tack with lightning speed. And that, in truth, will be when the musical chairs begin.
We in India may be insulated for a bit. We are still a developing country and don’t quite have the purchasing power to go all electric. And with affordable electric cars not expected to hit our showroom for at least a decade, the status quo in India is likely to carry on for a bit longer. Still, there’s little doubt, a change in pecking order globally has already begun. Remember, despite its recent troubles, Tesla’s market cap is right up there among the top five carmakers.
The ones who will be affected the most when the electrics goes mainstream will be the Japanese. Currently masters of piston engine tech, no one has or is likely to ever make engines that are as dependable or as reliable. This is a competitive advantage they’ve held on to for decades. It has helped them conquer the largest car market in the world, the US, it has held them in good stead in markets around the world. And even back home, a large part of Maruti’s and Toyota’s success is due to the bulletproof reliability and efficiency of their engines. This is why it is the Japanese who are pushing hybrids so hard here. It really is simple; the greater the mechanical complexity the greater the advantage they hold. It’s another matter entirely that hybrids are exactly what we in India currently require.
And let’s not forget, once the car industry goes all electric, somewhere in the distant future, it will sort of level out the playing field. And then it will be carmaker that best stirs your emotions who will float to the top. What would you drive if both were equally reliable, a Toyota or an Alfa Romeo? And what if Volkswagens were as problem-free and as affordable as Hondas?
Electric cars will also play right into the hands of low-cost operators, think Chinese carmakers. And who’s to say Tata and Mahindra won’t be big beneficiaries as well? They will have to get their act together of course, but even now Mahindra has a massive headstart with its racing exploits and Reva. And let’s not forget Tata, with TCS, has immense engineering depth. And can you really discount the most efficient carmaker today, Toyota. It will be a fascinating race for sure. One thing’s for sure – there’ll be plenty of new players at the top.