Electrification of passenger and freight transport is an unchanging trend:

Tata Motors has recently unveiled the electric incarnation of its most popular small commercial car Ace. The company said it has already booked 39,000 orders from top e-commerce players. India’s largest commercial vehicle manufacturer aims to transform commercial vehicles with various technologies to achieve the country’s net-zero goal by 2070. Deepangshu Toumara of Express Mobility contacted Tata Motors Executive Director Girish Wagh to understand his first and last-mile mobility and his vision for use in a variety of commercial vehicle applications.

Edited excerpts …..

CV as a segment is one of the most diverse segments because there are different applications in different tones. And then you have buses, then small commercial vehicles. What kind of applications will have what kind of technology and what is your vision for the next 5 years?

We are working with IC-engine. Among the IC engines, we are working with diesel, petrol and natural gas. Our bets on natural gas actually helped us last year because of the sudden improvement in natural gas penetration and it helped us gain market share.

Then we also bet on battery electric, which helped us to be the first mover of the bus and get good order.

Battery Electric Another example is that we are also working with fuel cell electric because the current thinking is that batteries will have a limitation for long range and so could be fuel cell technology and so we bet there. So, we are working on the basic technologies and taking those technologies to a certain level.

Once those technologies are ready, we spend a good deal of time on applications in parallel with customers understanding the tariff cycle and deciding which app, which technology will make sense. And then place that technology there.

So far, natural gas and batteries seem to be leading the way in the number of electrical applications where they can be installed in addition to diesel IC engines. And that’s what we’re doing, but fuel-cells can also be a very promising technology.

It will have to go through its birth bank, because lots of technical engineering input to prove that technology and optimize it for truck and bus applications and then we will prepare it.

What is the total addressable market for small electric commercial vehicles and how do you see it in the next few years?

The market is in its infancy. There is no doubt about it. But I think as a country, we have decided to be net-zero by 2070. This means that there should be no CO2 emissions or emissions in that particular year. You have an offset, which is more than the rest of the emissions. In order for this to happen, let’s assume that the lifespan of a commercial vehicle is approximately 15 years, at least 15 years before your tailpipe emitting vehicle should be manufactured.

I think the road map has been fixed. Electrification of passenger and freight transport is an irreversible trend. We have to work towards that goal. We have to do something to change the pace, I would not say, wait and see, but not just for our convenience, we have to drive it.

As they did in the case of this e-commerce site.

One could have paused to say that it would take some time for it to take effect, but these people worked towards it to make it happen and to bring TCO equality first. The same thing we have to do. We used to do the same thing on the bus. CESL came up with tenders for more than 5,000 buses.

And the scale that it was, we decided to take it aggressively and over a period of more than 10 years at Delhi Transport Corporation we gained a lot of hard work and knowledge and came up with a very optimized and aggressive bid that helped us become L1. It is our responsibility, at least in part, to ensure that the tender process is in full swing. We have to run that. This segment is growing.

You can Take a look at the day-to-day operations of an e-commerce delivery vehicle in terms of average kilometers driven and charging?

We’ve been collecting data for years. Typically in an e-commerce application, it averages about 80 kilometers, this is the range where they work. When we looked at the duty cycle, we realized that it was not just 80 kilometers, start-stop driving habits and all that. In that sense, the cycle of duty is more or less defined around him.

We decided on an optimal level and we said that in a single use, we should be able to deliver at least 110 to 120 kilometers on a single charge.

We further understand that many customers have the opportunity to earn more, if they can recharge the battery within days. And so, a fast-charging solution has also been offered in the car. Although the average is between 80km and 100km, there are customers who can go up to 150km.

And in practical-use, you don’t know what range you have, so you give that feature away and make it more fungus-friendly and flexible for the customer to earn revenue from a very low operating cost structure.

What Ace did in 2005 and how it transformed the last mile of logistics is by revenue model. This is the same solution we are putting in 17 years now, the world is not cold. And that’s what we put in the car. And that’s an advantage we see in three-wheelers and others overall because they don’t have the capacity to charge so much, they run at a range of 50-60 kilometers a day. The e-commerce industry actually works in volume.

It does not work by weight. The volume advantage that comes with Ace EV is range advantage, variable duty cycle and range flexibility. I think we have a good price offer.

How to charge Ace EV on a daily basis?

At home customers can use normal (slow) charging. And when we work with e-commerce customers, we realize that in any geography, in fact, if you look at Last Mile, Flipkart, Big Basket, and Amazon, they’re all very close to each other. And most of these aggregators we call them actually serve all three.

While there may be slow charging at home, through the 5amp socket, where there is a fast-charging facility, if, if it is kept in a local area, they can quickly charge and provide. This is a solution that you evolve from hub to hub, depending on the duty cycle that it conducts.

That is why we are working with Tata Power. And there are some other players who are in this business of providing charging facility where they are going to set up these things in sync with customer requirements.

The question is actually a concern because the drivers of these vehicles live in certain areas including parking and slow charging will be a problem.

I think the ACE EV is probably one of the unique solutions where your car has an onboard charger. Then you have the option to use ordinary AC / DC current. Convert it to DC to charge the battery. This is a slow charging, which you can do overnight, or depending on the needs of your range, you can charge it for three hours, two hours. But if you also have a solution, which is fast DC charging.

You can charge from 10 percent to 90 percent in 90 to 120 minutes. If the need is only for 80km, which we are providing like 120-130km, depending on usage and everything.

It actually exceeds the requirements. The solution allows customers to charge their car anywhere with an on-board charger provided in the car, or if you have a charging infrastructure you can charge within 105 minutes.

Will Tata Ace EV be available across India or in metro cities?

We are going to deploy according to a phase. At the moment, the Focus e-commerce player and the demand that has come up today, we are also pleasantly surprised. Even in the e-com segment, we go from city to city. And in the city, we have to go up by the hub. In parallel, there are a number of other applications that will team up with those customers and build those applications as well.

Do you see it as a purely B2B game, since you’re talking about Amazon and Flipkart, Big Basket, or will it be B2C, or maybe it’s a mix of both?

Both. In the beginning, it’s more of a B2B to build capabilities, which we’ll also place in B2C.

How do you deal with the challenges of EV financing, resale value, EV depreciation cost?

What these guys have done is they are not just communicating with customers or suppliers. They have even been in contact with financiers over the past few months. They would collect inputs from customers and relate them to financiers. Then the financiers are brought to our development center. They are shown the product, the product’s capabilities, what kind of validity the product has to go through, what the battery life is like and a few more things to build confidence in their minds.

Therefore, we had almost all the financiers of the commercial industry present at the launch. And all of them were quite positive at the time of departure and said that we would bring a special product for e-financing in the commercial record. I think I must say that the preparation has been done very well.

But of course, I think the death penalty is always a long-term thing, you have to excel on a daily basis. We have to continue like this. And I think the placement of these vehicles in the segment should be successful.

And will we also see a passenger version of it?

We continue to study all applications. In our view the application that is more suitable for electrification can achieve TCO parity in the fastest time. We will look at that application first.

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