The automotive industry is on the throes of a major disruption over the next decade through electrification of vehicles, connected cars and intensification of the use of artificial intelligence. While that opens up opportunities for some, it would also mean existing players would need to adapt and adjust. The challenge for Bosch, world's largest supplier of automotive components, is as big as any. Jan-Oliver Rohrl, Chief Technology Officer and Additional Director at the German firm discusses with Business Today's Sumant Banerji the shape of things to come and what it means to India.
How fast does Bosch believe the electric vehicle (EV) market in India for two-wheelers, cars and commercial vehicles will evolve in the next 10-15 years?
The EV market in India is at a nascent but promising stage. India's technology requirements for electric vehicles is different from that of the West due to the unique environmental condition and driving pattern. Hence, investments to make electric vehicle technology affordable is immense. Realisation requires a consistent government policy. Considering the government's proactiveness lately, we see electric vehicles evolving starting with 3 wheelers and 2 wheelers, followed by city bus and passenger car - starting with fleets. Bosch has plans to move into first series production in the Indian market in 2018.
To scale this new powertrain it will be important to bring down battery costs and provide an infrastructure for charging, which currently doesn't exist in India. Beyond focus on BEV (battery electric vehicle), India should not lose the benefit that hybrid vehicles can bring to a car owner and the environment.
It is expected the shift will see major disruptions across OEMs and suppliers. How is Bosch gearing up to this challenge?
The Indian manufacturing supplier base is highly fragmented, and even more so when it comes to electromobility solutions. For Bosch though, thanks to its years of experience and expertise across the world, this could grant an unequivocal advantage. At Bosch, we have developed an integrated electrification system including motor, control unit, battery, charger, display and an app that can power two, three and four-wheel electric vehicles. Bosch operates on a highly strategic localisation strategy in its markets and in India it has been working to develop a comprehensive electrification system tailored to local needs. Thanks to this technology, Bosch components can be integrated with any light vehicle.
Even now, OEMs have ambitious targets of producing more ICE (internal combustion engine) vehicles in the country and suppliers also have their own plans in consonance with that. Do you think these would need to be re-looked at now, or are we still some time away from that?
ICE is not at its end with respect to CO2 and emissions enhancement. BSVI is meant to meet global standards and will have a tremendous positive impact on emissions caused by the traffic. There is still some 3 to 8 per cent improvements possible based on thermal efficiency not considering transmission or light weight. When it comes to electromobility, it is a long-term objective not just for the government but for companies and manufacturers as well. ICEs will continue to play a major role in the supply chain for automobiles in near future while electromobility picks up steam. The ideal powertrain of the future will be a mix of electromobility and ICEs combined with renewable electric power for optimum value delivery.
Do you expect a lot of companies to go out of business considering an electric vehicle has lesser number of complex components? For example, the replacement of a BS-VI gasoline or diesel engine itself with an electric motor will greatly reduce the complexity in engineering.
Change is inevitable. Companies that strategise and re-strategise fast enough remain in the race
With the thrust towards EVs, the government has at the same time also advanced the date for BS-VI emission norms, which I believe is highly capital intensive. How do you think suppliers and OEMs need to tackle this issue considering BS-VI ICE vehicles may have a much shorter and uncertain lifespan?
Certain segments such as long haulage trucks, buses but also some passenger car segments do not have a sustainable solution suited to the Indian requirements for a full replacement to electric mobility. Thus, ICE, hybrids and electric vehicles would continue to co-exist into the foreseeable future. At Bosch for example, we are investing over Rs 1,000 Cr per year to gear up for BSVI technologies. Most suppliers are coping by formulating a judicious mix of locally manufactured and traded products.
How do you think the problem of charging stations can be solved in India and what role can the component industry play in this?
In order to resolve the issue of charging stations and lack of charging infrastructure in the country, public private partnerships need to be explored and strengthened based on stabilized grids and clear revenue models. While the government can issue recommendations and advisories for this purpose, it cannot build the entire infrastructure. That will require everyone to be on the same page and working towards the same goal. One potential source of charging stations can be petrol pumps or metro stations. However, they will need to be equipped and powered by renewable energy sources or bio-fuels. Else, the entire purpose of clean energy is lost. Finally we shall not forget that an EV is not propelled emission free as long as the power is not coming from renewable energies.
Give us a sense of what your plans are towards making components to be supplied for a BEV in India? Do you intend or are you open to getting into lithium ion battery manufacturing as well?
In the Bosch facility in India, we already have state of art facilities that can manufacture automotive electronic components. We are developing local expertise to engineer electric vehicle components. Depending on market growth, we would set up technologies accordingly.
Lastly, while most markets are graduating from ICE to hybrids and then on to EVs, India has taken a stand to bypass hybrids entirely. Does that pose a big challenge for domestic suppliers for whom supplying parts to a hybrid vehicle may have been a good first step before supplying to a full-fledged BEV?
As mentioned earlier, for a considerable amount of time, ICE, hybrids and electric vehicles would co-exist. The fuel efficiency norms coming up in the next five years would warrant high end technologies that include hybrids to be able to meet the target legislations. Within Bosch, experience of both hybrid and battery electric vehicles is available from its products in various markets. Tailoring to lessons learnt in the Indian conditions would be one jump that most would be attempting - one way to minimize the risk is with rapid prototyping and extensive fleet validation.