New Delhi: The last two years have been fairly busy for Toyota Kirloskar Motor Pvt. Ltd. While sales of its popular models such as Fortuner, Crysta, Innova and Altis have exceeded expectations, the company has had to grapple with regulatory issues—first with a diesel ban in Delhi NCR and now the dilemma over electric vehicles.
Vikram Kirloskar, vice-chairman, is very vocal about India’s stance in favour of electric vehicles. While India needs to reduce dependence on oil imports, he warns that it may soon happen that the country becomes dependent on lithium imports. “We need to decide if we want to deal with the Chinese or the Arabs," he says in an interview. Edited excerpts:
Toyota is seen in the market as an anti-electric vehicle (EV) company. Why are you averse to bringing the technology to India?
We make more than one-and-a-half million electric vehicles in the world but I think it’s the wrong thing for India. Our long-term requirements are better fuel efficiency because we need to reduce oil imports, a cleaner environment and more safety. These three things are needed to survive long-term in the mobility game. Look at all the studies on emissions and efficiency. You can reduce energy consumption if the overall system is more efficient.
Data from the Indian Institute of Science, Bangalore, based on Indian driving cycles, fuel systems and electricity production, shows that hybrids are the most efficient for the environment and energy consumption. While India’s capacity to produce electricity from renewable sources is about 70%, actual production is about 90% coal-based. On that basis, EVs produce far more emissions than a hybrid. While I fully agree that we have to reduce dependence on oil imports, it may soon happen that we start to depend on lithium imports. We need to decide if we want to deal with the Chinese or the Arabs?
Each country has its own energy profile. For example, in Norway, electricity is mostly produced from hydropower. Therefore, EVs are a fantastic option for them.
EVs could have been a good option if our electricity was entirely generated from nuclear or hydropower. With India’s current energy profile, hybrid is the best option. We can have numerous policies, but finally, what makes economic sense for the country will pan out. We will pursue hybrid.
A hybrid is basically an EV with a smaller battery than a full EV; it is much more complex. The customers will finally drive what is sold. They are intelligent enough to understand what is happening with the environment. As more data comes in, they will know what is the right way to go.
So, it’s not that we won’t do electric. Hybrids will still have an electric motor and can run on them a 100%. I have a new Lexus LS500h which can be fully electric on the highway if you put a larger battery.
So have you been able to convey this to the government?
We are trying our best. As the government is seeing more scientific engineering data, they are starting to understand. Let me put it the other way. The government is saying they want 30% of vehicles to be electric in the next 15-20 years. The industry said fine, and they will be a part of that. What happens to the remaining 70%? That’s still six million vehicles.
The oil ministry has started expanding refineries because they anticipate more requirement for petrol and diesel. If you really want to reduce that requirement, these (hybrids) consume 50% lesser fuel.
Take all that data and take a call on it. Now it’s becoming evangelical in the sense that it must be done because I (the government) have said it must.
The industry is also divided into parts: a set of companies that want electric and others that do not.
A part of the problem is that 90% of hybrid technology, in terms of production, is with Toyota.
Most of the other manufacturers are licensees of Toyota’s. To some extent, some people in the government think that if they support hybrids, they’re supporting only one company. The government needs to decide if they are supporting a technology or a given intent. Is your intent to reduce oil import or to focus on one technology? Don’t tell us what technology to use; it should be technology-agnostic.
Additionally, put a glide slope for oil import and emission; if you’re below it, incentivize and if above, penalize. Let the market dynamics decide.
How have you communicated this to Japan?
They know what we’ve been doing. Toyota and Suzuki have announced they’ll make EVs in Gujarat.
Is Toyota Kirloskar Motor involved in that partnership?
No. But we’ll find out soon enough about how that’s developing. Suzuki is great at making small cars which we are not.
Is that the strategy going forward?
We are very much in the premium car market, part of which is also the Yaris, which we launched. There is no technical difference between that and a Camry or a Corolla, no high-end features have been taken away.
What can we expect from Toyota Kirloskar Motor in the next five to seven years?
As a company, we’ve been working hard on reducing our carbon footprint. We don’t use freshwater for production for over 10 months of the year. We are looking to make our company good for the country. You’ll see more on environment and safety from the company.
And, once in a while, there will be regulation changes…
The strategy we’ve adopted in the past several years, for example in terms of safety, is to stay ahead of regulation. For this, I must give credit to Toyota. The same best-in-class safety standards apply to their cars no matter where they sell them.
What’s the update with Lexus?
Sales have just begun with the whole range up for sale. They are priced quite high, but there is still a market for such vehicles. It shows the level of technology which we can aspire to have in all our cars, within Toyota. We hope the economy grows at 7.5%; at that rate, there is a lot of demand for this segment. I think the potential is underestimated.