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EMobility+ had a chat with Mr. Vikram Gulati – Executive Vice President, Toyota Kirloskar Motor, and learned about the company’s business, his views on India’s electrification roadmap. He also gave insights on Toyota’s layered, global, customer-needs-based portfolio approach to electrification.
How has the year 2021 been for Toyota’s business overall?
We began the year with a fresh start and renewed hopes of recovery. However, the new fiscal brought in the devastating second wave, overcoming which, took great resilience of not only businesses but even the society at large. The latter half of the year saw demand picking up and the same can be attributed to factors aiding pent up demand initially, and further fuelled by demand due to the festive season.
In TKM too, at present, we are witnessing demand trends gravitating back to pre-covid times, and the same is reiterated by the fact that in the month of December, we have registered the highest customer orders for the entire year. The same has been contributed by all the models across our portfolio. TKM registers 72% growth in annual sales in 2021.
Looking at model-wise growth of our product line-up for the year, the Crysta and the Fortuner continue to dominate their respective segments and more so after we launched the Legender, which has received a tremendous response from our customers. The product refreshments in the IMV models have undoubtedly helped us retain huge customer interests and orders. The Toyota Glanza and the Urban Cruiser have been a runaway success too, witnessing sustained sales as they generate tremendous interest in their respective segments & contributing to a new set of younger consumers.
The Camry Hybrid which has been enjoying huge customer orders has also created a niche for itself being the first and only locally manufactured strong self-charging hybrid electric vehicle in India.
The Toyota Vellfire that defines sustainable luxury & indulgence for Indian customers, has also marked its presence in the Indian market and is doing extremely well.
What is your view on India’s electrification roadmap – the opportunities and challenges that lie ahead?
The challenges regarding EV adoption the world over are mainly the high cost of EVs as compared to ICE and charging-related challenges (distance per charge and time taken to charge). In India, both these challenges are aggravated owing to lack of manufacturing ecosystem, lack of charging infrastructure, and consumer price sensitivity.
Going forward, in certain vehicle segments, the BEV adoption challenges are more comparatively. For e.g. BEV adoption is more challenging for segments like passenger vehicles and medium & heavy commercial vehicles. However, in the case of 2/3 wheelers & Intra-city buses, these are comparatively lower as the economic viability (on a Total Cost of Ownership basis) issues are relatively easier to resolve and some strategies like battery swapping, etc., can also help mitigate the charging related challenges. Hence these segments are likely to see faster BEV adoption.
Further for electrification, in addition to demand created by Government schemes, the key is to attain early investment viability for localization of EV part manufacturing at a global scale. For this, the supply side interventions by Government through the Production linked incentive schemes will need to be supplemented by aggregation of demand for EV parts across the full range of electrified technologies and vehicle segments. To achieve this, we believe that a merit-based taxation structure or carbon-based taxation for vehicles will be essential. Consequently, India can also realize a much higher level of national benefits of reduction in fossil fuel consumption and carbon emissions.
What do you have to say about India’s strategic imperatives – in terms of resource availability, infrastructure readiness, energy mix, consumer price sensitivity, and value proposition?
The global shift towards electrified mobility is primarily guided by various objectives. One of the key goals is to shift from fossil fuel and carbon emission reduction. But for India, the national goals are not only the above targets but also retaining manufacturing competitiveness, creating jobs as well as geopolitical implications. In this context, the government is encouraging the creation of a local manufacturing ecosystem through PLIs across various sectors which will help to bring in investments for manufacturing within the country with technological advancements. PLI promises not only to make us self-reliant but also globally competitive. Additionally, we need to secure the inputs and raw materials that are needed for the manufacture of cells, batteries, motors, etc, which have the maximum value addition in an electric vehicle.
Additionally, last year in Aug, Hon’ble PM announced the target for achieving ‘Atmanirbhar (self-reliance)’ in energy by 2047 through a mix of gas-based economy, ethanol, green hydrogen, and electrified mobility. This energy mix of the future for India will also determine the powertrain choices for different vehicle segments depending upon the application and customer acceptance. We believe, going ahead all these non-crude oil energy sources will be needed for realizing our key national objectives optimally. Another important requirement for India is to develop the electricity transmission & distribution infrastructure besides the charging infrastructure for EVs.
In view of the above and from point of view of consumer adoption of greener technologies, we believe that a technology-neutral approach wherein policy support is extended to all greener technologies proportionate to the social benefits that they provide, will effectively lead to a faster and smoother technology shift. For our part, as pioneers of electrified technologies, TKM will continue to focus on mass electrification by encouraging the localization of electrified vehicle parts.
Please tell our readers about Toyota’s layered, global, customer-needs-based portfolio approach to electrification.
Toyota being a global leader, has all the electrified technologies. Our goal is to deliver “Mass Happiness for All”. We believe that the choice of technology should be one that is practical and sustainable, helps achieve our national goals in the fastest possible manner. While our long-term decisions are shaped by our Global environmental challenge of achieving zero carbon emissions by 2050. Our immediate technology decisions are influenced by our desire to achieve maximum immediate societal & environmental benefits, which in turn is largely determined by, the local energy mix of the country, infrastructure readiness as well as customer acceptance that, enables suitable technological adoption at an appropriate time.
Toyota is committed to global carbon neutrality by 2050 and we, as Toyota in India, are naturally also integral to these efforts. As a part of this Global environment challenge, we are committed to zero carbon emissions not only from our new vehicles but across the entire value chain that will help us achieve zero carbon emission at the life cycle of the vehicle. We believe a full lineup of electrified vehicle technologies will provide wider options for the customers – including hybrid electric, plug-in hybrid electric, battery-electric, and hydrogen fuel cell electric vehicles. This approach will help achieve accessible electrification at scale, supporting national objectives (e.g. reducing CO2 and oil import, developing industry through localization and export).
What can we look forward to from Toyota in 2022?
Looking forward to 2022, our aim is to expand our footprints with a special focus on Tier 2 & 3 markets. Growth for TKM is not just defined in terms of sales numbers but with an enhanced product portfolio, we hope we will be able to cater to more segments as well as newer markets in 2022 and beyond, helping us achieve our ultimate goal of delivering “Mass Happiness to All”.