Can Focusing on Vehicle Electronics And Technology Help EV Players Achieve Localization?

Indian government's 50 per cent electric vehicle (EV) localization policy has been a major subject of debate among the industry stakeholders. While it is undeniably important to manufacture EVs and its parts locally to reduce cost, it is also argued that the country lacks technology and resources to produce lithium-ion batteries making it difficult for industry players to comply with the norms.

While raw materials such as lithium needs to be imported from other countries due to lack of reserves in India, the technology to process and build batteries can be achieved in India, believes Akhil Aryan, founder of ION Energy. "India's positioning in the market is not strong when it comes to battery tech or battery chemistry, but we have a lot of expertise in electronics and engineering," Aryan told Entrepreneur India.

Earlier, while speaking at an industry event, Harkiran Sanjeevi, deputy director general at NITI Aayog, explained that the government wants companies to manufacture locally in India for both the domestic and foreign markets. According to Sanjeevi, India has the resources to make localization possible. "The only thing lacking is the lithium ion for batteries. Government is entering into partnerships with other countries for sourcing the raw materials."

How Is ION Energy Helping To Solve Localization Issues?

While the industry players find it difficult to meet the localization mandate, Mumbai-based ION Energy is trying to offer a solution to this problem. Founded in 2016, the company provides a unique electronics platform-as-a-service (PaaS) model which uses software analytics and artificial intelligence (AI) to improve the performance of EV batteries. The company allows its users to buy or build their own battery management system (BMS) using ION Energy's technology.

Aryan explained that any lithium-ion battery needs BMS which is like the brain of the battery. The BMS is responsible for measuring cell voltages, ensuring balanced charge cycles, state identification, and controlling crucial safety systems. It manages the battery by keeping it safe and extends its life and performance.

According to Aryan, BMS systems available in the market provide electronics hardware support. It acts like a motherboard for the batteries. However, ION Energy has built a motherboard and has connected it to the cloud. "So not only does it manage the battery but also captures the data, moves it to the cloud where it gets processed. Using machine learning, we come up with the new management algorithms and send it back to the BMS," Aryan added. ION Energy counts some of the popular brands such as Ola, Okinawa Scooters, Tata Motors and Airbus as its clients. ION Energy is present in 12 countries including France, Germany, the UK, Ireland, Australia, and Africa.

Lack of Conversation Around Technology

While ION Energy is doing its bit to localize production of BMS, Aryan explained how challenging it is for them to explain the start-up's idea to both investors and clients.

"We encountered this challenge since the day of launch. We realized that it's a difficult concept for investors to buy into so we would have to fund the company, a large proportion of it with our revenues and so we started building a product that would actually make revenue. And so in the last 18 months, a large portion of our companies is run by our own revenue. We grew about 350 per cent last year," Aryan said.

Aryan is not the first person to highlight the issue. Many stakeholders agree that the newness of the EV technology is one reason behind the lack of investment. While speaking to Entrepreneur India during an industry event earlier, Vinit Bansal, CEO and founder of EV Motors India had also said that EV technology is at a nascent stage in India and thus financial institutions are wary of investing as they do not understand the risks associated with the technology.

Why Is Understanding The Technology Important

EV is at an extremely nascent stage in India. While both the government and industry players are doing their best to promote electric mobility, the associated risks of technology can put off both users and stakeholders.

One of the major reasons behind slower adoption of EVs is the higher cost compared with traditional vehicles. The reason being imports of raw materials and batteries which increase the cost of vehicles. Understanding the battery technology will not only help localize its production but also reduce the cost of the vehicles.

Clarity and conversation among the stakeholders about the technology will also elevate the fears among the users which will result in increased adoption.