Given the urgency of EV adoption, the companies need to co-create the vehicles and support the integration of innovations from various sources to disrupt the existing market quickly.
India is one of the few countries that pledged EV adoption in the United Nations Environment Program in 2021. Encouraged to adopt environmentally safer alternatives, India pledged to convert 30 percent of all vehicles, including commercial and passenger cars, to EVs by 2030. Being a manufacturing hub, India has been in the interests of global automobile manufacturers lobbying the Indian government for import tax exemptions, among other considerations, to set up EV factories soon.
On the brink of the transition phase, India has an opportunity to strategise a sustainable transformation. As of 2022, it has a long way to go in building the necessary infrastructure as it has only 3000 charging stations across the nation to support its EV customers. In contrast, its European counterparts, like Norway, are surging ahead, with 75 percent of the population already adopting EVs. The deliberate quick turnaround in European countries is underpinned by several policy changes, including tax exemptions on EV infrastructure and imposing strict carbon emission standards on their citizens.
The top EV manufacturers in India, like Tata Motors, JBM Auto, Mahindra Electric mobility, Ola Electric Mobility, and Ashok Leyland Electric, are eyeing the lion's share in the 1.3 billion Indian markets. At this stage, it is essential to deliberate upon a lasting sustainable transformation requiring a framework that foresees potential opportunities and challenges. In this direction, we propose three layers, which build on each other, encompassing EV production that can help startups, incumbents, and policymakers to strategise the mobility transformation.
Co-creation is developing and designing products or services with external stakeholders like customers and/or experts. Co-creation greatly enhances speed and innovation for collaborating organisations. For instance, in 2016, Mercedes needed an innovation pathway to significantly reduce the time-to-market of its innovations. They undertook a co-creation exercise to identify, develop, test, and implement their most promising technologies and solutions in collaboration with several startups and universities. With this collaboration, the company created a new startup 'AutoBahn' which successfully co-created multiple solutions and significantly reduced the transition time from solution design to its integration into the production process. In this process, Mercedes discovered that it produced more successful implementations in less time.
In the same vein, given the urgency of EV adoption, the companies need to co-create the vehicles and support the integration of innovations from various sources to disrupt the existing market quickly. Recently, researchers at the Indian Institute of Technology developed Artificial Neural Network (ANN)-based algorithm to repair EV batteries dynamically—on the go. If at all EV manufacturers fund to co-create with such innovative ideas, they not only speed up the innovation in the product offering but also leverage open innovation to achieve product leadership.Also read: How a Quebec lithium mine may help make electric cars cheaper
Collaborations resulting from co-creation lead to the creation of smart interconnected infrastructure. The commingling of multiple stakeholders creates a pool of tacit knowledge and interconnected infrastructure, which leads to smart infrastructure. In the last century, elaborate infrastructure that consumed substantial resources like roads, filling stations, service centres, and so on, were created for automobiles and transportation. In contrast, EV infrastructure should be smartly designed to
(1) integrate into the current infrastructure
(2) be resource-efficient
(3) give space to future innovations
(4) be ecologically intelligent.
For instance, Volkswagen Group Innovation set up innovation Centres across the globe to bundle local knowledge and expertise and provide long-term optimal infrastructure to both partners and innovators to provide mobility solutions for generations to come. Companies and governmental bodies which build networks that connect experts, enable partnerships, and increase synergies and resulting efficiencies can result in smart infrastructure that embraces sustainable and futuristic growth.
Ecosystems are a specific form of collective business action wherein a dynamic group of independent businesses creates products or services that constitute a coherent for multiple customer needs. Drawing parallels from technology companies that have built a robust ecosystem of technology services in the last decade, Amazon offers a classic example of an ecosystem. It included brick-and-mortar and online retailers along with app developers and software players to create a whole ecosystem of products like cloud services, omnichannel retailing, audio and video streaming platforms, payment systems, and so on to serve multiple customers' demands digitally. In the EV segment, two-wheeler EV manufacturers like Ather Energy started to suit the varied needs of the customers with an interactive display, phone connection, and theft protection by integrating into mobile-based services. Alongside Ather, the new startups manufacturing EVs are designing them to integrate with several other product offerings towards creating an ecosystem of products. Thus, by commingling with academia, research institutes, OEMs, and startups (through co-creation and smart infrastructure), robust ecosystems create an end-user experience that is rapidly evolving, sustainable and resilient.
Boston Consulting Group reported that companies that are on their own, frequently run into constraints in the broader system, which, in turn, limits their ability to achieve more significant environmental or societal benefits in a way that is economically or operationally feasible for the business. Therefore, building ecosystems can effectively tackle sustainability issues and provide access to critical capabilities and resources to scale rapidly.Also read: Ford to cut 3,000 jobs in a push towards electric
Layers of mobility transformation
In sum, we need to learn from the past were in a race to win the competition, and transportation has become one of the top contributors to global warming. This time around, EV manufacturers need to strategise beyond the myopic competitive view and work collectively to engage all the stakeholders to create the right ecosystem for everyone to thrive. Specifically, in developing nations like India, manufacturers should come together with policymakers to create a long-term vision that is continuously evolving and giving space for shaping newer innovations. India is beginning to take a few steps in this direction by providing autonomy to any individual or entity to set up charging stations as long as they meet specific requirements, thus removing the monopoly of oil companies.
In this second chance at revolutionising mobility, manufacturers, governments, and regulatory bodies in India must consider the layers of co-creating smart infrastructure and building ecosystems with paramount importance. With this inclusive approach and a comprehensive long-term vision, India can stand out as an example of enabling a seamless mobility revolution for EVs for a sustainable future. (1) Ramakrishna Reddy K currently works as an academic associate at the Indian School of Business. Previously he was an entrepreneur in the sustainable fuel logistics space. His email is email@example.com
(2) Siddhartha Modukuri currently works as a research associate at the Indian School of Business. Previously he was a business development manager at Vodafone. His email is Siddhartha_Modukuri@isb.edu
(3) Vijaya Sunder M is an award-winning author and a global thought leader in Continuous Improvement and Digital Transformation. He is a recipient of ASQ’s Crosby Award, and IAQ’s Walter Masing Award, among other recognitions. He has about 18 years of industry experience and holds a PhD in Operational Excellence. He is currently an Assistant Professor at the Indian School of Business. Previously, he was Head of Business Process Excellence with the World Bank Group. His email is Vijaya_SunderM@isb.edu.
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[This article has been reproduced with permission from ISBInsight, the research publication of the Indian School of Business, India]