ABB India is investing about $100 million every year to ramp up its offerings in the utilities, transportation and infrastructural space in India, Sanjeev Sharma , MD at ABB India, told ET’s Vatsala Gaur and Satish John in an interview. Transportation orders at ABB’s Indian subsidiary have more than doubled in the past two years, with ABB technology being a part of all the operational metro projects.
On the Indian government’s target to create a fleet of only electric vehicles by 2030, Sharma says that providing cars with charging stations across cities is “doable.” Battery prices are dropping, and will fall to a significant level by 2020. The cost of charging infrastructure will also drop as the eco-system starts multiplying. “Nobody spoke about the cost of setting up petrol stations when petrol and diesel were adopted as fuel for vehicles,” he said, indicating that it will fit the overall infrastructure as the ramp-up of vehicles take place.
The 2030 deadline for electric vehicles is being looked at with some circumspection by a section of the Industry. Do you believe, from the ABB perspective, that the target is doable?
2030 is 13 years from now and what the government is doing is that it is painting a vision and ambition that will enable industrial and technological forces to work in that direction. Many years ago, the Germans were not comfortable in transitioning into a renewable future but now in 2016, they generated more solar power than they could consume. Once these technologies become stable, countries like India would take the benefit based on the vision of adding 175 GW by 2020 and it’s happening on the base built by someone else. Battery prices are dropping and will drop to a significant level by 2020, and a lot of electric platforms are coming in, with major OEMs talkin talking about all electric cars in the next 3-5 years. Given the trend of technology, it’s a doable vision.
Do you see challenges in the Indian economy?
There is a lot of noise outside regarding Brexit etc, but India needs to focus on its fundamentals. Inflation is down, GST is coming and when we combine all these factors, the opportunity is immense in the country. However, if our (India’s) credit rating improves, there are trillions of dollars going around that India can attract from the global economy.
State of the art technology comes at a price, whereas Indian customers are more value conscious. How is ABB placed to cater to this market?
It is true that Indian customers are price savvy and look for value in all transactions for products and services. With respect to new technologies our experience has been that India’s ability to absorb new technology is increasing because the nature of transition is taking place. The demand is for the best in class technology but at the same time engineered to a point that it creates value for the customer and consumer.
ABB had technology for fast charging electric vehicles. Can the Indian consumer afford it?
We should see it from this angle: Typically for petrol and diesel vehicles, the price of petrol and diesel was the main criteria and our ability to distribute it through stations was an infrastructural requirement. Nobody talked about how much the infrastructure would cost. I believe the chargers will become part of the ecosystem once the the infrastructure starts multiplying. One also has to see who needs it. If you are at home, you can go for slow chargers. But if you are on a city tour, you need a fast charger. A mix of technology is needed and it will be driven by the convenience of the consumer rather than the cost of the infrastructure surrounding it. But in all cases, a good, robust technology is the requirement because you don’t want people to get stranded while they are in transit because of substandard technology.
Where do you see the demand for ABB products emerging in India…
Our focus is on utilities, industry, transport, and infrastructure. Digitalisation of these sectors is picking up. In India, there is a large play of utilites. And a large play of private sector once the NPAs get sorted out. From a sectoral perspective, there is growth for us. And also, as new technologies come, given the wide R&D facilities that we have, we can adopt the technologies as and when they come. We are the provider of technology so we don’t own the asset, but as demand rises, we continue to expand our factories. On an average, we spend about $100 million per year and last year we doubled our solar inverter capacity (in India), given the high pickup in demand in solar farmhouses. Going forward, until 2020, the sectors with potential are foods and beverages, and electric vehicle chargers would be a starting point. Also, in the building space, electric wiring, automation assistance of buildings etc, would be areas where we will see good investments.