Tata Motors recently unveiled the electric avatar of its most popular Ace small utility vehicle. The company said it has already booked an order of 39,000 from major e-commerce players. As India’s largest commercial vehicle maker plans to transform commercial vehicles with various technologies to achieve net zero by 2070 of the country. Express Mobility’s Deepanshu Taumar sat down with Girish Wagh, Executive Director of Tata Motors, to understand his perspective on first and last mile mobility and the use cases of different commercial vehicle applications.

Edited excerpts…..

CV as a segment is one of the most diverse segments as there are different applications at different tonnages. And then you have buses, then small utility vehicles. What type of application will have what type of technology and what is your vision for the next 5 years?

We are working on IC motors. Within the heat engine, we work on diesel, gasoline and natural gas. Our bet on natural gas has actually helped us over the last year because all of a sudden the penetration of natural gas has improved and that has helped us gain market share.

Then we also bet on battery electricity, which helped us to be the frontrunners on the buses and to get good orders.

Another example of electric battery is we’re also working on fuel cell because currently it’s believed that for long range batteries will always have a limitation and so fuel cell could be the technology and so we place the bet there. So we are working on core technologies and taking these technologies to a particular level.

Once these technologies are ready, we also spend a lot of time on the applications with the customers to understand the cycle of use and decide which application, which technology will make sense. And then deploy that technology there.

So far, natural gas and electric batteries clearly seem to be leading in terms of the number of applications where they could be deployed outside of combustion diesel engines. And that’s what we did, but the fuel cell can also be a very promising technology.

It has to go through its birth banks because a lot of technology engineering input will go into it to prove this technology and also optimize it for truck and bus applications and then we will have it ready.

What is the total addressable market for small electric utility vehicles and how do you see it evolving in the coming years?

The market is at the initial stage. No doubt about it. But I think as a country we have set out to be net zero by 2070. What that means is that in that year there should be no CO2 emissions or whatever either else. You have a lag, which is greater than the rest of the shows. For that to happen, assuming the life of a commercial vehicle is supposed to be 15 years, at least 15 years before that, you would have to stop making vehicles that have tailpipe emissions.

I think the roadmap has been established. The electrification of passenger and freight transport is an irreversible trend. We must work in this direction. How fast the transition is something we have to, I won’t say, wait and watch, but we have to not only facilitate, we have to drive it.

As they did in the case of this e-commerce site.

We could have stopped and said it would take a while to kick in, but these guys have been working towards making it happen and bringing TCO parity sooner. The same thing we have to do. In the buses, we also did the same. The CESL launched a call for tenders for more than 5,000 buses.

And with the magnitude that it had, we decided to take it aggressively and put a lot of effort and knowledge that we had acquired in 10 years at Delhi Transport Corporation and came up with a very optimized and aggressive offer that helped us to become L1 in this tenderness. The transition is going to happen and the speed at which it happens is up to us to some extent. We will have to drive this. This segment is set to grow.

Can you shed light on the day-to-day operations of an e-commerce delivery vehicle in terms of average miles driven and recharged?

We have been collecting data for years. Typically in an e-commerce app it’s around 80 kilometers on average, that’s the range they operate in. When we looked at the duty cycle, we also realized that it’s not just 80 miles, start-stop driving habit and all that. In that sense, the duty cycle is more or less defined around that.

We decided on an optimal level and said that at the use case level we should be able to deliver at least 110-120 kilometers on a single charge.

We have also realized that many customers have the opportunity to earn more if they can recharge their battery during the day. And so, a fast charging solution has also been provided on the vehicle. While the average is between 80km to 100km, there are customers who can go up to 150km.

And in real use cases, you don’t know what range you have, so you give that functionality away and therefore make it much more fungible and flexible for the customer to derive revenue from a very low operating cost structure .

What Ace did in 2005 and how it transformed last mile logistics is through the revenue model. It’s the same solution we’re putting in place right now after 17 years, the world isn’t getting cold. And that is what we have planned on the vehicle. And that’s an advantage that we see in all three-wheelers and such, because they don’t have that load capacity, they go a range of 50 to 60 kilometers a day. The e-commerce industry actually runs on volume.

It doesn’t work on weight. The volume advantage that comes with the Ace EV is the range advantage, the flexibility of variable duty cycles and range. I think we have a good value proposition.

How to charge Ace EV daily?

At home, customers can use normal (slow) charging. And when we work with the e-commerce customer, we realize that in any geography, in fact, if you look at the last mile, Flipkart, Big Basket and Amazon, they’re all very close together. And most of these aggregators, as we call them, actually provide services to all three.

When the trickle charging can happen at home, through the 5 amp outlet so far, while a fast charging facility, if, if placed in that local area, then they can do the fast charging and supply. It’s a solution that you scale hub by hub, depending on the duty cycle it’s operating in.

That’s why we work with Tata Power. And some of the other players that are in this business provide the charging facility where they’re going to set up these things in sync with the requirements of the customer.

The issue is actually a concern too because the drivers of these vehicles live in certain areas with parking and having slow charging would be an issue.

I think the ACE EV is probably one of the unique solutions where you have an on-vehicle charger. Then you have the option of using normal AC/DC current. Convert it to direct current to charge the batteries. It’s trickle charging, which you can do overnight, or depending on your range needs, you can charge it for three hours, two hours. But if you also have a solution, that is DC fast charging.

You can charge from 10% to 90% in 90 to 120 minutes. If the requirement is only 80km, that we provide like 120-130km, depending on usage and all.

It actually excels on requirements. The solution allows customers to charge their vehicle anywhere with an onboard charger provided on the vehicle, or if you have charging infrastructure, you can charge it in 105 minutes, for example.

Will the Tata Ace EV be available across India or in metropolitan cities?

We will be rolling out in phases. At the moment, the focus is on e-commerce players and the demand that came today, we were also very pleasantly surprised. Even within the e-com segment, we will go city by city. And in the city, we will go up by hub. Along with that, there are also many other applications, which the team will engage with these clients and build these applications as well.

Do you consider this a completely B2B game, since you’re talking about Amazon and Flipkart, Big Basket, or will it be B2C as well, or maybe it’s a mix of both?

Both. To begin with, it’s more of a B2B to build the capabilities, which we will then deploy in B2C as well.

How do you tackle the challenges of EV financing, resale value, depreciation cost of an EV?

What these guys have done is they don’t just interact with customers or vendors. They have interacted in recent months, even with the financiers. They used to collect inputs from customers and bring them back to financiers. Then the financiers were brought to our development center. They were shown the product, the capacity of the product, what kind of validation the product is going to undergo, what is the battery life and some of the other aggregates to create the confidence in their mind.

Therefore, we had almost all commercial industry financiers present at the launch. And everyone leaving was quite positive and said that we were going to offer a special product for electronic financing in commercial files. I think I have to say that the preparation was very well done.

But of course I think execution is always a long term thing, you have to excel day to day. We must continue in this way. And I think the deployment of these vehicles in the segment should be successful.

And will we also see a passenger version?

We continue to review all applications. Whichever application we believe lends itself best to electrification can reach TCO parity the fastest. We will first look at this application.