Indian bus industry is changing

SCANIA ETHANOL city bus- Start image copy

Last fiscal saw the Indian bus industry change; experience growth and excitement.

Bhushan Mhapralkar

Last fiscal was a good year for the Indian bus industry. The industry witnessed growth followed by the enforcement of the bus body code (AIS 052), and the school bus code (AIS 063). Posting good growth, the industry also witnessed the arrival of sleeper bus code (AIS 119), which is claimed to be a world first. Progress was also achieved in tarmac and double-decker bus code draft. Experiencing buyout times on the back of good orders from government run State Transport Undertakings (STUs) and City Bus Undertakings (CBUs) as well as private bus fleet operators, the bus industry grew at an average 10 per cent last fiscal. Apart from the homologation of a sleeper coach built by Bangalore-based bus body builder (converter), Veera Vahana, under the new sleeper coach code in April 2017, the bus industry in India saw some exciting developments during the last fiscal. At Busworld India 2016, Belgaum-based Alma Motors displayed a tarmac coach with aggregates like engine, gearbox and axles sourced from tier suppliers like Cummins and ZF. Pointing at empowering key bus body builders like Veera Vahana, Alma, JCBL and others, the bus code, it seems, has provided the much needed direction to the Indian bus industry it looks like. Expressed Prashant Kakade, Manager & Co-Ordinator MDC, Central Institute of Road Transport (CIRT), that the bus code has had an influence of turning bus body builders into bus manufacturers. “They are now looking at sourcing aggregates from key suppliers to make their own bus that complies with the bus code regulations”.

If bus body builders continued to gather speed and mass, traditional bus manufacturers like Tata Motors, Ashok Leyland, Volvo Eicher Commercial Vehicles, and SML Isuzu did brisk business as well. Operating at the premium end of the market, global bus makers like Volvo and Scania did well. The premium bus market, driven by rear-engine buses, hovered around 1000 units last fiscal. At busworld India 2016, in an effort to retain its leadership position in the premium bus market, Volvo Buses India unveiled a two-axle 12 m long coach with a locally made 8-litre common-rail diesel engine. This engine is made at the Volvo Eicher engine joint venture at Pithampur, Indore, called the Volvo Eicher PowerTrain. The 5- and 8-litre engines made at this plant, which mirrors the processes and layout of Volvo’s Skovde plant in Sweden, are supplied in Euro6 guise to many European locations of Volvo. Said Akash Passey, Senior Vice President – Business Region International, Volvo Bus Corporation, “The inclusion of a locally produced engine addresses the demand of our customers for localised products, and would reflect on the cost and maintenance of the vehicle.” Akash stressed upon taxation as one of the key reasons why operators take long to achieve Return On Investment (ROI) in the case of premium buses. This is also said to be the reason why many city bus operators are not very keen to procure premium, low-floor rear engine buses.

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Premium players eye mid-premium positions

To make a compelling case for buyers, Scania took an ethanol-powered bus route to the market. Its over three years after the first ethanol-powered low-floor 12m-long city bus began plying at Nagpur. Since then, the Swedish manufacturer is working towards supplying 55 bio-fuel city buses to the city of Nagpur. If, and how viable they are, will be known over a period of time. In a bid to tap into the emerging mid-premium position, which according to Joerg Mommertz, Chairman & Managing Director, MAN Trucks India, offers an opportunity to better specifications than the domestic budget producers, global bus makers have been introducing products while homegrown players like Tata and Ashok Leyland up their ante. In association with Alma, MAN introduced a Mammoth front-engine 12 m luxury coach in early 2016. Volvo has been pushing its UD mid-premium brand of city buses in India. It recently received an order from the twin cities of Hubli-Dharwad. Dharwad features on the Central government’s scheme of ‘smart cities’, which promises to overhaul the infrastructure and make cities ‘world-class’. Tata Motors bagged an order to supply 25 vestibule buses worth Rs.50 crore to Hubli-Dharwad in January 2017. The order followed a bigger order from 25 STUs and CBUs in September 2016 to supply 5000 buses, representing a healthy growth of over 80 per cent over last year as far as the order book went.

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STUs and CBUs as growth drivers

In FY2016-17, STUs and CBUs emerged as the key bus industry growth drivers. A big surge in STU orders was witnessed last fiscal, and after a gap of nearly four years, indicating renewed focus of various state governments and city councils on public transport. With the overall commercial vehicle market in India estimated to be 715,000 units, buses make up roughly 20 per cent of it. The Indian (medium and heavy) bus market grew 7.64 per cent in FY2016-17 with the sale of 47,262 units as against the sale of 43,909 units last fiscal. The light bus market grew 3.94 per cent with the sale of 50,864 units in FY2016-17 as against the sale of 48,936 units last fiscal. Leave for the 1000-unit premium rear engine bus market, and a small chunk of rear-engine premium city bus market (that saw the arrival of a new player, JBM last fiscal) led by Volvo and Scania, the Indian bus market by and large is made up of budget mass volume buses. It is here that Tata and Ashok Leyland lead. They are followed by Eicher and SML Isuzu and others. Prominently front-engine oriented, this end of the bus market is driven by low acquisition cost, fuel efficiency, service-ability and low cost of operation.

Low floor JBM AC city bus service for Noida-4 copy

On the back of good orders, Tata Motors grabbed the lead from Ashok Leyland in FY2016-17 as the number-one bus maker in India. For some years, the lead position separated the two by a minuscule gap of one-per cent. Said Ravi Pisharody, Executive Director – Commercial Vehicles, Tata Motors, “We clocked a growth of 22 per cent in FY2016-17 against an industry growth average of 10 per cent.” In the pursuit of higher profitability, Ashok Leyland pursued a strategy to exit some of the State Transport Undertaking (STU) businesses. Expressed Vinod K. Dasari, Managing Director & CEO, Ashok Leyland, “We decided to concentrate on innovative products.” Ashok Leyland’s stress on innovative products is not new. In 2014, the company introduced a front-engine flat-floor city-bus called Janbus. Providing a modern, albeit front-engine alternative to the low-floor rear engine premium city buses, the Janbus proved popular because it cost almost half of what a Volvo city-bus costed at an estimated Rupees one-crore. In addition to the lower acquisition cost, the Janbus was engineered to carry more people, and promised carriage of people at a lower cost. With AC optional, the bus, offering single-step entry, came equipped with an Automated Manual Transmission (AMT), an India first in buses.

700-03152889 © Siephoto Model Release: No Property Release: No Paseo de la Independencia, Zaragoza, Aragon, Spain

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© Siephoto
Model Release: No
Property Release: No
Paseo de la Independencia, Zaragoza, Aragon, Spain

 

Bus technology

With the bus codes influencing the Indian bus market during the last fiscal, much technology found its way into Indian buses. AMT has proliferated since. ABS has become standard on heavier buses, and also air suspension. The market for AC buses, including retrofitment grew steadily last year. It is an estimated 20,000 and 25,000 units strong according to Pramod Verma, Vice President, Sphere Thermal Systems. It was between 12,000 and 14,000 units five years ago, quipped Verma. The demand for AC can be linked with the rising market demand for comfort and refinement. If the demand for comfort and refinement drew the demand for lighter AC buses for school, staff and tourist application in FY2016-17, many government transport undertakings – CBUs, under the Faster Adoption and Manufacturing of Hybrid and Electric (FAME) vehicles scheme, took out tenders to procure hybrid and electric vehicles. Under the aegis of the central transport minister, Nitin Gadkari, two 9m-long buses refitted with electric propulsion system were introduced in the capital city of Delhi to ferry the members of the Parliament. Tata Motors will soon deliver 25 diesel hybrid rear-engine low- and flat-floor city buses to the city of Mumbai. These mirror the CNG hybrid Tata Hispano city buses that ply at Madrid. Late last calendar year, Volvo delivered two diesel hybrid city buses to Navi Mumbai against an order for five such buses, making it the first manufacturer to supply a hybrid city bus in India. This bus is said to cost Rs.2.3 crore against the Tata Hybrid city bus, which is claimed to cost Rs.2 crore. High acquisition cost continues to be a deterrent despite a 50 per cent subsidy offered under the FAME scheme. To be precise, there is the challenge of gap-funding, which will need to be addressed.

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With electric vehicle infrastructure in India lacking, hybrid buses make ample sense. CBUs however are said to be already looking at electric buses! Last fiscal saw CBUs put out tenders for the procurement of electric buses under the FAME scheme. Perhaps anticipating this, Tata Motors, at the Auto Expo 2016 premier fair, displayed a 9m electric bus based on its Ultra platform. JBM in association with Solaris displayed a 9m electric bus with a pantograph. Not to be left behind, Ashok Leyland, which owns Optare, unveiled a 9m electric bus called Circuit in early 2017. The move up to electric buses traces its roots in the first phase of emission reforms in 2008, which led to Delhi city buses being retrofitted with CNG almost overnight. Most Mumbai city buses also run on CNG. CNG however has posed limitations in terms of availability and infrastructure. The operating costs of CNG buses are proving to be higher than LNG. Promising to overcome to limitations posed by CNG, Tata Motors recently showcased a LNG city bus at Trivandrum.

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As government run STUs and CBUs continue to call for modern yet cost effective buses, private operators continue to up the efficiency of their operations by deploying technology and modern buses. For private bus operators, complex bus rules and high taxation structures, which differ from state to state, continue to be a challenge. Business for them comes from government contracts, corporate staff transportation, tourist transportation, and from the transportation of school children. They accurately map the flow of people such that school and staff bus operators render to tourist transportation during weekends. Demand for large underfloor storage compartments in buses is on the rise when it comes to heavier, long-haul tourist buses. This is also driving the the need for powerful engines. With infrastructure improvements, the number of people travelling by bus continues to rise. The number of consignments transported by buses is also increasing. It serves as a good secondary earning medium. Especially during off-season. Expressed B Anil Baliga, Executive Vice President – Bus & Application, VE Commercial Vehicles, “A lot of the operator profitability comes from cargo.“

Comfort and fuel efficiency improvements

Increasing STU exposure, companies like Eicher are deploying technology to improve NVH and comfort on front-engine buses. Eicher is one of them. Said B Anil Baliga, that their focus is on NVH of front-engine buses. On the subject of high preference to front-engine buses in India, Baliga mentioned, “Indian operators are smart. They know their Return On Investment (ROI) very well. The trick lies in selecting the right route and the right bus.” The enforcement of BSIV emission norms from April 01, 2017, has ensured that most buses come with a common-rail turbo-diesel engine. Most heavy buses come with SCR after-treatment technology. This has had a definitive effect on acquisition cost, and operating complexity, what with the need to opt for annual maintenance contracts with authorised dealers rather than depend upon private garages that are much cost effective. With fuel efficiency at the forefront of operator equations, it will not come as a surprise that Daimler India Commercial Vehicles (DICV) is aluminium extensively in the building of its bus bodies. Use of such a technology is also expected to keep it ahead of its competitors, and body builders that are moving up the value chain. Taking advantage of the bus code, bus body builders (convertors) like Veera Vahana, JCBL, Alma Motors and others are investing to turn into bus manufacturers by procuring key aggregates like powertrain, suspension, etc., from the respective tier suppliers. Signalling bus industry transformation, the growing equation between convertors and aggregate manufacturers is starting to spring surprises. At Busworld India 2016, Alma Motors displayed a tarmac bus with aggregates procured from tier suppliers like Cummins and ZF.

Exports

If bus body builders are turning into bus manufacturers, CV majors like Ashok Leyland and Tata Motors are concentrating on exports for growth. T Venkataraman, Senior Vice President – Global Bus, Ashok Leyland, puts the domestics and export sales ratio at 58:42 as far as his company is concerned. Buses made by his company are exported to the Middle East, SAARC and African markets. In addition to this, Ashok Leyland also produces buses at a facility at Raas Al Khaimah in the Middle East. This plant has a capacity to produce 1200 units per year, and is helping the company to cater to the African markets. Ashok Leyland is also exporting Euro5 buses to Ukraine as well. Tata Motors is also applying thrust on exports. It exports buses to various African markets, Russia, the Middle East, and other destinations. The company claims to have achieved a leadership position in the medium bus segment in the Middle East. Eicher exports buses to SAARC markets; to the Middle East and African markets. Similarly, SML Isuzu exports staff, school and luxury buses to SAARC and African markets.

Light bus market

With the participation of Japanese players like SML Isuzu, the light bus market is transforming. Tata Motors continues to lead this market. Its lighter buses flaunt quality bodies built by Marcopolo. Daimler India Commercial Vehicles is BharatBenz lighter buses are also finding good acceptance in the market for staff and tourist bus transportation. A strong player in this segment is SML Isuzu and Eicher. Both has there own bus body building plants. Both have a considerable presence in the school bus sector. A pleasant change in the school bus market is Ashok Leyland’s Sunshine. Claimed to be the first bus to comply with roll-over crash norms, the bus saw the company seek the feedback of students, parents, school authorities, drivers and others. Stress was laid on minimising blind spots and offer a cheerful travel experience. The interior of the bus is thus colourful; there are safety elements built in, and the seats employ anti-bacteria fabric. With the Nissan collaboration behind it, Ashok Leyland is expected to bring out new products in the LCV people mover segment. It currently has the Mitr. A 8 metre-long version of the Mitr will be launched soon.

 

Industry future

With crash norms expected to roll out in next fiscal, and the move up to BSVI emission norms scheduled for 2020, the Indian bus market has only one way to go – to advance quickly to close the gap with buses that are offered in the advanced market at a fraction of the cost. The export of 12m rear engine inter-city bus by Volvo to Europe has proved that there is a distinct price advantage in buiding a world-class bus in India. Initiatives like sleeper and double-deck coach codes by the government is empowering bus body builders to turn manufacturers. This spells good for the growth of the Indian bus industry even as the traditional CV manufacturers look at increasing their reach into the international markets. It is not for nothing, that the Indian bus market is expected to grow at a CAGR of 10 per cent by 2020. It is all about progressing demand, value and luxury after all.

 

Circuit from Ashok Leyland

Ashok Leyland has introduced an electric bus, developed indigneously for the Indian mass market.

Story by:

Anirudh Raheja

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In a country where mass transit is by means of 1,50,000 diesel-run buses, often accused of attributing carbon dioxide and smog, Ashok Leyland has unveiled a new electric bus called the Circuit. Adding to the efforts of reducing global warming, the Circuit points at a rising transition towards alternate mediums of propulsion in India. Especially electric medias, and in particular buses, which form the backbone of India’s public transport despite the arrival of newer mediums like metro and monorail. Expected to contribute to the paradigm shift in public transportation in India, Ashok Leyland has indigneously developed the Circuit, a full electric bus, ahead of schedule. Unveiled at an event in Chennai, the Circuit bus series is a zero emission vehicle that was completely engineered in India. It was designed keeping in mind the Indian road conditions, and the prevailing load conditions. Varied topography along with usage was also considered. The Circuit thus has been built on a simple, mass-market platform, which aims to reduce operational and maintenance costs.

At the Circuit’s unveiling ceremony, Ambuj Sharma, Additional Chief Secretary, Industries and Commerce, Government of Tamil Nadu, expressed that the government aim is to ensure 20 per cent of the vehicles sold by 2020 should be electric or hybrid in nature. “Where the former will be pure electric, the latter can be mild or strong hybrid. Considering the upfront acquisition cost and running cost, there is a lot that matters. However, moving away from fossil fuels is the need of the hour,” he mentioned. The Circuit, according to

T Venkatraman, Sr. Vice President – Global Bus, Ashok Leyland, is part of the plan to invest Rs. 500 crore towards expanding the bus portfolio. The investment will be phased, and close to Rs. 22 crore have been pumped into the development of the Circuit, he added. Venkatraman revealed that all transport corporations are talking about procurement, and for each of them acquisition cost is important. “We already have three or four STUs which are actively under tendering. Once people see our ability to participate, they will come to us.”

Parts that make the Circuit

If the name ‘Circuit’ sounds unusual for an electric bus, it is also reflective of the change that it taking place in the Indian auto industry. Up to 40 per cent of the parts that make the Circuit are sourced locally. This excludes the Lithium-ion batteries. Their management is a proprietory tech however, and the IPR lies with Ashok Leyland aver sources. Equipped with an alert system that can signal if the bus is low on power, the Circuit has a 120 km travel range on a single charge under standard test conditions. While sources claim that the batteries are sourced from Ashok Leyland partners in the United States, they can be fully recharged in three hours according to Venkatraman. Averred Venkatraman that it is not about usage but about battery management that is important. This, he added, will need to be monitored for charging and discharging of the batteries as part of the vehicle’s usage cycle. “The material can come from anywhere, the whole intelligence of managing the battery is an electronic control knowledge,” opined Venkatraman. The batteries of Circuit, claim sources, are capable of lasting up to seven years depending upon their usage.

Platform strategy

The Circuit bus is part of a platform strategy that will spring new variants and more buses claim industry sources. It would all depend on the requirement, they add. According to Venkatraman, it is possible to make an electric bus with 65-70 seats. However the amount of batteries it will require will simply make it prohibitive, he added. The dimensions, body specifications, and grade-ability of Circuit comply with Urban Bus Specifications II set by the Ministry of Urban Development, Government of India. Developed with technological inputs from Ashok Leyland’s UK subsidiary Optare, which is looked upon as a pioneer of electric buses, the Circuit can seat 31 people excluding the driver. The seating layout is a classic 2×2. Attention has been given to ergonomics. The driver cockpit has been designed to ensure a comfortable drive. From the passenger point of view, a big change is going to be the near noiseless travel. The Circuit emits 78dBA of noise, which is considerably less than the 85dBA noise a conventional diesel bus in the same class emits. The Circuit features on-board wi-fi and USB mobile charger for the convenience of the passengers.

The system

At the heart of the Circuit is a motor. It is coupled to a propeller shaft and the differential. Capable of attaining a top speed of 75 kmph, the Circuit is currently available without air-conditioning. Designed and engineered with a payback period of up to five years, an air-conditioned version will be offered upon demand. Built at Ashok Leyland’s plant at Alwar, Rajasthan, and at Viralimalai, Tamil Nadu, the Circuit, according to Venkatraman, can be rolled out in three weeks from either facility. With focus on cost competitiveness, the Circuit, according to Venkatraman, will be made specific to order. It will, he added, make a good medium for transport at heritage locations and in hilly areas. Sale of 50 units in the current fiscal has been envisaged. The plan is to take this number to 200 units next year. With government offering the subsidy under the Faster Adoption and Manufacturing of (Hybrid) and Electric vehicles (FAME) scheme on a first-come-first serve basis, the onus will be on the STU to engineer a proposal, and seek the subsidy to procure an electric bus. Industry sources claim that the Circuit will be priced in the region of Rs. 1.5 crore.

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Slow, but picking up

The FAME scheme to promote electric and hybrid vehicles received much applause. Its allocation has been subject to scrutiny and criticism. The allocation is said to be not enough. If the FAME has been encouraging for manufacturers to jump on the electric (and hybrid) bandwagon, the need to develop technologies indigenously is calling for more support. For every diesel bus replaced by an electrically propelled one, a whopping 25-tonnes of CO2 emissions can be reduced every year. As per the study by Indian Institute of Science (IISC) that undertook the evaluation of electric vehicles for urban transport, electric buses generate 82 per cent more profit over diesel buses. Revenues too can see a 27 per cent hike. The Circuit electric bus provides Ashok Leyland an opportunity to tap into the FAME scheme, which was launched in April 2014 by the central government, and is part of the ambitious National Electric Mobility Mission Plan (NEMMP). Under NEMMP, the government aspires to put seven million electric and hybrid vehicles on the roads of the country by 2020. Claim industry sources, that in the case of buses, it is the length of the bus and its charging speed that is among the prime factors that decide the level of subsidy. Mentioned Venkatraman, “We need to work with our partners, and engage with battery manufacturers to figure out what more we can do to make the electric bus more efficient.”

T. Venkatraman, Senior Vice President – Buses, Ashok Leyland Ltd.

Q. How do you look at the FAME scheme?

A. Since pollution is surging in cities, the government is compelled to offer an option, and say that they will increase the subsidy. If it will be sensibly priced, more and more people will respond to it. More subsidy will translate into easier availability of battery technology, which would make electric vehicles a more engaging option. Himachal Pradesh and Chandigarh are offering a VAT subsidy. It is about making it happen. It is about work in progress. We need to see what can be done to make this happen. I can explain FAME to them, but the STU has to put together a proposal and seek the subsidy from the government. This is about first-come-first-serve subsidy.

Q. How do you see the ecosystem developing for electric vehicles in India?

A. We need to work with our partners to make it sensible. We have to engage more with the battery manufacturers and figure out what else can be done to make it more efficient. We have the ability and the know how to put it together. This vehicle is a 30-seater vehicle, which we can take up to 65-70 seats. But the amount of batteries it will call for will make it prohibitive. Our team is already working on that, and commercialisation is the key.

Q. How much time will it take to roll out one bus?

A. The bus can be rolled out in three weeks. It does not have too many aggregates put together, and it is more about assembly kind of situation. It is all about balancing the technology right. The bus can be rolled out in three weeks, provided the aggregates have been agreed upon, and the prototype is approved. If it is a brand new product to be built ground up, then it would take three months. There are many players who are importing this vehicle (an electric bus) from various parts of the world. There is a Chinese company that announced that it is setting up a plant in India. To us, the USP will be a mid-size vehicle, which has been completely developed in India. This would not be made to stock but made to order. We will serve what the customer wants. It would depend upon the application and the required battery.

Q. What about battery life in such applications?

A. Battery life, depending upon usage, is seven years.

Q. Which facility will the Circuit be made at?

A. The bus can be rolled out from either of our seven plants. For us, it is logistics that will play an important role. It will influence vehicle cost. Depending upon the demand, we would like to build this bus at a location that is closer to the customer. This would help to keep the vehicle’s logistics costs low. Our plants are fully equipped to facilitate technology transfer from one location to the other. The bus, we are aiming at city application, feeder routes offering last mile connectivity, and at tarmac. Tourist will be targetted as we move forward.

Q. Where are you sourcing the batteries from?

A. A battery is very important for an electric vehicle like the Circuit. It is therefore not about usage, but about how the battery is managed. The (battery) material can come from anywhere, the intelligence of managing the battery is about electronic control knowledge. For now, a Lithium-ion battery technology is good enough. A breakthrough in battery technology is expected as efforts to reduce the battery weight are on. Efforts are on to make it safer, smaller and more powerful. The battery is currently being sourced from the USA. We are working with three to four companies simultaneously. These include Malcom and Valence. It (battery) is something that we need to be very careful about. Many have tried and failed. Excessive heat is often the reason. We would like to minimise the risk first. We would like to work with the company which validates it under expert supervision.

Q. What is the effect of AC in terms of performance?

A. The AC will roughly take about 35-40 per cent off the distance travelled. This will necessitate an increase in battery power. The battery will need to be managed in a modular way as the arrays are increased. This can be managed. A power bank is a decent business model, but calls for a need to balance the batteries. When you have multiple batteries you can’t have different charging in different batteries. The mismatch of charge will create a surge.

Q. What investment would such activities attract in the future?

A. For the expansion of our bus plant, we have put in more than Rs. 500 crore, which stands relevant for multi-application and not just this product. Out of this, roughly 10 per cent of the investment will be routed to such an application. Some transport corporations are talking about procurement of an electric bus. For each of them it is the acquisition cost that matters. We have already got three or four STUs which are actively under tendering. Once our ability to participate is evident, they (STUs) will come to us. We are trying to ensure that the subsidy is sensible.

Q. What are the critical issues when it comes to electric vehicles?

A. Monitoring and discipline are essential when it comes to the operation of electric vehicles; their charging cycle and their usage. This includes carrying out of the necessary checks. An interesting part is, an electric bus will not throw the kind of surprises a diesel bus could. Considering the fact that alternate fuel is the cause of concern as well as the most relevant topic the world over, each programme calls for a robust structure. There is a need for infrastructure to be in place before an experiement with technology is carried out. An example is the need of CNG pumps to ensure a constant and consistent supply of gas before the technology is made commercially available. We believe that an experiment is easy since one can work with the currently available power options and then build the infrastructure. Factors like how the cost of battery can be brought down matter. Reduction in cost has an effect on the payback period, and is thus important. If payback period goes down, a lot of electric vehicles will hit the road.