Girish Wagh: I think in M&HCV Cargo we have seen some softening but I can probably attribute that to post festive season drop in fret, so future expectations still remains strong. In tippers the Sentiment Index has improved marginally. That is also expected because the previous one was during monsoons were the tipper usage is low. In ILCV it has dipped a bit again because of post season post festive season impact and for small commercial vehicles it remains quite stable.
P.B. Balaji: Yes. And linked to that question from . In the medium term how is fuel mix change happening as far as your opinion between CNG, EV adoption bus, ICVM, how does it — how should one think about it.
Girish Wagh: So I think as we go ahead the pathway is going to be through CNG or LNG. As far as CNG penetration is concerned, currently I think the bigger anxiety is the volatility in CNG prices with the CNG prices actually went up very fast. So that is a bigger anxiety in the minds of the customers with actions that the government has taken, and once the CNG prices do stabilize at this level or a bit lower level CNG vehicles do have an inherent TCO advantage. So one will see a fair bit of penetration happening again in ILCV and SCV segments. As far as long range is concerned, yes, I think two customers will start coming in because I think the OEMs have addressed the range issue. So we have some trucks which we launched which can run for 1,000 kilometers on CNG.
As far as LNG is concerned, I think this depends on availability of filling infrastructure, otherwise I think we are ready with the product. In terms of EV, I think one we clearly see higher penetration in buses first because of the government push. And one will also see a good penetration happening in the last mile distribution due to the pull from companies who are having their own net zero greenhouse gas emission commitments. I think that’s how we will see EV penetration happening more in buses and small commercial. Shailesh?
Shailesh Chandra: I have to talk about the CV?
P.B. Balaji: Yes.
Shailesh Chandra: My view is that, see if we have to take a view by the end of this decade, the mix will be around 25% to 30% for CNG, 25% to 30% for EV and rest would be gasoline, but the timing of ex-fuel, because that is the direction investing are going. Diesel will significantly come down below 5%. So, that’s probably the outlook.
P.B. Balaji: Thank you. The question from Binay Singh, Morgan Stanley. We seeing price cuts in EVs in China and other regions, do you see that as a risk to ICE pricing for the entry level cars? As well as — as JRR launches in EVs as well, that’s another angle as well?
Adrian Mardell: Sorry, Balaji.
P.B. Balaji: No, I’m saying, with the price cuts that we’re seeing in China, do you see that as a risk to the ICE pricing for Jaguar entry in mid and large, and EV profitability as JLR launches it’s EVs in 2024?
Adrian Mardell: Yes. No, we don’t at this point actually recognized another a lot of our smaller units, smaller value transacting price units in China are generated within China within the joint venture. We don’t see any risk at this point in time or any evidence of this until weakened prices for any of our imported, was in fact, the VME reference back to the previous question, the average VME last quarter, which will be the first sign of that of course, the average VME last quarter was as low as 0.8% across all units imported into China. So we’ve seen very, very low levels and strong demand at this point.
P.B. Balaji: Thanks. And on the PV side we already answered the question on the EV price cuts that have happened, but another angle to it, with the raw material cost index not coming down, how do you see the EV profitability going forward.
Adrian Mardell: I think we need to keep in mind that one, there is a relative premium that a customer is ready to pay for EV versus ICE and that is about 25% to 30%. ICE prices are going to go up, so therefore it will support the higher price for EVs, while the secular trend of the competence for EVs will keep on coming down, there has been a temporary volatility that we have seen in the battery prices, which was very steep last calendar year. But also already has started moderating. This year we have more long-term view of the battery prices, rest of the companies are coming down also as the scale is increasing. So there will be short-term pressure on the cost because of these temporary volatilities but we have to focus on driving the scale because that is what is going to bring down the cost further as we are driving the deeper localization.
You also need to remember that the next three, four years will be the benefit of PLI also which we indicated. And so I think keeping all these in mind, it is going to be in mid-term very beneficial from a mix perspective.
P.B. Balaji: Thanks Shailesh. I think with that we are done with all the questions that I’ve been asked in terms of just the team rather than the names. So there is anything else that you want us to answer, I would suggest reach out with the Investor Relations team and will be more than happy to respond to you. So thanks a lot for taking the time to attend the session. We hope you found it informative and look forward to catching up with you soon. Thank you.
