The ParkMyFleet executive team recently caught up with Rajarshi Sahai, Chief Business Officer at Adaptive City Mobility, on Zoom to discuss his varied career, how Covid-19 impacted the mobility and what we can expect to see in the immediate future in the industry, particularly in the electrification space.
Tell us about yourself.
I started out as an architect, but as my understanding of the environment and society grew, I transitioned into urban planning. I worked on revitalization projects, slum development, and business improvement districts in Canada, the UK and across Asia, which became my initial motivation towards mobility. For example, [I was drawn to ] how mobility could transform opportunities for marginalized populations and make services in a city more accessible.
Progressively, I started to do strategy consulting, working with cities, especially in the UK and emerging markets on public transportation and city development strategies.
When I moved back to Europe from Asia, I got into the venture capital sector. As a mobility focussed VC partner, I invested in the pragmatic solutions for the future of mobility. That’s when I got involved with Adaptive City Mobility, an electric vehicle startup. Now, I am the company’s full-time Chief Business Officer.
What key developments will we see in the mobility industry in the near future?
I am a strong believer in mobility as a basic need. Some key trends will include mass-electrification, shared modes (public transport, ride-sharing, last-mile solutions, among others), and increasing efficiencies in the movement of passengers and goods. As more connected assets and intelligent (routing) algorithms come together, we will waste less time, money, and energy in moving people and goods.
The shift towards electric vehicles at scale will reduce costs for key components — like batteries and powertrains — while the prices will follow with a significant lag. The total cost of ownership will also decrease with the efficiency of electric powertrains and incentive-adjusted cost of vehicles. Demand for electric vehicles (and their use) will far outstrip supply for at least the decade to come. We will therefore see profitability increase for sensible electric vehicles as well as the electric fleets in operation.
Mobility itself will increasingly encourage the trend towards less private vehicle ownership and more of a focus on usage and utility.
While autonomy will remain a distant objective, we will see increasing benefits in safety and efficient use of infrastructure with advanced driver assistance systems and integrated telematics solutions that assist with a variety of driving functions.
Above all, I do hope that we achieve the Paris Climate Goals by an accelerated push towards zero carbon in mobility.
Besides cost and scaling electrification, what do you think are some of the main challenges the mobility industry is facing?
Supply chains are a challenge right now. The whole idea of supply chains and how mobility companies would create an ecosystem for “just-in-time delivery” of every component for the vehicle is now being challenged by the new realities.
On one hand, the increasing number of electronic chips and software complexity is pitting OEMs directly in competition with consumer electronics, which have a greater capacity to spend and higher margins for suppliers.
On the other hand, some messages have been lost in the widespread adoption of just-in-time principles in the industry that is now exposing them to every supply disruption due to the Covid-19 pandemic and climate-induced disasters.
Here, again, the electronics industry has far surpassed the efficiencies and methods being used by the automotive sector in the West. Because electric cars are more akin to an appliance or an electronic object, I think it’s high time that the automotive supply chain is also optimized along the lines of electronics like cellular phones.
Similarly, there’s the challenge of corporate restructuring and de-risking in the face of electrification.
Every major legacy brand is faced with thousands of workers, component suppliers and ancillaries that are still stuck in the ways of the ICE vehicle industry. Capital investments in land, factories and machinery are often driven by incentives given by local and national governments.
As we shift from ICE vehicles to electric vehicles, the local supply chains in many such locations are no longer competitive in a global market. Often, the electric vehicle product lines are limited runs or retrofitted vehicles, rather than an outright shift to the electrified era of production and company structure.
Treating ICE capacity as a cash cow that slowly funds an EV business line is fundamentally value eroding. These companies may soon be faced with unexpected and massive demand for EVs (and an abject apathy towards ICE vehicles) that will bring down some legacy giants in the process.
How is technology going to revolutionize the auto industry?
At the consumer end, what’s changing is people like me. I don’t care for a big SUV anymore. In fact, in Amsterdam, I just walk or ride a pedal bicycle. I’m more interested in what experiences I can have and what can satiate my latent needs. Much of the technology sector that we see around us — social media, video conferencing and apps, for example — is about these latent needs, the pertinent needs. Video meetings have become a need, a way to work and not just a luxury, anymore. Similarly, the automotive industry has to adapt to the new reality of mobility needs versus ownership status.
At the manufacturing end, we have seen a lot of production capacity go out of service. That’s due, in part, to stunted demand and disruptions and because of obsolescence in the face of electrification and limited capital for industry-wide refurbishing. I see a great opportunity for the automotive industry to go “fabless.” That’s when a company designs and sells hardware devices (like microchips) but outsources the production efforts.
A fabless approach also allows for far greater economies of scale and offsetting of capital intensity to such scale operators.
How do you see the lack of charging infrastructure playing out?
Electrification indeed is a “chicken and egg” kind of problem. In the traditional electric vehicle space, we are stuck with the conundrum of not having enough fast chargers or electric vehicles to justify infrastructure improvements and investments to justify implementing more fast charging grids.
This is exactly the kind of problem we are solving at Adaptive City Mobility. Once you move from the electric clones of big SUVs, it is possible to have compact yet spacious four-wheeler vehicles that rely on smaller motors and batteries that can be charged using existing home plugs in a reasonable amount of time, about five to eight hours.
We have, in a way, limited the entire plethora of charging possibilities by unnecessarily focusing on one and only one way, which is this fast charging. What we really need to understand is that this is an ecosystem, and the more possibilities you have, even from a charging point of view, the easier it would be to surmount this challenge, which is energizing the electric fleets at large.
If you could give one piece of advice to leaders in the industry, what would it be?
Electrification is real. It is happening. There is no way to circumnavigate this shift, and so we better start preparing for it really well, start provisioning for it really well. It’s an opportunity of great proportions awaiting us once we embrace the change.
My colleagues and I are big believers in a second wave of electrification – a move from electric hypercars and fast luxurious sedans and SUVs to the general shift to EVs across segments, particularly in the mainstream and utility end of the market. Once we see the efficiencies of going electric in the segments where every penny saved per mile matters, there will be no stopping this electrification juggernaut.
