- Ather Energy CEO Tarun Mehta advocated for 10-15% R&D spending of the companies to boost the quality of products.
Ather Energy CEO Tarun Mehta has advocated for increased spending on research and development (R&D) by Indian auto companies. In a post on social media platform X (previously known as Twitter), Mehta stated that entrepreneurs need to target and R&D of a million engineers in India. He cited the example of the Chinese electric vehicle giant BYD, which apparently has more people in R&D than the rest of the auto industry outside of China combined.
Mehta wrote that the most important progress is technological progress and China is doing a good job on this. He also wrote that BYD is the largest electric vehicle manufacturer in the country and that’s because they have been investing heavily in R&D. “An RnD team size approaching 100K people with some 20-30K engineers hired last year alone! Almost 10% of their revenue is spent on RnD, even at the scale of $40-50B in annual revenues,” he wrote.
Mehta further wrote that India needs to immensely focus on R&D. “Given the demographic advantage we are sitting on, our policy focus on RnD needs to go up in an immense way. Remember, suppliers come and set up capacities where OEMs produce. OEMs produce where their new product development (NPD) happens. And NPD happens where there are engineers. That’s why China today wins the NPD game so that it can continue to maintain its eventual manufacturing advantage,” Ather Energy CEO explained. In his post, Mehta wrote that the Indian companies are often quite happy seeing a three to four per cent R&D spend. However, this spending should be at least 10-15 per cent in all critical sectors, he believes.
Interestingly, Mehta’s comment comes at a time when Indian auto companies have been accused of not investing heavily in the R&D of their products in an attempt to boost the quality of the products. However, over the last few years, several automakers in the country have been fuelling their R&D effort in a massive manner.
First Published Date: 29 Apr 2024, 09:40 AM IST