The Indian auto industry is one of the largest in the world. The industry accounts for 7.1 per cent of the country's gross domestic product (GDP). Production of passenger vehicles, commercial vehicles, three-wheelers and two-wheelers grew at 14.41 per cent year-on-year between April-February 2017-18 to 26,402,671 vehicles. The auto industry is set to witness major changes in the form of electric vehicles (EVs), shared mobility, Bharat Stage-VI emission and safety norms.
Energy Efficiency Services Ltd (EESL), spearheading the electric mobility initiative in India, had floated a global tender for 10,000 electric vehicles (EVs) last year to replace the state-owned fleet in line with the government’s vision to switch to 100 per cent electric mobility by 2030. It intends to procure 20,000 EVs by March 2019 with an investment of Rs 24 billion.
Even online cab aggregators like Ola and Uber have recognised this change and have taken steps to introduce electric vehicles on their platform in India.
Electric vehicles are set to make an impact on the Rs 3 trillion India’s auto component industry. According ACMA, and Roland Berger, the demand from vehicle buyers will result in a 15 per cent penetration of EVs in India by 2025. With a regulatory push, it could be 18 per cent and it could even double to 35 per cent if deployment is in accelerated mode. An EV has 80 per cent fewer moving parts compared to an IC engine vehicle and undergo less wear and tear, which will also negatively impact after sales revenue of the industry. An EV gearbox is much simpler and maintenance requirements are lower unlike in an IC engine where the spark plugs and engine oil need to be regularly changed. Most of these components are absent in an EV. Thus the requirement of maintaining or changing particulate filters, mufflers, turbochargers, and the like is just not there. The semiconductor powertrain in EVs is six to 10 times more than that in any IC engine vehicle and so this will require a change too.The effort to make the body light will see the use of plastic over metal. Even the 500 charging stations need to pole vault to over 3,00,000 to cater to the needs. Socially too, 50 per cent of the 3.3 million jobs will be impacted.
The forecast is that India will make 8 per cent of the world’s EV components by 2025. Companies are working with an agenda ‘under the wraps’. Mobility has seen disruption but the opportunity is unfolding for India to seek its rightful space under the sun.