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Critical EV components to be localised by 2030
Industry News- Jul 03,24
Achieving 100% localisation in India is not feasible due to the scarcity of certain rare earth materials, limited lithium-ion mining, and low levels of electronics manufacturing.
Several critical components, including batteries, necessary for manufacturing electric vehicles (EVs) are anticipated to see substantial localisation in India by 2030, according to a Frost & Sullivan report.
India’s electric vehicle industry has made significant progress, boosted by government subsidies, growing consumer acceptance, and increasing product launches.
Factors such as an expanding product portfolio, enhanced charging infrastructure, better financing options, and a gradual reduction in battery prices are expected to further accelerate EV penetration across various segments in the coming years.
The auto components market for electric vehicles presents a vast opportunity. Production Linked Incentive (PLI) programmes for batteries are expected to boost battery manufacturing in India. Under this scheme, 67 applicants for the Component Champion Incentive scheme have been approved.
The new EV policy framework by the Indian government mandates that companies entering the EV manufacturing sector must establish facilities within three years and achieve a localisation threshold of 50% within five years.
“Localisation of EV parts will be an effort from all the stakeholders, including government incentives schemes, OEMs, and battery manufacturers. PLI scheme will be one of the major supports for the manufacturing batteries at a cell level which is the most important step in localisation of battery manufacturing,” Prajhot N Sathe, Research Director, Mobility-Electric Vehicles, Frost & Sullivan told the source.
Progress in battery technology and vehicle compatibility with advanced technologies is crucial for the rapid growth of EVs. However, achieving 100% localisation in India is not feasible due to the scarcity of certain rare earth materials, limited lithium-ion mining, and low levels of electronics manufacturing.
Key components such as batteries are expected to reach a localisation level of 40-50% by 2030, up from 20-25% in 2023. Power and control wiring harnesses, along with connectors, could reach 60-70%, up from 15-35%, while AC charging inlet type-2 might achieve 70-80% localisation, rising from 35-50%.
Similarly, localisation in components like DC converters, MCBs, circuit breakers, electric safety devices (power electronics), electric compressors, and DC charging inlets could increase to 60-70% by 2030 from 0-30%, the report noted.
The main reason for the expected increase in the percentage of localisation is the fact that the majority of the global EV components suppliers have a presence in India and are looking forward to high volumes that will support the economies of scale. Therefore, global EV suppliers can leverage their expertise and support the Indian EV market, said Sathe.
It is also gathered that India could achieve higher localisation in motors and controllers due to existing capabilities in hubs like Coimbatore.
“There will indeed be high localisation in motors and controllers which is again mainly due to global EV components suppliers of motors and controllers having an establishment in India which will be leveraged for the Indian market,” he felt.
India is well-positioned to develop its electric mobility ecosystem over the next decade, especially for two-wheelers (E2W) and three-wheelers (E3W), with government incentives and policies fostering growth. However, developing capabilities in the four-wheeler (E4W) segment is expected to take longer, the report highlighted.
(Source: BusinessLine)
EV components
EV
batteries
Prajhot N Sathe
auto components
electric vehicles
Frost & Sullivan
EV manufacturing
battery manufacturing
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