Lumax to now focus maximum resources, investments on electronics division for EV transition

The global automotive industry will soon transition fully towards electric vehicles. That said, how will some auto component manufacturers cope with many components becoming redundant in the future? We chat with Lumax Auto Components to find out.

By:January 16, 2021 12:44 PM
Vikas Marwah, CEO Lumax Auto Technologies Limited

Recently, the United Kingdom government announced that it will soon disallow the sale of vehicles powered by internal combustion engines. From 2030, the UK’s auto market is said to only offer choices between electric vehicles. The major announcement lit a fire under many companies and parties involved in the matter. Seeing the announcement, other nations have started to chalk paths along similar lines. They plan to follow suit eventually… once the niggles with electric vehicles have been ironed out. Here in India, the knowledge and demand for battery electric vehicles is still in its infancy but is gradually gaining traction at a steady pace. 

While the UK may shift to EVs from 2030, the ICE will continue to be available and running for some time around the world.

Lumax Auto Technologies is a company that supplies a diverse range of products to OEMs as a Tier 1 supplier. In an interview with Express Drives, Vikas Marwah, CEO Lumax Auto Technologies Limited stated that many Tier 1 suppliers would, of course, like to be present in the EV space. Being able to supply motors, controllers, batteries and more. But only a certain number of companies can be a part of the domain to supply to a certain number of customers. 

Impact of EV transition on Lumax

As Lumax Auto Components manufactures a diverse range of automotive parts, Marwah claims that Lumax currently does not see a major impact on redundancies to its portfolio. 

He stated “When we map our own portfolio, more than 75% of our products currently do not foresee any form of redundancy or obsolescence. These products have been very carefully chosen. They will continue to be required for electric vehicles as well as the ICE vehicles.”

Lumax automotive component products including automatic gearshift lever, diesel vehicle ad-blue tank and flexible hosing

Lumax to shift focus

Marwah stated that Lumax was working on expanding towards manufacturing EV specific components — motors, controllers, onboard chargers among other diagnostic systems. However, plans are now on the drawing board as the strategy is being redefined due to the pandemic. In addition to the issues with Chinese imported goods is another factor that has put a halt in the plans. Although, Marwah believes there is still time to strategise and execute.

Notably, Marwah confirmed that moving forward, Lumax plans to shift focus towards its electronics division. He mentioned; “we have decided that our electronics division will be getting our maximum resources and our maximum investments. So that at some point of time, if the technology collaboration or access from outside is to be taken, then a lot of localisation abilities are already in place. So we are busy firming up the infrastructure for that localisation capability to serve not only the EVs but continue to serve the ICE demands as well.”

Who will transition to electric vehicles first?

Marwah highlighted that it is likely that the two and three-wheeler EV space in India will be the first to transition. This is down to the fact that they are simpler to design and manufacture, and the players in the space have been working aggressively in the field. Additionally, the charging infrastructure currently is more accessible to them. 

He touched upon the fact that with the government’s push, it is likely that we will see the transition from the public transport sector first. It would include electric two and three-wheelers, in addition to electric coaches, electric busses and mini people carriers. The four-wheeler or passenger car market would most likely be the last to properly transition to electric mobility.

Auto Supply Chain Revolution

As the world is transitioning to BEVs, it raises the question of the impact on the industry that supplies to the OEM brands. Some companies may be diverse enough to survive this transition. But some companies who may have been legendary experts in manufacturing a certain type of components for the internal combustion engine (ICE), may now be classified as one-trick-ponies. If a Tier 1 company only supplies parts that fit within an ICE, they may find themselves becoming redundant with it.

There still may be time for the automobile to go entirely electric in India as well as the rest of the world. Electric vehicles are currently limited by a few factors; the high costs due to the batteries, the time they take to charge up, naturally leading to range anxiety and finally, the charging infrastructure or lack thereof. 

However, once there is a definite breakthrough in battery technology and adequate infrastructure is present to support it, the revolution is expected to pick up the pace rapidly. 

Going back to Marwah’s initial statement, it is clear that there will be a certain number of companies that can supply to a limited number of OEMs to cater to the finite customer demand. The space to supply will be limited and would become crowded.

Naturally, we will see the supply chain of the automotive industry witness a major revolution soon. At the moment, time seems to be in their favour, but it is also of the essence. It is evident that the sooner these companies can adapt, there is a higher chance of their survival.

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