How India can be an EV manufacturing powerhouse: Global supply chain issues and their solutions

While on one hand there is a rise in global demand for EVs, on the other, leading countries striving to develop and export EV parts are facing the heat due to supply chain disruption.

Updated: Mar 10, 2021 3:18 PM

Electric vehicles will be the highlight of future mobility. Traditional ICE vehicles and slowly but surely contributing to the deteriorating our environment, and consumers are becoming cognizant of the repercussions. New age consumers are more conscious than ever before and entire countries are pledging towards cleaner mobility.

However, it is also true that any change in the global automotive supply chain will not only impact the industry – the suppliers, logistics operators, etc. – but also affect all major economies and numerous nations across the world. It is for this reason that, while on one hand there is a rise in global demand for EVs, on the other, leading countries striving to develop and export EV parts are facing the heat due to supply chain disruption.

India is gravitating towards EV mobility – Is manufacturing on the cards?

Electric mobility is not a new concept in India. In fact, the country’s push towards adopting sustainable mobility has been commendable. From leading OEMs introducing powerful EVs to innovative start-ups introducing new concepts and the government supplementing these efforts with favorable policies, the EV space is growing at full throttle. So, can India overcome the global supply chain issues by emerging as a high-power manufacturer? The answer might just be a resounding yes.

The Indian powers that be have identified that the country’s dependence on foreign entities, which are competitors for EV parts has been holding us back from reaching our full potential. Self-reliance, thus, has become the new path to success for the country, especially the EV space. In unison, the industry’s stakeholders believe that an Aatmanirbhar Bharat will unlock endless opportunities for the dynamically-growing EV industry. One of these highly lucrative growth avenues would be a manufacturing hub for EV parts.

A country brimming with skilled professionals with the drive to change the world, India’s supply ecosystem has the potential to develop EV parts with the greatest of ease. Indian engineering capabilities have been quick to adopt EV technology, and EV manufacturing technology can be adopted with similar agility. This, quite recently, was also corroborated by Union Minister Nitin Gadkari who said that India will emerge as an EV manufacturing hub in the next 5 years.

How will this goal pan out in actuality? Emerging as the new hub for FDI will be the first stepping stone. The country has been witnessing favorable FDI policies, and by collaborating with foreign technology partners who will enter India, we have the limitless potential to become a global superpower in electric vehicle manufacturing. In doing so, we will also be able to establish a local supply chain that will create more jobs in the country, give the economy a boost, and help us reduce the upfront cost of EVs – a challenge that has been hindering the sector’s growth thus far.

Another benefit of bringing the supply chain close to home? Stronger quality control and assurance measures. With the quick resolution of quality issues, we will be able to cut costs, bolster production and be able to adopt a lean supply chain. This, in turn, will reduce the working capital requirement, ultimately helping OEMs achieve their quantity and quality targets in terms of manufacturing cost-effective, innovative, locally-made EVs not just for the country but for the world.

Mapping the road ahead

The past few years have witnessed explosive growth in demand for EVs, and this is not projected to dwindle anytime soon. In fact, electric scooter adoption has undergone 100% YOY growth over the past 4 years. Now, manufacturers are also introducing new, technologically-superior, nimble EVs such as electric cycles or even e-scooters that can double as e-cycles. The creative opportunities, therefore, are endless. As consumers are also exploring new avenues, we will continue to see growth trends in EV adoption.

At this juncture, the need of the hour would be for the state and central government to encourage local manufacturing of electric mobility parts by supporting component manufacturers by way of favorable policies and incentives. The greatest beneficiaries of the local supply chain will be the country’s consumers, who will then get access to higher-quality, low-cost EVs, allowing more and more people to become a part of the EV revolution. India’s EV sector is projected to be valued at $600 million by 2025, and a local supply chain will have a major role to play in this growth.

Author: Rahul Shonak, COO, Nexzu Mobility

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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