Indian EV industry looks for a way around Covid-19

BENGALURU | MUMBAI: India’s fledgling electric vehicle (EV) industry may see growth stall on a shortage of lithium-ion cells and critical electronic components, as the Covid-19 virus outbreak continues to impact supply chains in China and East Asian countries.The automobile sector in India is forecasting a 10% slowdown in sales due to raw material shortages because of the outbreak, but the hit on the EV sector is expected to be higher since it relies heavily on imported cells and other electronics. Tata Motors, Bajaj Auto, TVS, Mahindra & Mahindra, Ather Energy and Hero Electric are evaluating options to mitigate the impact, industry executives and analysts told ET. “EV makers have been doing a good job of localising components and traditional companies have localised heavily…but the most important piece, the cells, are still being imported,” said an auto industry executive on condition of anonymity since he is not authorised to speak to the media.Most EV makers manufacture lithium-ion battery packs in-house but import the cells directly from large suppliers such as Samsung, LG, Panasonic and a slew of Chinese manufacturers due to a lack of manufacturing capacity in the country.Some established EV makers have a supply runway of a couple of months for imported components. Others are looking at alternative suppliers for components. “While components can be taken care of to some extent, at least in the short run as manufacturers usually keep 2-3 months’ stocks, batteries and battery cells, on the other hand, are imported in small batches since they come with a limited warranty,” said Sohinder Gill, CEO of Hero Electric. “Manufacturers do not maintain large inventories (of cells).”Startups that cannot procure large quantities of cells and electronics components have already run out of stock, people in the know told ET. Although their customer orders are small, they are unable to plan launches and service existing orders.“The impact is not very direct because we’ve localised almost everything in the last 12 months, but there’s an indirect impact because raw materials, cells and lots of passive components in electronics come from China, S. Korea and Taiwan,” said Tarun Mehta, CEO of Ather Energy, a startup servicing the high-end EV scooter market.Ather, which launched its improved 450X model targeting cities beyond Bengaluru and Chennai, has a supply runway of about two months, he added. Bajaj launched its Chetak scooter, TVS introduced its iQube and Tata Motors unveiled its Nexon EV in first two months of this year. “...we are consistently monitoring developments…and exploring suppliers in other regions and are looking to localise within India,” a TVS spokesperson said, albeit not specifically about its EV outlook.Bajaj Auto and Tata Motors did not respond to emailed queries, while Mahindra and Mahindra could not be reached for comment. To be sure, EV sales in India are still tiny compared to internal combustion engine-powered vehicles.

from Economic Times https://ift.tt/2PGO4E5