The global electric vehicle (EV) market is developing at a rapid pace. As per the database of EV Volumes, the EV share worldwide has reached 8.3% in 2021 from 4.2% in 2020(1). A whopping 108% increase. EVs are garnering tremendous attention across the world as they are energy efficient and contribute to reducing urban air and noise pollution. The EV market in India is also proliferating speedily. Currently, the Indian EV market is valued at around $ 220 Million (2020) and is expected to grow at a CAGR of 90% till 2030(2). The year 2021 accounted for a sale of around 0.32 million vehicles, a 168% growth YOY3.
Outlook: Next 5 years
EVs in India are gathering momentum and a lot of government policies are giving a boost to the domestic EV industry.
The 2021 PLI (production linked incentives) scheme of USD 12.6 Billion to incentivize the domestic production of lithium-ion batteries
The 2020 “Charging infrastructure for EV” guidelines for capping the per-unit cost for charging an EV at a public station
The 2019 FAME II (Faster Adoption and Manufacturing of Electric Vehicles) scheme to generate EV demand with a focus on shared transport
It is expected that the 2W and 3W auto segment will spearhead the adoption curve followed by e-buses and passenger taxis, while 4Ws are likely to be the laggards owing to the gaps like high prices, low performance, and insufficient battery promise.
However, the transition is an excellent opportunity for India to become a hub of EV manufacturing at a global level.
The constituent blocks of building an EV are:
Motor: - The electric motor draws energy from the battery and runs on the AC power to rotate the wheels.
Battery –The EV battery is the electrical storage tank that stores the energy in the form of a DC current. It is laid out as a panel under the car belly.
DC-DC Converter - The converter distributes the power from the battery to a required level and provides the voltage required to charge the battery.
Semiconductors: - Constitutes the computing backbone across all electronic systems in an EV. They are essential to performing critical functions like ADAS (advanced driver assistance systems), regenerative braking, cameras, emergency brakes, navigation, sensors, and much more.
Steel: An ubiquitous constituent for vehicular electrification
The switch toward EVs continues to be an important part of the automotive manufacturers’ sustainability plans. In that endeavor, steel is well-positioned to act as an important constituent in the transition towards vehicular electrification. Steel continues to remain the preferred material for EV body structure, closures, and battery enclosures. Its inherent strength and ductility make it the best suited for EV’s structural performance and battery packaging requirements. Steel also helps to achieve goals like cost efficiency, lightweight and sustainability benefits while meeting safety standards. As far as the main components of an electrical vehicle are concerned, steel is used as follows:
Motor: An electric motor depends on steel to propel a vehicle forward. The electrical steel used in electric motors is only 0.2-0.35 mm thick as compared to the material used in traditional electric motors (0.5-0.65 mm). Non-oriented electric steel is used in the making of an electric motor. This helps in the reduction of core losses which makes the electric motors more efficient.
Body: The EV body construction focuses majorly on four things – lightweight, cost-effectiveness, processing requirements, and sustainability in terms of recycling. If there is a material that fulfills all these conditions, it has to be steel. High-strength steel is an important basis for modern EV construction due to its strength and stiffness. It can reduce the weight of an EV by up to 40%.
Battery: - The battery casting has to be resilient to temperature, chemicals, and fire. The casting needs to provide crash safety and series production suitability for EV batteries. High-performance stainless steel helps automotive manufacturers to address these challenges. It offers a wide range of characteristics that resolves the issues related to the design and construction of an EV battery.
Way forward for the automotive manufacturers: OEMs and MSME
The majority of the automotive manufacturers and ancillary suppliers currently deal in the conventional Internal Combustion Engine (ICE) landscape. However, the level of acceleration and innovation in the EV market of India warrants the OEMs and the MSMEs to adapt to the transformation. The EV landscape is going to remain an important contributor to India’s COP26 commitments and there is an opportunity for hundreds of entrepreneurs and organizations to be a part of India’s growth story. Some of such opportunities are:
Connectors and Sensors: - The EV Sensors and connectors market is poised for breakout growth. Automotive manufacturers are integrating more sensors in their vehicles to meet the productivity demands of the customers. In addition, there is also a huge scope for improvement in traditional sensors and sensors mechanisms in order to increase vehicular performance and reliability. It is also expected that due to the implementation of BS-VI standards, the demand for sensors like oxygen sensors and battery sensors will also take off
Charging stations: - EV charging stations are the quick wins as compared to the other opportunity segments. There are practically no operational expenses in the business of developing charging stations. As far as the setting up cost is concerned, that is also fairly low and no license is required to build an EV charging infrastructure. Hence, the expenses of setting up an EV charging infrastructure are very limited restricted to chargers, electricity, software, advertising, employees, and maintenance. MSMEs can also explore the franchise option where the investment is as low as INR 6-7 Lacs.
Expand the product portfolio and offerings: - There are multiple ways to do this. MSMEs can expand their portfolio by integrating components like batteries, battery materials, electric motors, and power electronics into their portfolio, in addition to ancillaries like electric motors and forged wheels. The demand for such components is bound to surge with EV penetration. The other way to do so is the expand the after-market offerings like parking cameras, touchscreen controls, telematics, climate control, etc. Aftermarket offerings are a great way to capitalise on a ready market while entering a new landscape.
Collaborations and tie-ups: - Collaborating and co-creating new business models and consumer offerings for emerging ecosystems like EV will enable the MSMEs to tap an underutilised manufacturing base. It is worth mentioning that MSMEs need to exigently form such partnerships. The evolution is happening at an accelerated pace and an early reaction can pave a way for these MSMEs and OEMs to secure their position in this exciting new future.
India’s journey towards electric mobility has become a game-changer in the Indian automotive industry. With the demand for EVs set to reach 102 million units in this decade, MSMEs and OEMs should gear up to lead the change. One major problem that MSMEs face is sourcing and procurement especially if the desired quantity is small, which calls for platforms like JSW One MSME, a tech marketplace especially built with the vision to be a one-stop solution for the steel requirements for MSMEs.
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