TOKYO — Japanese trading house Mitsui & Co. will produce electric vehicle motors in India in partnership with Taiwanese motor manufacturer Teco Electric and Machinery, likely becoming the first Japanese company to make EV motors in the country.
Teco is the world’s fourth-largest industrial motor maker, with annual sales of around $1.63 billion. The Taiwanese company has also made components for Taiwan’s high-speed trains.
The two companies will build a 1.5 billion yen ($13.6 million) plant in Bangalore through a joint venture 40% owned by Mitsui and 60% by Teco. The 5,500-sq.-meter factory is scheduled to come online in December.
The plant will have just over 200 employees and will be able to turn out 110,000 motors — 60,000 EV motors and 50,000 industrial motors — a year in a two-shift system. There is also room for additional building on the site.
Mitsui will increase production by making two types of motors. While industrial motors require manual work, such as assembly and inspection, the Japanese trader believes it can make motors cheaply in India, where labor costs are low. It will also consider automating production of EV motors if it can obtain enough orders.
The Japanese company will be in charge of marketing for the joint venture. Rivals include Switzerland’s ABB, Germany’s Siemens and Indian automakers. Japanese motorcycle and car makers, as well as local startups, will be among its potential customers. Exports are a possibility in the future.
Mitsui hopes to manufacture motors for electric motorcycles with an output of 3kW to 35kW. The company will try to grab a slice of the market for high-end 20kW to 30kW motors, which are equivalent to 125 cc gasoline engines in terms of power output.
The trading company will also aim to supply 115kW to 315kW motors for India’s electric bus market. Buses are well suited to electrification, it says, as buses typically travel shorter distances than cars.
To curb air pollution and rising crude oil imports, the Indian government plans to spend about $1.4 billion between 2019 and 2021 to promote electric vehicles, about 50 times more than its previous budget. It will offer subsidies worth 10% to 20% of the purchase cost of EVs, depending on the model. The government is expected to offer financial incentives for 1 million electrically powered motorcycles, 500,000 three-wheeled vehicles, 55,000 four-wheeled vehicles and 7,000 buses.
While major automakers typically make their own EV motors, most new carmakers in emerging economies buy motors from outside suppliers. As automakers speed up development of EVs, Mitsui expects more procurement of EV components from outside suppliers over the next five to 10 years.
The global market for electric motors for powertrains is expected to reach $19 billion in 2030, about 16 times more than in 2015. For this growth to happen, a more developed charging infrastructure is needed. But motorcycles, unlike larger vehicles, can be charged from household outlets, reducing the need for charging stations.
Meanwhile, the spread of quick chargers will likely determine how rapidly four-wheeled EVs catch on.