Localisation vital as Indian OEMs drive into electric avenue

Localisation and a sustainable EV push came across as the dominant theme at SIAM’s 61st Annual Convention, which was held virtually.

Kenichi Ayukawa, president, SIAM and MD & CEO, Maruti Suzuki India said the key enablers to bring about a growth revival involves a “move further towards Atmanirbhar Bharat. SIAM and ACMA are working to further add 15-20 percent localisation. We are also looking at long-term regulatory roadmap – prepared by SIAM – for all aspects of future investments.”

Future investments no doubt involve a significant attention to rapidly evolving EV space. Given the fact that global sales are expected to approach five-and-a-half million units this calendar year, “India’s mobility scenario will see a paradigm shift to – connected, shared and electric on the back of increase in population. There are prominent growth drivers such as investment in R&D in electric vehicles, motors & control, charging infrastructure. Indians are cost conscious, battery swapping and leasing will reduce upfront cost. We can add 80 percent of value addition in batteries, despite no raw materials. Except for raw materials all technologies are available here,” added Amitabh Kant, CEO, NITI Aayog while speaking at the SIAM session titled ‘Enablers for Sustainable Growth of Auto Industry in India’.

According to him, the industry should focus on small mobility – two-wheelers and three-wheelers, “Vehicles with smaller battery packs are the key to switching to electric mobility. If we do not innovate, we will lose the opportunity to become a leader in EV manufacturing.” Incidentally, the two-wheeler segment is witnessing bounce back in entry level scooters and till date around 570,000 EVs have been registered on VAHAN portal.

He emphasised that the OEMs should focus on benefiting from the restructuring of FAME II scheme has laid emphasis on balamcing cost and range concerns, “Small EVs can reach parity with ICE-vehicles as the TCO is attainable, with battery swapping the range anxiety and initial cost of purchase can be taken care of.”

Highlighting the need for a comprehensive ecosystem to aid faster EV adoption, Dr Mahendra Nath Pandey, Union Minister of Heavy Industries, who was part of the same panel added that the, “government in addition to promoting EVs is now focusing on EV charging infrastructure. We are focusing on making India a leading exporter of good quality products, unlike some countries which believe in dumping poor quality products.”

Vipin Sondhi, VP, SIAM and MD & CEO, Ashok Leyland reiterated the need to be flexible and adaptive, “It is our responsibility to adapt and lead changes. SIAM is committed to working with government for the next 25 years to leverage world-class infrastructure, bring in new technologies and products.”

Holistic growth is also a function of effective partnership and collaboration. According to TV Narendran, president, CII and CEO & MD, Tata Steel while the two waves of pandemic hit the economy hard, “CII’s simulation shows we can reach 9 percent growth and reach the $5 trillion mark by 2025 if we follow a proper roadmap.” He outlined 6 points that the industry needs to think about including electrification, urbanisation, de-risking supply chain, rethinking functionality and sustainability in mobility, “There is a lot of opportunities as the world evolves. We will continue to focus on ease of doing business, competitiveness, create technology and sustainability.”

The industry captains debated on how the low vehicle penetration per capita in India could actually work to its advantage in the move towards electric mobility. The focus on exports as a way to counter domestic slowdown, even in the context of electric vehicles was seen as another key catalyst to improve foreign exchange as well as profits for exporters.