This may happen quicker than we anticipate. Remember mobile phone explosion.
Agree. If there is consumer pull then it will happen quickly. Once EV is more economical compared to ICE, there will be consumer pull and it will be tipping point. Producers will be forced to manufacture EV or else they will left out. Right now, we are witnessing the EV revolution in front of our eye.
While in general this is true, however would like to point out an important difference with respect to mobile revolution. There was no real substitute for mobile connectivity and there was a significant personal and financial benefit associated with it.
For EV’s to become an explosive success, costs will have to fall down substantially along with charging infrastructure.
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The cost of batteries is not going to fall so rapidly even with huge run size. If 10% EV market share happens in 3 to 5 years, that will be impressive . Remember that the biggest sales happen at 4 to 8 lakh category. This price bracket of 4 to 8 lakhs needs really cheap battery for decent range of 250 km. Government is not willing to provide deep subsidy. So we may have to wait some more time to see real EVs in the 5 lakh price point.
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Important notes from article:
- EV push will be negative for auto component makers especially ICE engine makers.
- ICE has 2000 moving parts while EV has 20 moving parts. This means EV results into lesser breakdowns.
- Demand will dry up for engines, transmission, aluminum castings, and cylinder blocks and cast iron.
- The component industry generate 20x employment comparted to OEMs.
- Almost 50% of revenue of auto component industry comes from engines and powertrain manufactures.
- EV has almost 60% fewer parts compared to ICE.
- The auto industry in general runs on a long term investment cycles.
- “The movement towards electric vehicles will be gradual and the government has not yet set any time line for that. So, automotive component manufacturers should not be apprehensive. Each one of them should talk to their big customers and decide their future,” Bhargava (Chairman of Maruti Suzuki India).
- “Suppliers are not interested in making any investment for diesel engines since the perception around the diesel as a fuel is so negative. Now hybrid vehicles also are not drawing enough volumes so some investment on that is already lost. Going forward, suppliers in the same domain may start sharing manufacturing capacities” - Puneet Gupta (associate director from IHS Markit)
- “I think it will take another 20-25 years for electric vehicles to flourish in India. During any disruption, the industry has to face some inconvenience but that should not stop them from making investments. We have a capex of Rs70-100 crore for the year, and we will use it during the course of the year.” - Arvind Kapur (MD and CEO of Rico Auto).
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Electric Vehicle – ISRO and BHEL JV for Lithium Ion batteries
‘We Are Ready To Transfer Space-Grade Tech To Industry’
India’s push towards completing the transition to electric vehicles by 2030 hinges on building an ecosystem that can supply lithium-ion (li-ion) batteries. Currently, battery packs are assembled locally, though the cells are imported. To change that, the government’s focus has shifted to R&D at ISRO’s Vikram Sarabhai Space Centre (VSSC), which built cells for use in its space systems. The centre’s director Dr K. Sivan tells Ajay Sukumaran that the process of transferring the technology to industry for use in electric vehicles is on.
Edited excerpts:
Can you take us through ISRO’s li-ion R&D?
We developed this technology for our space systems. The special advantages of li-ion batteries is in the cycle of operations—large dur¬ation, high energy density and lower mass, all of which are very suitable for our applications. For space systems, we need the batteries to be robust and non-degradable, and the costs are very high. We also wanted to do it for ourselves, instead of having to always depend on others. We are talking about the cell, which is available as a product, but not the chemistry. The chemistry is where the main R&D is. There are some limitations—for example, the raw material, lithium cobalt, is not available in India. We dev¬eloped the chemistry and we could get a very good cell, which we converted into a battery. We flew them initially on our small systems such as sounding rockets. Once we got good results, we went through the rigorous qualification process needed for the space environment. We have also flown it in our Re-usable Launch Vehicle (in 2016) and then we started using it in a satellite. GSAT 19, a high throughput satellite, makes use of this indigenous battery.
How did the industry outreach happen?
ARAI (Automotive Research Association of ¬India) asked if this battery can be utilised for automobiles. On testing it, it was found suitable for automotive systems as well. We supplied the cells and they made the battery packs for two-wheelers. The cells we use are produced in our pilot plant. For commercial applications, however, the cost needs to be reduced. We have assessed that it is possible. In fact, even for space systems, we could reduce costs in some areas without affecting quality. We think we can easily reduce the cost of the battery to less than $140-150 kW/h. Meanwhile, (Union transport minister) Nitin Gadkari took the initiative and many industries also visited us. Now government-level discussions are on about whether we can make it in a big way. They are interested in this technology for producing cells in industry. We are ready to transfer the technology and the process is on.
What is the tie-up with BHEL for?
We are planning to have a memorandum of understanding (MoU) with BHEL to generate space-grade batteries. We need these in huge numbers for our satellite and launch-vehicle requirements, but cannot produce that much in our pilot plant. We need a bigger facility. Though we can support BHEL if they want to use it for commercial purposes, the present MoU is only for space-grade cells.
What about technology transfer for use in automobiles?
VSSC is talking only about cells. Making a battery needs its own technologies and ARAI would probably have a major role to play in that. We are making batteries for our purposes, which may not be sufficient for automobile technology because the operating environment is different.
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When has a PSU produced mass consumer product with quality and price in mind?
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There are other who are also looking to produce. The point i am driving is that if VSSC has developed and is willing to transfer the technology of Li-ion battery, the domestic players will be able to roll out EVs sooner than expected.
Article illustrates the current scenario of EV options that are available in India and challenges going ahead
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The running cost is not low right now. Battery is a perishable and depreciable commodity and has to be replaced. So one must look at the total cost of ownership. However battery cost will reduce once we see someone mass produce.
If EV takes several years to get kick started, one may have to look at the discounted segments like oil marketing companies. They are at a low multiples today. Auto stocks like GM and Ford were selling at Rock bottom prices several months ago.
Hi,
Tata Motors Nano coming as EV.(to be named Neo)
Now EVs are going to be serious.
Tesla not only brushed aside India but also went with China plans aggressively
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Interesting analysis on EV & ICE in India and globally. Electric Vehicles - Sector Update - Nov 17.pdf (1.6 MB)
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Hi All, I think, there will be significant increase in usage of plastics also in the Electric Vehicles. I have posted my detailed thoughts regarding this on the BEPL ValuePickr forum (link provided below). Request your opinions on this:
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Batteries constitute 50% of cost of Electric vehicle. That’s a huge opportunity. While some automakers are setting up their own battery manufacturing plants, I think many companies will outsource batteries. So there will be significant opportunity for companies like Exide/Amararaja if they make right partnerships/technical colloboration. They may not emerge as leaders in lithium ion batteries. But even a 10% market share in EV batteries will create significant wealth for these companies considering the large opportunity size.
Disc:
Invested in Exide, planning to invest in Amararaja if they get into lithium ion batteries.
Detailed Report!
The report predicts - demand for steel is going to get lower with EV era in next decade. Subsequently, the companies for which steel remains to be a key raw material are likely to benefit. Does anyone have chart/analysis/list of the companies for which steel constitutes major component of cost?
Amararaja Batteries :The boom in the wind and solar segments and introduction of electric vehicles will boost growth.
I have a different view… Currently Maruti has a 50% market share in
cars… And they buy batteries from exide and amararaja… When they start
making Li batteries themselves, is it good for exide and Amara Raja… It
will actually reduce their sales… We need to remember EVs are not going to
add demand… They will eat into ICE demand… IMV - it is going to be a big
negative…