Topics Electronic vehicles | automobile industry | economy

Shally Seth Mohile  |  New Delhi  Last Updated at September 14, 2022 23:19 IST

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The transition to electric vehicles (EVs) could dent the bill of materials (BoM) of component makers of internal combustion engine (ICE) by up to 50 per cent. This is according to the early estimates highlighted in a joint report by Auto Component Manufacturers Association (ACMA) and McKinsey released on Wednesday.

BoM is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product.

While there is cause for optimism, the push for clean mobility and corresponding growth in the adoption of electric vehicles (EVs) could disrupt the automotive landscape over the course of this decade, said the report. Europe and China are expected to be front runners in this shift, with the rest of the world following suit eventually.

The reduction in BoM for ICE is the least of suppliers’ worry — not even for those that were earlier highly dependent on the engine and engine related parts, as most of them have diversified into parts for EVs over the last couple of years. Bengaluru-based, Sansera Engineering for instance, which was only into machining and precision parts needed for the engines, has diversified its basket of components. “Today with the transition to EVs, we can do many more parts related to the body of the vehicle. For instance, as against 1,400 parts in an ICE, we can supply 2,800 parts for an EV,” said F R Singhvi, joint managing director, Sansera Engineering.

Nirmal K Minda, chairman, Una Minda Group echoed similar views. “We were anyway not too much into engine-related parts. Now with the electric mobility trend, our content per vehicle has only gone up.”

In India’s case, the total cost of ownership is likely to be more attractive for e-two- and three-wheelers than for passenger or heavy commercial vehicles (PV and HCV). Sales of new electric two-wheelers and e-three wheelers could grow to 50 per cent and 70 per cent, respectively, by 2030.

According to the study, ICE will continue to dominate the Indian PV and HCV landscape, with slower electrification. E-PVs and HCVs are expected to account for 10 to 15 per cent and 5 to 10 per cent of new vehicle sales, respectively, by 2030.

The study also highlighted that the market for conventional vehicles was not disappearing any time soon. Continuous improvement and expansion in traditional ICE play within India is a 35 to 45 billion dollar opportunity by 2030.

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