Electric vehicles bring a ray of hope to the future of mobility. However, we aren’t mindful of the fact that the EV automakers have to deal with a lot of issues ranging from gathering raw materials to battery manufacturing.
The supply side is also at an advantage because they have to import the major components and this leads to a rise in the cost of the vehicle which in turn discourages the consumers and they tend to shift their preference towards the ICE (Internal combustion engine) vehicles.
But how are the EV companies fighting the shift?
They are currently pursuing a dual strategy centered on both the present and the future, just like their customers. They are concentrated on profitable internal combustion product lines while also creating things to entice the automakers who are vying for consumer favor with tech-forward, enticing EVs.
What critical problems do EV auto-part manufacturers deal with?
- Lack of Rare earth metals: NiMH (Nickel Metal Hydride) batteries, whose negative electrode (anode) was built of a lanthanum-Penta nickel alloy, were installed in the Toyota Prius and the Honda (LaNi5). About 10 kilos of rare earth lanthanum were used in these batteries in the initial generation of hybrid cars. Today, however, lithium-ion (Li-ion) batteries with significantly superior performance have supplanted this battery technology. The majority of hybrid and electric vehicles today are powered by Li-ion batteries, which do not contain rare earth, despite the fact that some Toyota hybrids sold in Europe still have NiMH batteries.
- Lack of electrical grade metals: According to the assumption that a 3kW motor contains 3 kg of copper and 5 kg of aluminum, 25,000 tonnes of copper and 50,000 tonnes of aluminum would need to be imported by India in addition to their 2021 imports for a 50% transformation in the country’s 2 wheeler industry. In 2021, India imported aluminum and copper worth a combined $3.5 billion (Source).
- Deficit Balance: Since India doesn’t have a lot of raw materials required to make auto parts for electric vehicles, therefore, it exports most of them from China. As China is the leading industry in EV components.
- Lack of proper planning: To produce 20 million motors annually, a reliable manufacturing supply chain would need to be established. There would be a significant need for machined components, steel castings, and aluminum. Given that most machines would need to be imported, CAPEX of hundreds of millions of dollars would be required.
get the list of top EV Components Manufacturers in India here.
What is the future?
Recycling will be extremely important in creating a closed-loop EV economy. Similar to the ICE era, little to no attention has been paid to it. In addition to batteries, it will be necessary to establish an industry for the reclamation of used motors and powertrain components.
For instance, in Japan, reselling such parts is a key source of profit for recyclers of used automobiles. However, vendors, especially those who produce parts primarily for internal combustion cars, are not concerned about the change. One significant factor is that, despite spending their own billions on the changeover, automakers are delaying the discontinuation of their mainstay gas-powered models.