Form of words:
New Delhi: India is urging local carmakers to curb imports of electric-vehicle components and other automotive parts from China as Asia’s third-largest economy looks to reshape its supply chains.
“It is important that some automotive components, which are being imported from China purely on the basis of cost competitiveness and development capabilities, are manufactured here,” said Amitabh Kant, chief executive officer of the government policymaking body. NITI Aayog. “We should not become a major importer nation in electric-vehicle components like we have done in solar.”
India is trying to diversify its supply chains away from neighboring China after the deadly Struggle Last year, the disputed Himalayan border between the world’s two most populous countries. The COVID-19 pandemic and global trade tensions with China have intensified the need for countries around the world to move manufacturing bases out of the country to mitigate supply-chain risks.
Kant said India is dependent on China for magnets used in motors, semiconductor-based components and other electrical parts of electric vehicles. “It should not only be minimized but also eliminated”, he said at an event organized by Automotive Component Manufacturers Association of India on Thursday.
“You have to risk the supply chain by promoting localisation, reducing dependence on imports and I would say imports from China,” Kant said.
With the transition to EVs now inevitable, Kant said, “Indian manufacturers should clearly read the writing on the wall and aim to secure a strategic position in the global value chain.”
While the Indian government is pushing local automakers to move to EVs, the shift is happening far more slowly than in other countries, with battery models accounting for only 1% of the country’s annual car sales. Most of the Indian older automakers are hesitant to switch due to lesser charging infrastructure and higher cost of electric models.
Maruti Suzuki India Limited, the country’s largest carmaker in terms of deliveries, does not manufacture any electric vehicles due to its cost.
“Electrification can happen on a large scale in India only when the customer finds that it is in his interest to buy an electric vehicle instead of an internal combustion engine,” said chairman RC Bhargava at the same event. “Given the state of the infrastructure in various regions, this process will take some time and the internal combustion engine vehicle will be in production for many, many years.”
Mahindra & Mahindra Ltd., meanwhile, sells only one electric passenger car model, the e-Verito, which is made to order for bulk delivery to organizations and individual customers. Tata Motors Limited is currently leading the nascent segment with its best seller Nexon.
“If the established players don’t move to electric vehicles, you will see startups disrupting all of you and they will capture a very large part of the market,” Kant said. bloomberg
Read also: Who’s making those EV batteries that are catching fire?
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