Govt tells auto sector to cut China imports
The government has told the automotive industry to reduce its dependence on China imports for electric vehicle (EV) components and build locally as the country seeks to reshape its supply chains and looks to play a strategic role in the global value chain.
NITI Aayog CEO Amitabh Kant nudged the established automakers to move forward with their EV plans, warning that if they don’t, the incumbents will cede ground to startups as the smaller firms are growing exponentially.
“The domestic manufacturers must realise that we are in the midst of a biggest transition. EVS will become inevitable whether you like it or not,” he said during a virtual address to auto industry leaders at the 61st annual conference of Auto Component Manufacturers Association (ACMA).
According to Kant, it is imperative for the country to “indigenise the manufacturing of EVS and its parts and promote mass adoption”.
He cautioned that the EV industry should not adopt the route followed by the solar power sector. “Don’t want to be a major importer like we are in solar,” he said.
His comments on start-ups come amid a flurry of e-scooter launches by them, including Ola Electric. A persistent increase in petrol prices and a policy push by the Centre and states has helped manufacturers of e-scooters launch them at a price which is only marginally higher to comparable internal combustion engine (ICE) powered models.
In contrast, car buyers will have to wait till price parity between ICE cars and e-cars is arrived at. “Electrification can happen on a large scale in India only when the customers find EVS a lot more attractive than ICE. It cannot be adopted very fast, given the state of infrastructure,” said R C Bhargava, chairman of car market leader Maruti Suzuki India.
Kant believes India’s low car penetration — 21 per 1000, as against United States’ 960 per 1000 — will make the transition from ICE to EVS smoother as the country will not have any “legacy issues”.
As a signatory to the Paris Agreement on Climate Change, India is committed to reduce carbon emission by 25 per cent by 2030. EVS are one way India can achieve this target.
Kenichi Ayukawa, President of Society of Indian Automobile Manufacturers (Siam) and MD & CEO of Maruti Suzuki India, said that both Acma and Siam have “jointly developed a localisation road map for the auto industry. This road map details key components across segments and the corresponding opportunity for localisation.”
THE EV WILL BECOME INEVITABLE WHETHER YOU LIKE IT OR NOT
AMITABH KANT, CEO, NITIAYOG