World Begins to Adopt Electric Vehicles at a Faster Rate
The developed countries of the World are fast adopting electric vehicles due to their obvious advantages. An electric vehicle has many advantages over vehicles utilizing an internal combustion engine (ICE). An electric vehicle is very clean. There are no gaseous emissions. The propulsion system in an ICE vehicle has thousands of moving parts. An electric vehicle’s propulsion system has very less number of moving parts, mainly the electric motor. In addition to reducing maintenance costs and saving on lubricants and oils, the reduction in friction losses contributes to the energy efficiency of electric vehicles.
Norway is the leader in the use of electric cars in Europe and wants to move to electric-only vehicles by 2025 along with the Netherlands. Both Germany and India have proposed similar measures with a target of 2030. France has vowed to stop the sale and use of ICE by the year 2040.
Disruption of Auto Ancillaries
The adoption of the electric vehicle system in a car which uses a battery to power the wheels is expected to bring disruption to the Auto Ancillaries all over the World. As the battery would replace the Internal Combustion Engine auto ancillaries manufacturing engine components would face strong headwinds in terms of demand for their products. The transmission system which allows power from the engine to be transmitted to the wheels would also face similar consequences as it would not be required for battery powered vehicles. A transmission in a standard vehicle is used to give the vehicle a certain torque or power at certain speeds by changing the gear input/output ratio within the transmission. The change in gear ratio is governed by the speed(RPM) that the vehicle’s engine is turning at. The components used in an electric vehicle are very different from a standard vehicle. In an electric vehicle transmission is not necessary.
EV’s utilize an electric motor to turn the wheels of the vehicles. There are several different drive system designs in use today. These include vehicles with a single large electric motor coupled to the rear wheels through a differential housing. Other designs utilize two smaller motors to power each wheel separately through independent drive shafts.
The most efficient design to date utilizes motors which are attached directly to the wheel. These are referred to as “wheel motors”. By eliminating driveshafts and differentials, mechanical losses between the motor and wheels are kept at a minimum. The power system of an electric vehicle includes both the drive system and control system. The controller delivers power to the motor from the batteries. The motor in turn delivers power to move the vehicle to the drive wheels through a gearbox.
Electric Vehicles do not have components such as belts, air filters (other than AC ),spark plugs, coils, balance shafts, harmonic balancers, pistons, rings, camshafts, valves, lifters, valve springs, fuel pumps, injectors, pressure regulators, idle mixture regulators, throttle bodies, catalytic converters, mufflers, gudgeon pins, conrods, big & little end bearings, timing belts or chains, distributors, rotors, ignition leads, fuel filters, alternator, tensioners, clutch or torque converter, multi-speed transmissions – which contains lot of moving/wearing components.
Engine parts accounts for 31% of the entire product range of the auto components sector followed by drive transmission & steering parts at 19%, Body and Chassis at 12%, Suspension and Braking Parts at 12%, Equipments at 10%, Electrical Parts at 9% and other parts at 7%. As large as 50% of the auto components account for the engine and transmission systems which would be largely disrupted as they would cease to exist once electric vehicles increase in numbers or when sales of ICE vehicles start to decline.
Are Auto Ancillaries Well Diversified?
Auto Ancillaries in India vary in terms of diversification of their products. Some players in the industry manufacture specific components while others are diversified to such an extent that they manufacture many products that are sold in the domestic and export markets. As the developed countries are adopting electric vehicles at a rate faster than the emerging countries, auto ancillaries supplying components specific to engine and transmission systems would be disrupted to a large extent as demand for their conventional products would cease to exist after demand starts to wane away. Those ancillaries supplying products to domestic after market and OEMs in India would see a decline in demand once adoption of electric vehicles gathers pace.
Cost Comparison Electric and ICE Vehicles
Electric vehicles are very energy efficient. For every 100 units of fuel that are expended in an ICE vehicle, only 16 actually result in propulsion. An electric vehicle, however, will use almost 85 units out of 100 for driving the vehicle. This gives an idea about the running cost of electric vehicles as compared to ICE counterparts.
Electric vehicles have another significant advantage over ICE vehicles which is regenerative braking. When an electric vehicle is slowing down (during braking), the motor becomes a generator and provides energy to the batteries. An additional benefit of this process is the braking effect of the motor on the vehicle, thereby reducing brake wear.
Policy For India
The National Electric Mobility Mission Plan 2020 is one of the most important and ambitious initiatives undertaken by the Government of India that has the potential to bring about a transformational paradigm shift in the automotive and transportation industry in the country. This is a culmination of a comprehensive collaborative planning for promotion of hybrid and electric mobility in India through a combination of policies aimed at gradually ensuring a vehicle population of about 6-7 million electric/hybrid vehicles in India by the year 2020 along with a certain level of indigenisation of technology ensuring India’s global leadership in some vehicle segments.
FAME India – Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India – is a part of the National Electric Mobility Mission Plan.
The Road Ahead
India is the global hub for manufacturing of automobile components and faster adoption of electric vehicles by the developed countries would disrupt ancillaries supplying engine and transmission parts as many of them depend on export orders for the purpose of revenue generation.
It would take time for the Indian economy to shift to the usage of electric vehicles as cost competitiveness is a big factor considering the per capita income. Once electric cars become at par with their gasoline counterparts the shift would be rapid. There are a lot of policy initiatives the Government needs to take for faster adoption of electric vehicles and there is still a long way to go in making things happen on this front.