India's journey toward mass electric vehicle (EV) adoption faces challenges despite its automotive and technology sector prominence. 

Committed to electrification goals,

India, an emerging EV powerhouse, is committed to electrifying 70% of commercial cars, 30% of private cars, 40% of buses, and 80% of two-wheelers and three-wheelers sales by 2030

Projecting a compound annual growth rate of 49% between 2022 and 2030. Despite the $100 billion market value and sales target of 10 million units, obstacles like ownership costs persist. Challenges include limited charging infrastructure, battery cell deficits (20-25%), and semiconductor chip shortfalls (40%-50%), impacting production and increasing ownership expenses.

To address these issues, industry players, such as 

Hero and Ather Energy, have developed India's first combined AC and DC charging solution for light electric vehicles, enhancing organisational interoperability. 

With growth projections, original equipment manufacturers (OEMs) must align component supply with demand, invest in proprietary solutions, and leverage local manufacturing for operational efficiency.

This article, derived from extensive research and consultations, provides insights and solutions to overcome challenges, paving the way for a successful transition to an electrified future.

Major Challenges to Drive Adoption 

There are a number of challenges that need to be addressed in order to drive EV adoption in India. These include:

Import Dependency

Despite local EV manufacturing growth, resource constraints hinder scaling up, leading to continued import reliance for key components. This leaves the supply chain vulnerable to disruptions and increased costs during geopolitical uncertainties.

Scalability Issues of Local Manufacturing Capacity

Limited local EV component manufacturers result in higher costs, with small enterprises struggling to meet growing demand. The transition to larger enterprises is crucial for a self-sufficient manufacturing ecosystem.

Fragmented Supply Chain

Fragmentation among small and medium-sized enterprises causes coordination challenges, leading to potential delays and increased costs. Streamlining processes is essential for an efficient EV supply chain.

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Challenges in end-to-end visibility and poor quality from multiple suppliers harm operational efficiency and trust, for which supplier consolidation is essential for streamlined processes and higher quality standards.

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Lack of Standardization

The absence of standards complicates component sourcing, raising costs. For example, the lack of battery specifications standardisation makes interchanging batteries challenging for manufacturers.

Benefits of Localising the EV Supply Chain in India:

By optimizing the supply chain and ensuring a steady flow of components, manufacturers can reduce costs, improve efficiency, and increase the overall adoption of EVs.

Cost Reduction

Localizing the supply chain reduces reliance on imports, significantly cutting costs. This, in turn, makes electric vehicles more affordable for consumers. Additionally, local sourcing helps reduce logistical costs, tariffs, and the risk of exchange rate fluctuations, further enhancing the competitiveness of domestically produced EVs.

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Enhanced Resilience

Local sourcing minimises exposure to global disruptions, ensuring a stable production process against geopolitical tensions and trade conflicts. Better communication and coordination between suppliers and manufacturers improve efficiency and quality control.

Job Creation and Economic Growth

Localising the EV supply chain generates jobs and stimulates economic growth, contributing to India's prosperity. This growth attracts foreign investments, enhancing global competitiveness and technological capabilities.

Domestic EV Ecosystem Development

A localised supply chain fosters a robust domestic EV ecosystem, stimulating innovation and technology development. Collaboration enhances knowledge sharing, accelerates research efforts, and drives the industry toward global excellence.

Major EV Components -Current Status and Future Outlook

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Government Initiatives to Promote Localization:

FAME Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles):

Objective: Launched in 2015, initially focused on hybrid and electric vehicle adoption.

Financial Commitment: ₹10,000 crores ($1.3 billion) for FAME II, spanning three years, emphasizing EV adoption, infrastructure development, and market incentives.

Incentives and Subsidies: FAME II provided subsidies for electric two-wheelers, three-wheelers, and buses, particularly emphasizing public transportation.

Charging Infrastructure: A significant portion of FAME II's budget was allocated for charging infrastructure development.

PLI Scheme (Production Linked Incentive):

Objective: Designed to enhance local manufacturing and assembly of critical EV components, creating a self-reliant ecosystem by incentivizing large-scale production.

Allocation and Incentives: ₹18,100 crores ($2.4 billion) committed to incentivize advanced chemistry cells (ACC) battery production, reducing import reliance.

Performance-Based Incentives: Companies eligible for incentives based on incremental sales volume and capital investment, encouraging local manufacturing and boosting EV production.

Government Support for EV Advancements

Governments strategically invest in EV research and development, fostering innovation in battery technologies, energy storage, motor efficiency, charging infrastructure, vehicle design, and energy-efficient materials. This support extends to creating a conducive environment for industry growth through policies, financial incentives, and infrastructure development, including charging stations, electrical grid enhancement, and smart city planning to alleviate range anxiety and address charging infrastructure concerns.

Procurabl's Role in Supply Chain Scalability for EV Adoption in India

Procurabl plays a vital role in driving EV supply chain scalability in India. With comprehensive capabilities, we facilitate the localization of manufacturing components, easing OEMs' burden under the Production-Linked Incentive (PLI) scheme. Our trusted supplier network consolidates suppliers, streamlining operations for cost-efficiency. Procurabl's end-to-end visibility solutions enhance operational efficiency, ensuring guaranteed cost reduction.

In essence, Procurabl act as a catalyst for a self-reliant and sustainable EV ecosystem in India, committed to the success of the automotive industry's transformative journey.

Experience the transformative power of Procurabl's solutions at Automotive Solutions. Whether it's supply chain consolidation, end-to-end visibility, or cost-saving strategies, we've got you covered. Schedule a call with us to build a robust supply chain system