EV Deadlines May Disrupt Industry: Auto Component Manufacturers

The Automotive Component Manufacturers Association of India (ACMA), has joined the growing number of voices from the automobile industry, warning of disruptions to the auto industry if a proposal to ban internal combustion engines in two-wheelers and three-wheelers. The government has proposed a complete replacement of three-wheelers with internal combustion engines by 2023, and to replace all two-wheelers below 150 cc by electric vehicles from 2025. The government proposal comes at a time when the Indian auto industry is already going through a transition phase by leapfrogging from Bharat Stage IV emission regulations to Bharat Stage VI norms which will come into effect from April 1, 2020.

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"The auto component industry in India is facing one of the severest challenges at this juncture, while on one hand it is faced with the daunting task of meeting the stringent deadlines of transitioning from BSIV to BSVI and a host of safety norms, on the other, poor vehicle sales for close to a year now has the industry worried. It is to be noted that India is the only country in the world to have by-passed a generation of technology as its commitment to produce vehicles with better emissions," said Ram Venkataramani, President, ACMA.

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A transformation to complete electric two-wheelers will also need infrastructure and supply chain

ACMA says the auto component manufacturing industry is support the government's intent of ushering in electric mobility to address the dual challenges of rising pollution and also the need to reduce dependency on fossil fuels. The industry body says that it appreciates the thrust given to localisation in the Phased Manufacturing Program (PMP) announced simultaneously with the FAME II (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) scheme. However, the apex body also cautions against undue haste, which may end up adversely affecting the industry as a whole, which will also affect more than 30 lakh personnel employed in the auto component industry.

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"The auto component industry in India is a shining example of 'Make in India'; the industry with over USD 55 billion in turnover, exports a-third of its production to the developed countries, with engine and transmission-drive accounting for its bulk. The industry, dominated by small and medium enterprises, creates employment for more than 30 lakh personnel. Whilst the auto component industry whole-heartedly supports the Government of India's intent of ushering in e-mobility and has already started to prepare for it, a hundred percent transition in the next few years would translate into decimating the existing vibrant eco-system of this unique industry. Undue haste, without giving adequate consideration for localisation, could lead to rising imports; a phenomenon already, rapidly gaining ground with increasing electronic content in vehicles. Therefore, a pragmatic approach for the government would be to create a stable, long term road-map in consultation with the industry to ensure a smooth evolution rather than a disruption", added Ram.

The government's think-tank, Niti Aayog, has rolled out a draft policy to completely replace two-wheelers and three-wheelers with electric vehicles by 2025 and 2023. Industry observers and manufacturers are of the view that such a tight deadline will put the industry under pressure, already reeling from slow growth and the transition to BS-VI regulations. Most manufacturers have urged the government to roll out a well-planned and practical roadmap for electric vehicles, instead of slapping a deadline which may be difficult to meet.