EkaLore regularly posts about the unique opportunities for a Dynamic India in the global marketplace. Today’s post concerns progress in the EV market.
The Government of India has made its preferences for “Make in India” known with highly visible initiatives. Smartphones, tablets, and all manner of devices are discussed with value-adds from production work increasing in India. A long-time goal has been the creation of a sustainable domestic vehicle manufacturing capacity and eventual capability to export to other countries. These goals are seen to be seeing progress with domestic contract manufacturing for electronics using enterprises like Wistron, Pegatron, and Foxconn.
In the next stage of this progression, existing participants in the Indian market are growing their manufacturing capabilities, capacity, and, extremely importantly, their supply chains. Skoda Auto Volkswagen India Private Ltd. sold 101,270 units in 2022 and exported 33,397 units. Skoda Group exports to 44 markets globally. 25% of Indian supply chain participants export to supply Skoda operations.
In 2024 Skoda Group intends to use its Indian operations to advance into the Vietnam market. Skoda Group intends to start work towards a new factory capacity in Thailand in 2024. For the Vietnam market, Skoda prefers exporting the Kushaq and Slavia models.
Foreign automakers move to participate in the Indian market using historical patterns. BYD (China) first began with an electric battery plant near Chennai. BYD (China) is now operating a vehicle assembly plant in Chennai. The plant receives “knock-down” kits for EV cars and assembles them for the local domestic Indian market. Three other Chinese vehicle manufacturers are bringing these operations to India. Great Wall Motor and a joint venture between FAW/Mazda began assembling vehicles in 2020. SAIC brought its legacy nameplate MG to the Indian marketplace in 2019. Toyota is looking for higher volumes in India to advance an operation to build from kit (in different sophistications).
Imports of road-ready vehicles see import duties and fees of 28-43% assigned per vehicle upon entry (depending on size). This is the strong government incentive for enterprises to bring their products (especially Electric Vehicles (EVs)) to market while urging them to build deeper operating experience in India.
Tata Motors, selling over 80% of all EVs sold in India, is preparing ambitious growth plans to fight to keep its preferred marketplace position. Competitive steps to achieve efficient operations at volume are still being developed. As the maturity of the Indian market begins to weigh on new EV entrants, the experience of long time market participants will be difficult to beat.
If you’d like to read more observations about the opportunities and challenges for “Dynamic India” you can find many more articles here at www.ekalore.com/india-business
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