www.autocomponentsindia.com Vol 7 Issue 06
August 2020
COMPONENTS
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GREAVES COTTON GROWTH LEVERS
INDIA
VOICE OF THE AUTOMOTIVE SUPPLIERS
2030 Thematic Roadmap: Key Trends
MAHLE Low Voltage Drive System
EV go-to and wear parts l
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Battery Replacement Demand l Advanced Lead-acid Batteries l Riding High on Investor Confidence @ACImagazine
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Content August 2020
COMPONENTS
INDIA
Cover Story
13 Greaves Cotton Growth Levers
Greaves Cotton Limited continues to tap into new growth levers like affordable e-mobility and sustainable cleantech solutions.
AUTO COMPONENTS INDIA n AUGUST 2020
06 Newscast n
Import congestion hits supply chain
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Chinese investors barred?
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FICCI seeks FAME II extension
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India: EV manufacturing hub in five years?
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New Apollo Tyres greenfield facility
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MSSL Group reorganisation plan
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Talbros Automotive order pipeline
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Sun-Mobility sets up first Quick Interchange Station
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FEV and Premier Seals partner
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World Bank booster shot for MSME
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Magnetic Maharashtra 2.0: China MoU on hold
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EV demand impacted?
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Li-ion Battery: The mainstay of EVs?
11 Mobilised n
Mahle Low Voltage Drive System
22 Business Filing n n
Advanced Lead-acid Batteries Riding High on Investor Confidence
26 Special Reads n
India’s Clean Power Revolution
32 Trending n n
2030 Thematic Roadmap: Key Trends Automotive 3D Printing
40 #Trendsmap
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Battery Replacement Demand
The replacement of old and discharged batteries is expected to drive growth in the battery segment.
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Executive Editor Ashish Bhatia Editorial Advisory Board H. S. Billimoria, Aspi Bhathena Head - Design & Production Ravi Parmar Asst Art Director Ajit Manjrekar Production Supervisor Dinesh Bhajnik Publisher Marzban Jasoomani General Manager – North & East Ellora Dasgupta General Manager – South Girish Shet Deputy General Manager – North & East Chanchal Arora (Delhi) Regional Marketing Manager Salma Jabbar (Chennai) Marketing Manager Minocher Parakh (Mumbai) Manager Circulation - North and East Kapil Kaushik (Delhi) Subscription Supervisor Sachin Kelkar Tel +91 22 43525220 Apple Newsstand & Magzter Queries: help@magzter.com Territory Sales Incharge (Circulation) Srinivas Gangula (Hyderabad) Cell +91 09000555756 Territory Sales Incharge (Circulation) Vidyasagar Gupta (Kolkata) Mob: 09804085683 REGIONAL MARKETING OFFICES Next Gen Publishing Pvt. Ltd. 105-106, Trade World, B-Wing, 1st Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India, Mumbai -400013. Tel +91 22 43525252 26 B, First Floor, Okhla Industrial Estate, Okhla Phase III, New Delhi - 110020, India Tel +91 11 42346600/78, Fax +91 11 42346679 Unit No:509, 5th Floor, ‘B’ wing, Mittal Towers, MG Road, Bengaluru - 560001, India Tel +91 080 66110116/17, Fax +91 80 41472574 Cenetoph Elite, No.5, Cenetoph 1st street, Teynampet, Chennai - 600018, India Tel +91 044 421-08-421/044 421-75-421
It would be fair to presume that with resistance to bilateral trade at the cost of domestic manufacturers at an all-time high, we are driving the business conduct of a well-regulated open trade to an all-time low. Add to it, selective self-reliance is conflicting.
have found a similarity between my Raspberry Pi motherboard and the circuit of business. Visualising the components takes me back through the hours spent cracking the firstyear prerequisite subject of Basic Electrical Engineering (BEE). The role of every component thanks to my mentor had never been clearer. Let me hand hold you through the motherboard for old times’ sake. After all, the pandemic has compelled us all to pause and look back. As per the classic definition, electric current denotes the flow of electrons with respect to time. This flow is dependent on the force required to make it flow. The force here is the voltage and we all know that the element with the higher charge has the higher potential. The battery provides the voltage; the resistors control the electric current as it passes; the LEDs light up when the current flows through it; the transistor amplifies the charge; the capacitors harbour electrical charge; the inductor creates electricity through magnetic fields caused by running the current through a cable with a conductive coil wrapped around it; the diode allows current to pass in one direction only blocking the other and switch depending on whether its switched on or off allow the current to either flow or blocks it. Now if you were to think of the trade request, import or export, as the electric current, and design your own motherboard, you would be able to better optimise your component efficiencies to get the desired output. It would be fair to presume that with resistance to bilateral trade at the cost of domestic manufacturers at an all-time high, we are driving the business conduct of a well-regulated open trade to an all-time low. Add to it, selective self-reliance is conflicting. Ashish Bhatia Executive Editor | a.bhatia@nextgenpublishing.net
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Views and opinions expressed in the magazine are not necessarily those of Next Gen Publishing Pvt. Ltd. Next Gen Publishing Pvt. Ltd. does not take responsibility for returning unsolicited manuscripts, photographs or other material. All material published in Auto Components India is copyright and no part of the magazine may be reproduced in part or full without the express prior written permission of the publisher Printed by Marzban Jasoomani Next Gen Publishing Pvt. Ltd., 105-106, Trade World, B-Wing, 1st Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India.. Published by Marzban Jasoomani on behalf of Next Gen Publishing Pvt. Ltd., 105-106, Trade World, B-Wing, 1st Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India. Printed at Spring Graphics, 215 & 238, Shah & Nahar Industrial Estate, Sun Mill Compund, Lower Parel (West), Mumbai 400013, India. Published at Next Gen Publishing Pvt. Ltd., 105-106, Trade World, B-Wing, 1st Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India.
All readers are recommended to make their own independent enquiries before sending money, incurring expenses or entering into commitments in relation to any advertisement appearing in the publication. Auto Components India does not vouch for any claims made by advertisers for their products and services. The editor, publisher, printer and employees of the publication shall not be held liable for any consequence in the events of such claims not being honoured by the advertisers. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only. Editor Ashish Bhatia
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Just in Time
Business Circuit
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Newscast
Import congestion hits supply chain Even as automotive component manufacturers resumed operations, import bottlenecks are known to have hit the supply chain. Citing the complexity of the automotive value chain and the need for clearance permit of imports, with the backdrop of import congestion, Deepak Jain, President, Automotive Component Manufacturers
Association of India (ACMA) addressed the issue by drawing attention to inordinate delays in clearance of import consignments due from China. Alleging a 100 per cent manual inspection leading to delays, he said, “The Indian auto component industry is committed to the ‘Atmanirbhar vision’. Most of the items imported from China are critical
components including engine parts and electronics items for which India is yet to develop domestic competence.” “The automotive value chain is a highly complex, integrated and interdependent one; non-availability of even a single component can, in fact, lead to stoppage of the vehicle manufacturing lines,” he cautioned.
Chinese investors barred? FICCI seeks FAME II extension Amidst the evolving India and China trade dynamics, the Government of India has taken a firm stand on Chinese investors. Taking a bold step to bar their participation in the Micro, Small and Medium Enterprises (MSME), confirmed Nitin Gadkari, Union Minister for Road Transport and Highways, Shipping and MSME that Chinese companies would not be allowed to invest in MSME and or any joint ventures”. In line with the ‘Atmanirbhar Bharat’ vision, on existing tenders and future bids, rebidding would be done in case of existing Chinese joint ventures, he informed. The Department for Promotion of Industry and Internal Trade (DPIIT) on April 18, 2020 had issued a press note regarding a change in the FDI policy, impacting both direct and indirect Foreign Direct Investments from China.
AUTO COMPONENTS INDIA n AUGUST 2020
India: EV manufacturing hub in five years?
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Urging domestic players to take advantage of the opportunities generated amidst Covid-19 pandemic, Nitin Gadkari, Union Minister for Road Transport and Highways, expressed confidence over India emerging as an Electric Vehicle (EV) manufacturing hub in next five years. He reasoned that global businesses are looking for opportunities outside China. Assuring support to the EV sector, Gadkari mentioned that the government is trying to extend ‘best possible concessions’. The Goods and Services Tax (GST) on the EVs have been reduced to 12 per cent. Hopeful that the demand for alternate and cheap sources of power like electric and biofuels will rise due to the availability limitations of petroleum fuel, Gadkari drew attention to the pilot project approved for developing an electric highway on the upcoming Delhi-Mumbai Green Corridor. www.autocomponentsindia.com
In order to boost demand for Electric Vehicles (EV), FICCI has sought a two year or higher tenure (extension up to 2025) of the FAME II scheme. In the short term, ‘Booster Incentives’ under Fame II for 12 months within the existing budget allocation of Rs.10,000 crores have also been sought. To ensure continuity of the EV growth roadmap impacted by Covid-19, extension of subsidy support for electric two- and three-wheelers with swappable batteries have also been sought. Other demands include waiver of EV permits and extension of financial support of Rs.10 crores attributed to inhouse R&D setup. FICCI sought priority intervention from policymakers to enhance the demand for EVs in the short term and also to encourage continued investments in the sector.
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Newscast
New Apollo Tyres greenfield facility Apollo Tyres commissioned a new greenfield manufacturing facility at Chittoor, in Andhra Pradesh. Known to have earmarked an investment of Rs.3,800 crores for Phase I, the facility is spread over a 256 acre expanse and will employ 850 people. The plant will target a production capacity of 15,000 passenger car
tyres and 3,000 truck-bus radials by 2022. Marking the company’s seventh unit globally, the ultramodern facility is claimed to be highly automated and driven by IT systems and robotics. Featuring a modular layout, the new facility is expected to add to the leading tyre maker’s capacity amidst growing curbs on tyre imports from low-cost options.
MSSL Group reorganisation plan To simplify the group structure, Motherson Sumi Systems Ltd. (MSSL) recently approved a group reorganisation plan. The plan entails a demerger of the Domestic Wiring Harness (DWH) business from MSSL into a new company, in the process of being incorporated as a wholly-owned subsidiary of MSSL. Approved with an objective to help business grow across
product portfolios within the auto components space and allied operations, the move is being looked at as beneficial for shareholders too. Vivek Chaand Sehgal,
Chairman, MSSL said, “The simplification of group structure has been a long-standing request from our shareholders and the proposed
reorganisation is a step in that direction.” Signed off by the respective boards of MSSL and Samvardhana Motherson International (SAMIL), it also entails the merger of the latter into the former. Consolidating 100 per cent shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV), the transaction is likely to be completed by Q2FY22.
AUTO COMPONENTS INDIA n AUGUST 2020
Talbros Automotive order pipeline
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Talbros Automotive Components Ltd., has bagged orders worth Rs.234 crores. Due for completion by FY2026, these include orders received by the JV and subsidiary companies and from both global and domestic OEMs across segments. A major part of this order is known to have been received from an international OEM based in India and includes domestic as well as exports orders as per the company’s statement. Expecting to hugely benefit from these orders, the company is looking at enhancing its commitment to ‘Make in India’. “It clearly provides us long-term visibility and business momentum,” said Anuj Talwar, Joint Managing Director, Talbros Automotive Components Ltd. www.autocomponentsindia.com
companies are planning similar installations in
Amritsar, New Delhi, Gurugram and Bengaluru
FEV and Premier Seals partner
With the purpose of developing state of the art Noise, Vibration and Harshness (NVH) products like powertrain mounting, suspension isolators and rotating dynamic absorbers, Premier Seals India has partnered FEV India. Aimed at the joint development of new and allied products for the Indian automotive industry, the partnership will provide innovative and new solutions. Believed to have the potential to provide a technological thrust to the Premier Group and thus enabling it to compete with other global OEMs, the latter will look to leverage FEV Group’s global access to new technologies and in turn their expertise in vehicle and powertrain development. The focus will be on localisation and joint development in the domain of powertrain mounting, suspension isolators and rotating dynamic absorbers.
under the pilot project aimed at building 20 stations. Leveraging IOCL’s pan-India presence, Sun Mobility is looking at accelerating demand for electric vehicles by providing a more convenient way for refuelling EVs through the technology first showcased at Auto Expo 2018 in partnership with Ashok Leyland.
World Bank booster shot for MSME
In a move to immediately address the liquidity issues and credit needs of around 1.5 million MSME, the World Bank approved a USD 750 million fund to ease operations reeling under the Covid-19 crisis. Through the MSME Emergency Response program, it is supporting the increased flow of finance to the latter. Strengthening the overall financing ecosystem, the World Bank is also supporting NBFCs and small credit banks as effective financial intermediaries. Till date, the World Bank has committed an estimated USD 2.75 billion for supporting India’s emergency Covid-19 response. The World Bank is also looking at engaging with the ministry and the respective states to facilitate capacity development at the cluster level. www.autocomponentsindia.com
AUTO COMPONENTS INDIA n AUGUST 2020
Sun Mobility set up its first Quick Interchange Station (QIS) at the Indian Oil Corporation Limited (IOCL) pump in Chandigarh. It has installed battery swapping stations in line with the company’s strategy to contribute to the expansion of the nationwide energy infrastructure network. Together the two
Newscast
Sun-Mobility sets up first Quick Interchange Station
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Newscast
Magnetic Maharashtra 2.0: China MoU on hold The Maharashtra government has put on hold Memorandum of Understanding (MoU) valued at an estimated Rs.5,020 crore of three Chinese companies signed up under Magnetic Maharashtra 2.0. Including the MoU with Great Wall Motor, Hengli Engineering and PMI Electro Mobility Solutions, these arrangements were expected to generate
employment for 3,692 strong workforce in the state. Confirmed Subhash Desai, Minister of Industries and Mining, Maharashtra that these MoUs were not cancelled but put on hold. The state is awaiting instructions from the Centre over the investments given the backdrop of the evolving trade dynamics of the two nations.
EV demand impacted? As more and more customers look to buy affordable products due to the lower disposable incomes and a tendency to save cash amidst Covid-19 crisis, the demand for Electric Vehicles (EV) is likely to get impacted. It could lead to manufacturers going back to producing conventional fuel-based vehicles claims a report titled ‘Towards a Clean Energy
Economy: Post Covid-19 Opportunities in India’s Energy and Mobility Sectors’ prepared by Niti Aayog and Rocky Mountain Institute. As per the report, with manufacturers focused on resuming operations and revisiting the pending BSVI vehicles orderbook, delays in EV manufacturing are inevitably compounded with curbs on imports of components from China.
AUTO COMPONENTS INDIA n AUGUST 2020
Li-ion Battery: The mainstay of EVs?
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Li-ion batteries will continue to remain the mainstay of electric vehicles until 2020 despite the limitation on sourcing of lithium as raw material and availability of the most used material in electric vehicle batteries says a Frost & Sullivan survey. The rise in sales of electric vehicles has accelerated the demand for Li-ion batteries and battery
materials. This is due to the implementation of strict emissions standards globally and government policies which are
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incentivising EV products for promoting green mobility. While efforts are being made to develop alternatives for Li-ion batteries, adoption of such alternatives is expected to happen only in the second half of the decade. The study expects the requirement of high energy density batteries to play a key role in the selection of
specific battery materials. With rapid expansion in battery manufacturing infrastructure, the need to mandate ethical sourcing of raw materials, reduction in the use of critical materials, and developing processes and infrastructure for recycling and end-of-life management for Li-ion batteries is also increasing as per the study.
Mobilised
MAHLE Low Voltage Drive System The low voltage drive system from MAHLE Holding (India) consists of an IPM motor and a controller aimed at small electric vehicles. Story by: Deven Lad
plant according to Raj Kalra, President at MAHLE. Averred Kalra, “The IPM motors we produce are eco-friendly products for two and three-wheelers. It comes with a high level of efficiency and is low on Electromagnetic Compatibility (EMC) emissions besides being resistant to the Indian road and climatic conditions.� The company developed, produced and commercially launched the low voltage IPM motor with a controller in the first week of June 2020.
www.autocomponentsindia.com
AUTO COMPONENTS INDIA n AUGUST 2020
M
ahle Holdings (India) Pvt. Ltd. first showcased its low voltage drive system at Auto Expo 2020. Consisting of a low voltage Interior Permanent Magnet (IPM) motor with a controller, the drive system is specially designed keeping in consideration the requirement of small Electric Vehicles (EV) ecosystem. Especially the electric two and threewheelers segment. Claimed to be high on localisation, the drive system will be produced at the MAHLE Electric Drives India (MEDI) Coimbatore
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Mobilised
and load condition voltage. The boost mode, for instance, in the drive is claimed to improve both the vehicle acceleration and the top speed. The hybrid control offers additional assistance for speed control.
Raj Kalra, President, MAHLE
AUTO COMPONENTS INDIA n AUGUST 2020
The low voltage drive system
With a 92 per cent efficiency level, the system is claimed to be highly reliable. Attributed to an innovative motor controller design that delivers a high power density of more than 10 kW/l. Explained Kalra that it plays a key role in enhancing drive performances during recuperation, acceleration, braking and hill hold. It enhances life besides offering low levels of Noise, Vibration and Harshness (NVH). State-of-the-art MOSFET devices are said to have been used in the controller power stage. They are known to provide greater efficiency while operating at low power voltages. MOSFET due to the absence of gate currents are known to result in high input impedance thereby resulting in high switching speed for instance when compared to Junction Gate Field Effect Transistors (JFET). In case of EMC, built to comply with the UN ECE R10-05 standards, the latter is claimed to be low on emissions. A high EMC immunity as a result of devices exposed to the electromagnetic phenomena is crucial to such specialised goods. Among the software, advantages are improved Field-Oriented Control (FOC) claimed to result in smooth and accurate torque control on any ground
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The low voltage drive system comes with a modular and compact design. It consists of a Permanent Magnet Synchronous Motor (PMSM)electric motor with a nominal voltage of 24 to 80 V and a nominal power of 6kW (peak 10kW). PMSM motors are known for higher efficiency compared to brushless dc motors; no torque ripple when the motor is commutated; higher torque and better performance; more reliable and less noisy compared to asynchronous motors; higher performance in both high and low-speed operations and low rotor inertia aiding in ease of control. The system is known to be made available as an independent and complete system with a separate motor controller. It offers a torque range of 2040 Nm at up to 9,000 rpm.
hopeful of many potential clients turning to us.” MAHLE’s go-tomarket strategy has plans in place for offering 48V PMSM motors and controllers in the range from 4 to 18kW from the Coimbatore plant too. The company is also looking to expand the range further in a bid to cater to the high voltage high capacity motors aimed at hybrids. MAHLE manufactures motors designed for nominal system voltage from 24 to 800 V and with a mechanical power output from one to 250kW with flexibility in design to comply with specific customer needs. ACI
Go-to-market strategy
MAHLE’s MEDI has resumed work of manufacturing high capacity motors and controllers for electric two and three-wheelers in the month of May according to Jupiter Kalra, Head of Sales Planning Asia, MAHLE. Averred Kalra, “We have a pending order pipeline so we started production. Post the easing of the pandemic and its associated restrictions we are
Ather 450x has a 6 kW/26 Nm electric motor which gets its energy from a 2.9 kWh lithium-ion battery
Cover Story
Greaves Cotton Growth Levers Greaves Cotton Limited continues to tap into new growth levers like affordable emobility and sustainable cleantech solutions. reaves Cotton Ltd. has found success with new levers of growth. Ranked 13th in Fortune India’s Mid-sized Marvel section of ‘The Next 500’ list, the company continues to contribute strongly to the affordable and last-mile mobility ecosystem. On one hand the company has tightened its grip through a refreshed positioning in the engine and engine products business with its BSVI range while on the other hand, the Original Equipment Manufacturer (OEM) is counting on its diversification into new businesses like
emobility and cleantech solutions. Helping it withstand the headwinds, the new businesses include new engine applications, MB Spares and new mobility. Notably, it has helped the company add Rs.400 crore to the overall revenue since FY2017 (including growth delta). In effect, from contributing six per cent to the overall revenue in FY2017, new businesses have grown to contribute 21 per cent to the overall revenue in FY2020, at a near 4x growth rate. Revenue for FY2020 from new mobility
AUTO COMPONENTS INDIA n AUGUST 2020
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Story by: Deven Lad
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Cover Story
segments as a subset of the new businesses is pegged at Rs.145 crore compared to Rs.48 crore in FY2018. According to Nagesh Basavanhalli, Managing Director and Chief Executive Officer, Greaves Cotton Ltd., the company continues to accelerate its new business initiatives and scout for new levers of growth. Averred Basavanhalli, “We are offering uninterrupted journeys in the affordable mobility space where we play in the heart of the market in the price band of Rs.35,000 to Rs.80,000.” “We are optimistic of growth in the electric two-wheeler and e-rickshaw segment coupled with allied segments where we also see an uptick,” he said. The company in 2015-16 had decided to diversify the business to cleantech sectors and in the non-automotive domain. In the non-emobility segment, the company provides affordable mobility solutions, manufacturing four lakh plus engines annually. The company had crossed five million engines at the end of FY2019.
AUTO COMPONENTS INDIA n AUGUST 2020
Shifting emobility levers
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Building a strong EV portfolio under the Ampere Electric Pvt. Ltd. umbrella has the company command a 21 per cent market share amongst the organised players. The portfolio has been further strengthened by expansion, acquisition and the recent new electric scooter - ‘Ampere Magnus Pro’ launch. It joins the existing products: ZEAL and Reo Elite in the electric two-wheeler portfolio. In line with the 3R approach, through Ampere Vehicles, the company recently announced the acquisition of Noida based electric three-wheeler company Bestway Agencies Pvt. Ltd. (BAPL). Speaking of the acquisition, said Basavanhalli, the objective was to build on the company’s strengths. “We command a 70 per cent market share in engine, three-wheeler and the passenger-cargo segment that makes up the last-mile mobility. The idea is to cater to the customer needs for a www.autocomponentsindia.com
In the non-emobility segment, the company provides affordable mobility solutions, manufacturing four lakh plus engines annually.
complete ecosystem in this segment where the building products will cater to the duty cycle, service, spares including financial services through Greaves Finance.” Greaves Cotton has acquired a 74 per cent stake in BAPL with an objective to accelerate the development of cleantech solutions especially aimed at offering affordable last-mile mobility. BAPL sells e-rickshaws under the ‘Ele’ brand, claimed to be amongst the top three brands in the organised markets of
East India besides its stronghold in Eastern Uttar Pradesh. The latter also sells parts of electric three-wheelers and has a presence in 16 states operating with 125 dealers including a manufacturing unit in Greater Noida. With a claimed strong B2C presence in the mass market passenger segment, BAPL is known to have ventured into the cargo carrier and B2B commercial mobility segment with custom-built applications. The BAPL development, manufacture, distribution and sale of electric
Ampere Magnus Pro is a high speed, top of the line product.
Net operational revenue for the fourth quarter ended March 2020 (Q42020) stood at Rs.359.58 crore compared to Rs.494.67 for the previous quarter (Q32020). The net profit stood at Rs.10.03 crore for Q42020 compared to Rs.54.05 for Q32020. For FY2020, total revenue stood at Rs.1821.11 crore with the net profit amounting to Rs.147.51 crore down from Rs.169.30 crore in FY2019. The company has grown at a Compounded Average Growth Rate (CAGR) of four per cent for the period FY2017-20. For FY2020, Ampere’s net revenue is pegged at Rs.89.8 crore with a Profit After Tax (PAT) at (-) 20.4 crore attributed largely to higher expenses compared to the previous financial year.
vehicles, includes e-rickshaws and e-loaders but does not limit to it. Among potential new launches from Greaves Cotton are the Lithium-ion E-Rickshaw and E-Loader. With the new acquisition, the company is hoping to address a wider range of customer segments. The first phase of the acquisition (74 per cent) was scheduled to be completed by July 30, 2020, and subject to
closing conditions. For the first phase of the acquisition, an upfront cash consideration of rupees seven crores (includes share purchase consideration, and non-compete and non-solicit fees, payment being subject to completion of pre and post-closing obligations). The second phase of acquisition (26 per cent) is aimed at by August 2021, subject to various conditions agreed between the two entities.
To create an alternate supply chain, the company is looking to accelerate its localisation levels by developing and designing new supply side frameworks.
Covid-19 material impact and China trade According to Basavanhalli, the Covid-19 pandemic has slowed down the entire industry and Greaves Cotton is not immune to it either. “The pandemic has directly affected both the demand and supply side creating a severe impact on the overall economy.” Citing liquidity pressures, he acknowledged the downward pressure on the sector as a whole. He added that the company had re-evaluated and accelerated select plans to bounce back. “Our business practices and strong Enterprise Risk Management (ERM) framework has helped in dealing with such an unprecedented crisis. Our approach has been to respond and not react to critical situations,” he expressed. Further commenting on it, he added, “We’re watching both the demand side and supply side and taking required measures internally.” The company is known to have utilised the opportunity to prepare its responses to the post Covid-19 reality where the focus remains primarily on ensuring readiness to jumpstart operations by implementing social distancing at factories with a cautious optimism. The Company is claimed to
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AUTO COMPONENTS INDIA n AUGUST 2020
Bestway ele E-Rickshaw
Cover Story
Financial snapshot
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Cover Story
Ampere alone boasts of 385 outlets to cater to an estimated pool of 20,000 customers.
Business outlook
Greaves Auto Care
have prepared a well-chalked out plan to deal with the crisis situation and put in place a comprehensive action roadmap across its various functions. There is pent up demand across gensets, engines and farm equipment, he stated. Speaking on the China trade barriers, admitted Basavanhalli, China had majorly attained volume efficiencies owing to economies of scale. To create an alternate supply chain, the company is looking to accelerate its localisation levels by developing and designing new supply side frameworks. As of current, the company is heavily dependent on China with lack of alternatives for the immediate near term.
AUTO COMPONENTS INDIA n AUGUST 2020
Aftersales organisation and digitisation
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Deploying a 3R Approach, the company has turned agile to be able to ‘Respond’ to challenges and opportunities with a quick turnaround time; ‘Redouble’ efforts to meet quick business objectives and ‘Reimagine’ positioning to fuel its future growth strategy. The measures include cashflow management, manufacturing and supply chain stabilisation, working capital management, cost management, enhancing supply www.autocomponentsindia.com
chain flexibility, accelerating channel expansion and customer acquisition besides reimagining partnerships and alliance among other strategic initiatives pertaining to not just the near but the long term. The company continues to aim to sustain a dominance in after sales and service market. The company aiming for a stronger aftermarket play has a network of upto 6300 retail outlets, 10,000 mechanics backed by a mechanic loyalty program. Deemed as the fastest growing electric two-wheeler brand,
Greaves Cotton according to Basavanhalli is progressing well on its strategic objectives. Be it shifting from diesel to cleantech solutions in a bid to turn technologically agnostic or the foray into nonautomotive sectors. From focussing solely on Business-to-Business (B2B) to strengthening its Businessto-Client (B2C) exposure largely credited to the Ampere market share growth, addition to the pool of aftermarket retailers and the share of new buisnesses. On the sectoral growth of electric twowheelers, the company continues to remain optimistic on the growth prospects. Basavanhalli attributed the optimism to the projections of a price improvement given the delta between petrol and diesel in India. He also attributed it to the sector addressing range anxiety with the average travel range on a single charge settling at 60-75 kilometres, and expected to increase going forward. Speaking on the automotive sector on the whole, the company maintains a cautious oulook, he signed-off. ACI
Bikesharing startup Bounce is among key clients of the company.
Cover Story
Upfront
Q. How much does the emobility business contribute to the overall revenue? Did you anticipate the kind of growth you’ve registered with this new business? A. As seen from the last annual report, new mobility businesses are now contributing to more than 15 percent of our revenue. As you are aware, we are in the affordable mobility space offering uninterrupted journeys. I think in terms of growth, it will come from the electric two-wheeler and erickshaw segment backed by allied segments. We’ve reported a 21 per cent market share in the new mobility business attributed to Ampere Electric. We believe at the
Rs.35,000-80,000 price bracket, we are well poised catering to the heart of the market. Q. Your major clients in the EV space and any 100 percent key clients ? A. We do have OE clients like Big basket of Innovative Retail Concepts Private Ltd., the bikesharing startup Bounce and we continue to add more. Q. You’ve been a strong player in the three-wheeler combustion engines. Are you confident of replicating that success with the BAPL acquisition? A. Greaves has been a strong player in the affordable, last-mile mobility segment. When you look at the 70 per cent market share in the engine, three-wheeler and the
passenger-cargo segment it compounds to be the entire segment in India. Together with Ampere in the two-wheeler space and Bestway Agencies Pvt. Ltd. (BAPL) opening new fronts in the electric three-wheeler segment we stand a good chance of being one of the organised players who can cater to affordable last-mile mobility and offer the entire ecosystem. It all adds up with building products for the duty cycle, service, spares and finance. Q. Has the Covid pandemic dampened your outlook on the emobility segment? A. We definitely look at it as a short term impact on the sentiments. In the longerterm, we believe, the sector will revive driven by the end consumer’s preferences for personal mobility. For some of our www.autocomponentsindia.com
AUTO COMPONENTS INDIA n AUGUST 2020
Nagesh Basavanhalli, Managing Director and Chief Executive Officer, Greaves Cotton Ltd.
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Cover Story
vehicles, retail has gone up by 60 per cent. The same trend is extending to B2B customers like Big basket and other e-commerce players looking to add to their last-mile delivery fleet. We are definitely in it for the long haul and are looking at Covid as a near term disruption. Q. What measures are you taking to ensure a sustainable growth and return on investment for the parent company and subsidiaries? A. We’re closely watching both the demand side and supply side and taking all the measures to sustain business like cashflow management, manufacturing and supply chain stabilisation, working capital management, cost management, enhancing supply chain flexibility, accelerating channel expansion and customer acquisition besides reimagining partnerships and alliance among other strategic initiatives pertaining to not just the near but the long term.
AUTO COMPONENTS INDIA n AUGUST 2020
Q. You have also diversified into battery manufacturing. Tell us about the localisation levels and any technical JVs to leverage the entire lifecycle? A. We’ve said this as part of the localisation commitment to the Government of India. This excercise was on pre-Covid and we are only further accelerating the drive. The China dependent supply chain will be substituted with in-house initiatives and or with our strategic partners. We will not foray into the battery cells. Our focus will remain on battery management systems, motors, and controllers to name a few.
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Q. How are you tackling the supply chain bottlenecks with the backdrop of Chinese import congestion? A. China scaled up volume efficiencies because of economies of scale. So I think what we’re trying to do is accelerate our own localisation drive. Over a period of a time, we believe that we will be able to manage this short term hitch. We’re all still dependent on www.autocomponentsindia.com
driven by price falls and the delta between petrol and diesel in the country. The economy continues to stay strong and with more and more people getting comfortable with the range anxiety clocking on an average 70 kilometres on a single charge.
China because a lot of the supply chain origins there. Q. How have learnings from your prototype E3 been leveraged? Any commercial derivatives of it for the near to medium term? A. It has derived a lot of positive consumer responses. Now, as you can imagine, we have our hands full with the product strategy plans to launch three products under Ampere, and commercialise Best Agency’s rickshaw. We will comeback on it when we are ready. Q. To sum up on e-mobility, what are the growth and challenge areas in the near to medium term? A. We just launched the Ampere Magnus Pro, a high speed, top of the line product with a lot of technology left to be launched on the Ampere side. So we will continue to develop more consumer features, thanks to our 60,000 plus customer pool nurtured over the last 12 years. So you can continue to expect retail outlets and dealership chains to expand. There is need to heighten awareness but we are growing every quarter. With economies of scale that should be taken care of in due course of time. Q. A word on the emobility sectoral growth on the whole? A. I expect the electric two-wheeler segment to grow. We expect the growth momentum seen in the past to continue. It will be
Q. You had demonstrated the new dealership and workshop experience some years back. How much of that has been implemented on ground and does it need alterations in line with the contactless approach? A. That’s a good point. All of our dealers including Ampere have taken all the precautions. We are looking at the product and service training, virtual meets and a standardised experience that needs to be passed on at the end of the day. We believe, our dealers are ready. Like I said, we want to use picture tools to guide them several initiatives have been taken in terms of adopting the best practices for the inside and outside of the the company. We will continue to support them on high priority. Q. Has digitisation and organisation become a top priority for your aftermarket presence in a sector still largely unorganised? A. I think clearly like you said the sentiments will take a couple of months to probably improve, but it is getting better. We have seen an improvement in June. But yes, until then absolutely, digitisation of communication and making sure that we are watching everybody’s safety will be on top of the list. We are conducting business in the most responsible manner. Detachable battery
Cover Story
Battery Replacement Demand The replacement of old and discharged batteries is expected to drive growth in the battery segment. ith the ongoing pandemic, there is a glimmer of hope for the aftermarket segment. Batteries are expected to be the outliers despite the overall weakness witnessed by the automotive sector. Especially Lead-acid Batteries (LAB). The LAB segment revenue is estimated to grow marginally (~ one per cent) to Rs.330 billion in FY21E. It is expected to be driven by the aftermarket volume growth of 14 per cent in two-wheelers and an estimated six per cent
from other vehicular segment batteries. Nonutilisation of vehicles driven by lockdowns according to the Emkay Global report will translate to batteries discharging. Old batteries, it is expected would be replaced. This in turn will positively impact the aftermarket volumes. Here Original Equipment Manufacturer (OEM), Exports and Industrial battery segments will be an exception and continue to be under pressure.
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AUTO COMPONENTS INDIA n AUGUST 2020
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Story by: Ashish Bhatia
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Auto Ancillaries
Story in Charts: Replacement demand to aid qui
PV
CV
Tractor
Growth (%, RHS)
www.autocomponentsindia.com ay Research
20
Source: Emkay Research Source:Bloomberg, Emkay Research
5,017 3,750 Growth (qoq%, RHS) 3 3
3,617
Exhibit 2: CAGR ove
70 60 50 40 30 20
38.
10 0
FY1
Source: Indu
Exhibit 4: notable pa 200 150 100 50 -
Source: Bloo
Exhibit 6: below hist 40 35 30 25 20 15 10
5 0
Apr-10 Oct-10
Current
Q4FY20
Q3FY20
Q2FY20
Free cash flow (Rs mn) Lead (Rs/kg) FCF yield (%)
Q1FY20
Q4FY19
Q3FY19
Q2FY19
Q1FY19
AUTO COMPONENTS INDIA n AUGUST 2020
A shift in the share of unorganised players in FY2021 Exhibit 1: Battery Industry to grow ~1% to Rs330bn in FY21, led by is expected. If customers move growth in auto replacement segment towards cheaper products due to the economic slowdown and priority shift towards greater cash conservation, it could particularly FY21E 48 16 13 12 impact the commercial segment across taxis, three-wheelers, commercial vehicles and tractors. Replacement volumes are expected to grow at 14 per cent for twoFY20E 43 27 11 11 wheelers and six per cent for others. The medium-term has favourable projections for the organised sector 0 20 40 60 80 100 though. Previously, the share of the India Equity Research | Sector Update unorganised segment in replacement Auto Inverter E rickshaw UPS Telecom Solar Traction market reduced in two-wheelers from 39 per cent in FY2017 to 36 per to aid Source: Industry, Emkay Research arts: Replacement demand quick recovery for Battery Industry cent in FY2020. In the case of other vehicular batteries, from 50 per cent Exhibit 3: Automotive replacement volumes to grow at 6% in FY21E in FY2017 to 45 per cent in FY20 and 6% CAGR over FY20-25E ndustry to grow ~1% to Rs330bn in FY21, led by Exhibit 2: 2W replacement volumes to grow at 14% in FY21E and 8% due to a shift in customer preference acement segment CAGR 40 over FY20-25E 10 toward better quality batteries and 35 the launch of cheaper products 70 4.9 168 4.7 30 by organised players. In FY2020, 4.4 14 60 4.2 6.2 4.0 25 6.1 organised players commanded a 6.0 3.9 126 48 16 13 12 3.6 6.3 5020 5.9 share of nine per cent in passenger 5.5 5.2 104 vehicles; 33 per cent in tractors; 36 4015 18.1 8 17.3 16.5 14.3 13.3 per cent in two-wheelers; 55 per cent 12.3 63.3 3010 11.4 59.6 54.3 62 52.9 in commercial vehicles and 74 per 48.5 5 42.6 20 38.2 4.9 4 4.7 4.5 4.4 4.3 4.2 3.7 43 27 11 11 cent in three-wheelers. 0 0 10 Stable growth in the aftermarket FY19 FY20E FY21E FY22E FY23E FY24E FY25E 2 segment is attributed to the 0 0 downgrade of60 battery service 20 40 80 life 100 FY19 FY20E FY21E FY22E FY23E FY24E FY25E 3W PV CV Tractor Growth (%, RHS) attributed to higher starts per day r E rickshaw UPS Telecom Solar Traction 2W batteries (mn units) Growth (%, RHS) (starts per day has increased from Source: Industry, Emkay Research 11 per day in 2011 to 19 in 2018) ay Researchand increase in electronic content of Source: Industry, Emkay Research Exhibit 5: Healthy liquidity position, and positive FCFs expected to vehicles, pickup in the OEM segment continue ive replacement volumes to grow based at 6% in 4: Benign lead prices to support gross margins evenprices after for the whole, it is expected to drive onwards from FY2022E onFY21E On Exhibit the fall in global crude FY20E FY21E FY22E r FY20-25Ea low base, pent-up demand and notable pass-through a Compound Annual Growth Rate the delay in EV penetration. It (CAGR) of Raja eight to 10 per cent. gradual recovery in economic classifies it as a structural risk Amara 10 200 15 activity. Growth in industrial given the associated downside risks Net cash (Rs mn) 1,537 3,503 5,850 10 outlook segments is expected to be led4.9 by of delayed economic recovery, 8 Positive 150 4.7 4.4 Net debt/equity(x) (0.0) (0.1) The report attributes the positive UPS, 4.2 e-rickshaw, solar and traction greater competitive intensity5(0.1) and 6.2 4.0 6.1 6 6.0 3.9 outlook on battery companies to or Electric Vehicle Batteries (EVB). adverse movement in commodity 100 6.3 Free cash flow (Rs mn) 3,077 3,464 3,870 5.9Automotive 5.5 is expected to contribute expectations of quick recovery, prices. Notably, the replacement 4 FCF yield (%) 3 4 4 50 low fixed costs at 11-12 per cent of 48 per cent compared to 43 per cent demand will not increase warranty 18.1 17.3 (5) 16.5 14.3 13.3in FY2020. 2.3 revenue, margin support E-rickshaw is expected 2 normalised costs given that the replacement is Exide Industries from benign lead prices with a 15 to contribute 13 per cent compared expected from old batteries.(10) The 4.9 4.7 4.5 4.4 4.3 4.2 Net cash (Rs mn) 4,816car market, 6,463 7,857 0 per cent fall in Q4F2020 backed to 11 per cent. Traction motors are used it is opined, will 20E FY21E FY22Eto FY23E FY24E by a Net healthy liquidity position of expected contribute threeFY25E per outdo car market over debt/equity(x) (0.1) the new (0.1) (0.1) select companies. The report blames cent in the projected revenue mix. the next few years. Double-digit 3
Source: Com
FY20E
FY21E
FY22E
4.7 6.1
4.9 6.2
16.5
17.3
18.1
3.7
4.2
4.3
4.4
4.5
4.7
4.9
FY19 3W
Current
14.3
Q4FY20
13.3
Q3FY20
11.4
12.3
Q2FY20
4.0 5.9
Q1FY20
3.9 5.5
Q4FY19
3.6 5.2
FY20E FY21E FY22E FY23E FY24E FY25E PV (Rs/kg) CV Lead
aid qui
Exhibit 2: 2 CAGR ove
70 60 50 40 30 20
38.
10 0
FY1
Source: Indu
Exhibit 4: B notable pa
10 15
200
10 8
150
5 6 4 (5) 2 (10) 0
Tractor Growth (qoq%,Growth RHS) (%, RHS)
100 50 -
AUTO COMPONENTS INDIA n AUGUST 2020
liquidity position, and positive FCFs expected to
4.4 6.0
4.2 6.3
Q3FY19
The LAB industry is also expected 8 4.9 4.7 to shift4.2 towards4.4 newer products. 6.2 4.0Dominated by 6.0 6.1 Flooded 6 3.9 Conventional 6.3 5.9(CFBA) and VRLA batteries in 5.5 4 FY2019, the stricter emission 18.1 17.3 norms 16.5 14.3 13.3 2.3 are expected to drive the market 2 towards Enhanced Flooded Batteries 4.9 4.7 4.5 4.3 4.2 (EFB) 4.4 in passenger vehicles. It is 0 Y20E FY21E FY22Ethat FY23E FY24E FY25E projected the acceptance of EFB over CFB will drive realisations by 1520 per cent.Tractor The industry isGrowth evaluating PV CV (%, RHS) new products like Gel VRLA at a price ay Researchmultiplier of 1.8-2x over the VRLA; Bipolar at a price multiplier of 0.8-
200 40 35 150 30 25 100 20 15 50 10 -5 0
Q2FY19
10
Q1FY19
New technologies
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growth is expected to support 0.85x; Ultra at a price multiplier of 1.2x the replacement demand for PV and Spiral at a price multiplier of 3.5x. batteries. At eight per cent CAGR In Gel VRLA, an electrolyte that has a for two-wheelers and five per cent silica additive is converted into a gel. CAGR for other vehicular batteries It enhances the LAB with an ability to over FY2020-25E, the growth in two- withstand high temperatures coupled wheeler is attributed to the increased with high resistance to deep discharges. share of electric start vehicles. It is On its future adoption, cranking expected to remain stable over the capabilities severely impacted in lower medium term. The growth in the temperatures are being studied. Bipolar Exide EFB Battery e-rickshaw segment is expected to batteries feature a conductive plate be limited due to high competitive withAuto bothAncillaries sides serving as positive India Equity Research | Sector Update intensity. and negative electrodes. Reducing the The report expects the duopoly lead requirement, the products can be of Exide Industries anddemand Amara Raja to adapted Indian standards. Ultra, arts: Replacement Story aidforquick in Charts: recovery Replacement for Battery demand Industryto Batteries to continue. Dominating a hybrid combination of traditional the LAB segment, the two command battery and carbon-based capacitor an 80 per cent market share in known to boost dynamic charge ndustry tothe grow ~1% to Rs330bn in FY21, led by acceptance Exhibit Exhibitleading 1: 2: Battery 2W replacement Industry to volumes grow ~1% to grow to Rs330bn at 14% in FY21E FY21, led andby 8% organised replacement market up to 75 per cent acement segment growth CAGR over in auto FY20-25E replacement segment attributed to strong brand recall and reduction in charging time will find retail presence. Exide and Amara application in micro and mild hybrids 70 16 Raja have a market share of 29 per for the medium term with applicability Flooded HSP Classic Range 14 60 cent and 22 per cent respectively in limited to SLI in the medium term. FY21E 12 48 16 13 12 48 16 13 12 50 the two-wheeler segment. In other The spiral wound that uses tightly 10 segments, they hold a 27 per cent rolled,40 spiral plates into cylindrical 8 and 16 per cent share respectively. In cells that 63.3 30 are packed in a condensed 59.6 54.3 6 52.9 e-rickshaws, Exide has a 16 per cent space offer a higher cranking power 48.5 42.6 20 38.2 FY20E 4 43 27 11 11 43 27 11 11 share as per the Emkay Research and better vibration resistance. Finding 10 statistic. With a gradual scale of application in the premium segment, 2 EV penetration, the LAB industry the high 0 price differential could limit 0 is expected to 60 peak in FY40. The predicts 20 40 80 The 100 its adoption.FY19 0 report FY20E 20 FY21E FY22E 40 FY23E 60 FY24E80FY25E 100 estimate is on the assumption of electric vehicles to use lead-acid er E rickshaw UPS Telecom Solarat Traction AutolessInverter 2W batteries E rickshaw (mn Growth Solar (%, RHS) Traction EV share in annual volumes 45 batteries with power (75-80 per units)UPS Telecom per cent in two-wheelers and threecent reduction). ACI Flooded Gen-X Range ay Researchwheelers by FY2039, 30 per cent for Source: Industry, Emkay Research passenger vehicles by FY38, 10 per tive replacement to grow at 6%and in FY21E Exhibit 4: 3: Benign Automotive lead replacement prices to support volumes gross to margins grow at 6% even in after FY21E cent forvolumes commercial vehicles r FY20-25E notable and 6% CAGR pass-through over FY20-25E three per cent for tractors by FY38.
Source: Bloomberg, Emkay Research Industry, Emkay Research
Source: Bloo
Exhibit 6: 5: Valuations: Healthy liquidity One-year position, forward andP/E positive (EXID:16x, FCFs AMRJ:15x) expected to below continue historical averages (EXID: 22x, AMRJ:19x)
Exhibit 6: V below hist
40
www.autocomponentsindia.com FY21E FY22E 40 21
FY20E
Business Filing
Advanced Lead-acid Batteries Amara Raja Batteries has partnered Gridtential Energy to assemble and test advanced bipolar lead-acid batteries aimed at electric and hybrid vehicles. Story by: Deepti Thore
T
AUTO COMPONENTS INDIA n AUGUST 2020
he next generation of batteries already developed or being developed are aiming to outdo the previous generation batteries broadly on fronts like charge capacity, charging speed and battery life. All of this while also being cost efficient. A significant upgrade is the deployment of bipolar battery technology. Bipolar battery advantages over the previous generation include uniform current density, increased active material utilisation, higher energy density, higher power density and simpler construction. Looking at its potential, Amara Raja Batteries Ltd., and Gridtential Energy Ltd., have partnered under a ‘Technology Evalution Agreement’. Amara Raja and Gridtential Energy in a joint effort will assemble and test the Silicon Joule™ bipolar reference batteries using the former’s active material to test it on fronts like cyle life, energy density, battery efficiency, charging rates and
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The unique Silicon Joule™ bipolar technology from Gridtential.
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manufacturability. Averred John Barton, Chief Executive Officer, Gridtential Energy, “We believe that Silicon Joule advanced lead battery technology is a perfect fit for the Indian market, offering a high-performance and a low-cost solution.” Gridtential Energy, the inventor of Silicon Joule™ provides non-exclusive licenses. The technology is expected to find application in hybrid-automotive, Low-Speed Electric Vehicles (LSEV) and Energy Storage System (ESS). It is aimed at enabling manufacturing partners to effectively equip their factories to churn out the battery in 24V and 48V variants. To put things in perspective, the 48V battery market for hybrid vehicles alone represents a USD 30 billion opportunity worldwide with the backdrop of 12V electrical systems found to be strained with mechanical operations associated with car and truck models. The former is said to provide the firepower for hybrid automotive features, such as stop-start energy regeneration and engine shutoff at higher speeds. Manufacturing partners can look forward to upgrade sans any giga-scale capital investments as per claims made. Expressed Jayadev Galla, Vice-Chairman and Managing Director at Amara Raja Batteries Ltd., “As an organisation committed to innovation, entrepreneurship and pursuit of excellence, Amara Raja is always interested in exploring new ways to serve our customers with advanced products.” “The unique Silicon Joule™ bipolar technology from Gridtential holds significant potential to deliver enhanced value to our customers. And very importantly, Gridtential helps meet our environmental commitment based on lead battery recyclability greater than 99 per cent,” he opined.
Business Filing
Versus lead-acid batteries
Bipolar battery technology
According to S. Vijayanand, Chief Executive Officer, Amara Raja Batteries Ltd., bipolar battery technology has the potential to bridge the gap between current lead-acid batteries and the increasing demand for new energy storage applications. Silicon Joule™ bipolar technology is claimed to enable an innovative class of advanced lead batteries with silicon at its core. The design driven, low-cost, high-performance, patented energy storage solution is claimed to provide an improved power density, cycle life, dynamic charge acceptance and wider temperature range. Weight reduction of up to 40 per cent due to a novel-stacked architecture, while retaining full lead-battery recyclability are among added advantages. The weightreduction is attributed to the elimination of lead grid and strap material. The cycle life for instance is claimed to improve from a 3x margin to 5x. It is also claimed to improve the Dynamic Charge Acceptance (DCA) from a 3x margin to 10x. Besides the operating temperature extends by an estimated 10 degree Centigrade.
Jayadev Galla, Vice-Chairman and Managing Director at Amara Raja Batteries Ltd.
The heightened compatibility with lead recycling infrastructures is complemented by the energy savings pertaining to recycling courtesy lower lead concentrations.The method of harnessing the semi-conductive properties of silicon wafers for battery applications is proprietary. Collaborating with a 600GWh-scale global manufacturing base and a near100 per cent recycling infrastructure, Gridtential and its licensing partners are planning beta and then commercial production of the Silicon Joule enabled batteries across the next two years. Gridtential Inc., won the Battery Council International’s Sally Breidegam Miksiewicz Innovation Award for its proprietary Silicon JouleTM. ACI
Lead-acid batteries
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AUTO COMPONENTS INDIA n AUGUST 2020
S. Vijayanand, Chief Executive Officer, Amara Raja Batteries Ltd.
The company additionally claims that the technology helps reduce the cost of ownership over the battery life by 80 per cent based on the application it is used for. Leveraging the existing technologies from mature industry supply chains, it is inturn claimed to allow rapid scaling up through the existing lead-battery infrastructure.The patented silicon wafer plates are claimed to provide performance advantages like 2x depth and discharge rate. The Silicon wafers are known to be used as current collectors and inturn replace the lead grids used in traditional lead-acid monoblocs. The reduced lead helps achieve a 75 per cent lower levelised cost of electricity compared to traditional batteries. An added USP is the elimination of non-uniform current density distribution across the electrodes. This in effect helps reduce or eliminate traditional failure mechanisms such as sulfation and stratification. Performance improvements over traditional lead batteries are attained by modifying the existing architectures contrary to electrochemical changes. This is said to allow battery manufacturers the advantage of retaining proprietary advantages across paste formulation, market positions and the distribution channels. It also eliminates the introduction of any poisonous materials or elements into the existing lead recycling streams.
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Business Filing
Riding High on Investor Confidence In the ongoing Series A funding cycle, Euler Motors makes a strong business case with its MaaS offering.
AUTO COMPONENTS INDIA n AUGUST 2020
Story by: Deven Lad
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E
uler Motors is riding high on investor confidence in its business model. Offering Mobility-as-aService (MaaS) stack for India centric commercial Electric Vehicles (EV), the Tesla inspired automotive technology start-up looks to have cracked the investor code. The company has raised Rs.20 crore in the ongoing Series A funding cycle. Led by Venture Capital (VC) company Inventus Capital India it also involves early stage venture fund Blume Venture Advisors Pvt. Ltd., and Singapore-based sector agnostic early stage investor Jetty Ventures India Investments Pvt. Ltd. Ecommerce platform for businesses – Udaan represented by co-founder Sujeet Kumar has also invested. The investment assumes significance
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as it comes close on the heels of the pre-series A round funding where the company raised Rs.15 crore also from Blume Venture Advisors besides a show of confidence from Silicon Valley based VC firm Emergent Ventures and Angel investor Andrew Lee. With the latest round of investment, Euler Motors has got a backing of Rs.35 crore. Averred Saurav Kumar, Founder & Chief Executive Officer, Euler Motors, “We are grateful to our investors for showing confidence in us and our vision for Electric Vehicles. Euler Motors wants to accelerate the adoption of commercial electric vehicles by creating a full stack ecosystem with Indian centric EVs, charging and service station networks.”
As per reports, Euler Motors is known to have received Rs. 12.5 crore from Inventus Capital India while Blume Ventures invested a sum of Rs. 4.6 crore. Jetty Ventures and Sujeet Kumar added the remaining Rs. 1.9 crore each. In effect, Blume Ventures and Inventus are known to command a 22.84 per cent and 13.98 per cent stake respectively followed by a 1.12 per cent stake of Jetty Ventures reportedly. With it Saurav Kumar is known to have offloaded a 12.38 per cent equity share, from 63.25 per cent to 50.87 per cent. According to Kumar, Euler motors will utilise the investor funds to expedite both the product development and technology innovation. “The Series A funds will be primarily used for hiring talents, R&D and launching our vehicles across the Indian key cities with a focus on localisation of the supply chain,” he explained.
MaaS is synonymous to a shift from personally-owned modes of transportation towards mobility provided as a service. By the end of the year, the company aims to launch a threewheeler electric vehicle especially built for commercial logistics. Averred Rutvik Doshi, Managing Director, Inventus Capital India, “For India to unlock the next wave of growth in electric mobility, it is essential to drive the adoption in the commercial vehicle segment with superior electrical vehicles and infrastructure. Euler Motors is an early front-runner in the space and is wellpositioned to build the EV ecosystem.” Euler Motors is said to have built a dedicated manufacturing and Research and Development (R&D) facility for the production of light commercial electric vehicles. The company will also produce localised, automotive-grade lithium-ion battery packs to offer the requisite performance required for intra-city logistics. It is to suit the allweather patterns, temperatures and
diverse terrain requirements across the country. Over the last 18 months, the company has deployed 200 prototype electric vehicles in companies like BigBasket, EcomExpress and Udaan to inturn help overcome last-mile delivery constraints. To support the ecosystem, Euler Motors has established a network of 100+ charging stations in the Delhi NCR region claimed to have a capacity to charge 200+ electric vehicles at a given point and time. Expressed Arpit Agarwal, Principal at Blume Ventures, “Blume Ventures has been associated with Euler Motors since early days. Our initial investment was on the promise of building world-class electric vehicles for Indian conditions. We are happy to see that the vehicle has become a dependable resource for last mile delivery companies.” “This, and upcoming models, inspire a lot of confidence in the ability of Saurav to execute in a very tough market like India. We believe their innovative business model brings down the Total Cost of Ownership (TCO) and makes electric vehicles accessible,” he concluded. ACI
Mobilised
MaaS infrastructure
AUTO COMPONENTS INDIA n AUGUST 2020
Resource utilisation
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Special Reads
India’s Clean Power Revolution Bloomberg Philanthropies, in partnership with BloombergNEF released a report on India’s Clean Power Revolution. The report outlines the current successes and future potential of India’s clean energy economy.
ndia is emerging as the numero uno market for clean energy investment. According to BloombergNEF’s Climatescope, the country has taken centrestage with declarations of ambitious renewable energy goals of 175 GW by 2022 and 450 GW by 2030 (a combination of solar, wind, biomass and small hydro). These ambitous targets are said to be backed by supportive government policies, openness to investors and the sheer
AUTO COMPONENTS INDIA n AUGUST 2020
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Story by: Deepti Thore
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volume of renewables auctioned in recent years. Lessons from India’s competitive clean energy auction market and overall progress could be benchmarked by other economies looking to achieve a green recovery according to Antha N. Williams, Global Head of Environmental Programs, Bloomberg Philanthropies. Afterall, green recovery is believed to have the potential to maximise economic, health and environmental
AUTO COMPONENTS INDIA n AUGUST 2020
benefits. The report is an attempt to outline investment in clean energy that has the potential to help increase energy access and supply and create jobs besides improving climate and air quality. India’s expected growth in power demand till 2030 is estimated to be 80 per cent, and a flexible power system needs to be put in place. It calls for better coordination on land issues to ensure grid availability matches the commisioning of new projects. The financial health and resiliency of power distribution companies are required to be improved to enhance investor confidence. Coals role in the mix will continue to drop despite rising power demand. Here retiring old coal plants will improve utilisation rates of coal fleets and significantly reduce CO2 emissions. As per the report, new clean power generation will enable India to avoid 499 million tonne of emissions a year by 2030. While challenges remain to be addressed, the renewable energy transition is expected to serve transitioning economies.
Mobilised
4.7 per cent. India, notably, has become the world’s third largest consumer behind China and the United States. Domestic and industrial consumers combined, constitute 56 per cent of this demand. In comparison, supply deficit narrowed from 79 Twh in 2010 to six Twh in 2019. A result of rapid expansion of generation capacity, transmission and distribution infrastructure. Interestingly, installed capacity has seen diversification though coal continues to dominate. To service the anticipated demand supply capacity has been doubled as per a statistic. India’s net power generation capacity has been increased by 212 GW with 42 per cent of it coming from renewable energy sources. The report
Demand v/s Supply
Power demand in India grew by 50 per cent in the last decade. Electricity consumption rose from 851 Twh in 2010 to 1285 Twh in 2019 at a CAGR of www.autocomponentsindia.com
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Special Reads AUTO COMPONENTS INDIA n AUGUST 2020
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attributes this jump in capacity to falling technology costs. Solar is at the heart of this growth, it is claimed. The private sector is said to have played a key role. The tipping point, it is said, was 2016 with capacity additions going clean. It is also attributed to the widening gap between the price of coal and cleaner power sources. Private Independent Power Producers (IPP), the report claims, built over 90 per cent of the wind and solar power projects in the past five years. A similar pattern has been studied in Europe. While coal continued to meet three-quarters of
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the country’s power needs in 2019, it was also the first time, absolute energy generated by coal registered a year-onyear decline. The share of natural gas power generation remains at below five per cent levels owing to it being expensive over coal power plants.
Most attractive emerging market
With India’s renewables among cheapest in the world, India is said to have become the most attractive emerging market for clean eenrgy inevstent. As per Climatescope, India
Special Reads
secure a market for its future output as an agreement between the producer and the buyer. Renegotiation of contracts and asset quality of low tarriff projects have been the other big concern areas. It is also true that India’s large tender pipeline has given developers strong bargaining power pertaining to negotiating prices with equipment suppliers. India’s levelised auction tarriffs for both wind and solar are additionally said to be lowest in the world inspite of high borrowing costs and absence of hidden subsidies. The Levelized tariff calculation converts a local currency structured tariff to a common 2019 USD/MWh base after accounting for inflation, the currency of payment, project life and expected date of commercial operation.
How renewables became cost competitive?
The report credits government policies for turning renewables cost-competitve. Lower corporate tax, acceleration depreciation, Inter-State Transmission System (ISTS) waiver and 100 per cent Foreign Direct Investment (FDI) are all said to have helped Government policies become cost competitive. For instance, the tax rate for new power generators at 17.2 per cent down from 34.6 per cent prior to the renewables boom has levelised cost of solar and wind by eight to 10 per cent. An accelerated
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AUTO COMPONENTS INDIA n AUGUST 2020
ranks ahead of China, Brazil and Chile. From 104 emerging markets that is said to account for 82 per cent of the world’s population, covering two-thirds of CO2 emissions, India was scored on 167 indicators. On fundamentals like clean energy policies, power sector structure, regulations and barriers to renewables; on opportunities like power demand, price attractiveness, short and medium-term prospects; on experience like installed clean energy, historical investment and state of value supply chains. Here, the emphasis on decentralised small renewables and boosting domestic manufacturing are stated as having the potential to generate more employment. The need of the hour is to address challenges pertaining to auction cancellations creating uncertainity among particpating developers. Newer auction designs are said to already be addressing these challenges. The introduction of Goods and Services Tax (GST) is blamed for confusion in the solar industry pertaining to applicable tax rate, in July 2017. Safeguard Duty (SGD) in July 2018 for cells and modules sourced from China and Malaysia apart from other developed countries is said to have been the cause of spike in capex costs. Developers impacted are said to be compensated for the additional costs by the offtakers. An offtake agreement helps
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Special Reads
This does not takeaway from the growth potential albeit. India is expected to save USD 78 billion cumulatively in electricty generation costs from now to 2030. It is possible by following the least-cost path to meeting electricity demand according to the study. The Covid-19 has led to the share of renewables going up by an estimated 30 per cent compared to 14-18 per cent levels pre-lockdown. However the report suggests that the pandemic is not expected to alter India’s path to 450 GW renewables supported by government policies. Among financial measures by IPP to keep tariffs lower at newer types of auctions for renewable power include Low IRR expectations for first few projects, benefit from global price decline for PV modules and batteries, lower finance costs from Covid-19 recovery measures and selling off excess power to third party. A robust grid will be essential to integrate 450 GW renewables and serve end-users. There is an greater opportunity to ramp up manufacturing of energy storage technologies given the expected demand from sectors like automotive. The government is trying to support manufacturing by putting out tenders with domestic content requirements, import duties and lower corporate taxes for new units. The government intends to offer dedicated manufacturing parks to attract foreign firms with advanced technology and a will to diversify their global manufacturing bases. ACI
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depreciation rate of 40 per cent has reduced investor income tax burden. Wind and Solar projects comissioned before 2022 are exempted from ISTS charges and losses reduced delivered cost of electricity for offtaker by 0.65 rupees per kWh. The 100 per cent FDI has ensured foreign utilities, VC/PE investors, sovereign wealth funds, pension funds and oil and gas majors participated in the boom. Renewables today according to the study command a priority dispatch. The emission norms for new coal and gas power project are said to be strictest in the world. A weak implementation though has led to a new compliance deadline of December 2022. With coal plants needing an estimated USD 12 billion to install SO2, NOX and particulate matter control equipment, the going is expected to get only tougher for coal plants. Water availability for coal plants is another barrier. Lithium-ion battery prices falling over 87 per cent in the last decade. By 2024, BloomberNEF has predicted prices to be below USD 100 per kWh on a volume-weighted average basis.
Long-term outlook
The New Energy Outlook (NEO) study, an annual study of BloomberNEF looks at the global power systems. An in-depth analysis of 20 countries, the outlook based on the least-cost technology options to meet future electricity demand www.autocomponentsindia.com
highlighted India’s pledge in Paris. India has pledged to attain 40 per cent of its installed capacity from non-fossil fuel based resources by 2030. India is aiming for 55-60 per cent levels at the current rate of over 37 per cent according to Raj Kumar Singh, Union Minister of State (Independent Charge), Ministry of Power and Ministry of New and Renewable Energy. Interestingly, despite the growth in demand, demand from electric vehicles is pegged at less than 0.5 per cent by 2030 when one expects to see early growth indicators. It is noteworthy, that even by 2030 the initial target of going fully electric would have to realign with the the country projected to have lower than Brazil’s per-capita demand then.
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AUTO COMPONENTS INDIA n AUGUST 2020
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Trending
Automotive 3D Printing In a webinar hosted by Messe Frankfurt, 3D printing experts highlighted innovations that are redefining the definites of automotive. Story by: Deepti Thore
M
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esse Frankfurt’s recent webinar brought together experts from organisations including Imaginarium, Design Tech and Divide by Zero. Titled ‘3D Printing to redefine efficiency, cost-effectiveness and productivity for Automotive Industry’, the webinar hosted by Automotive Engineering Show, Chennai, drew attention to the innovative trends in the domain known to have brought about a transformation in
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Trending Ganesh Babu Thiruvengadam, National Manager - Application Engineering at Designtech Systems Pvt. Ltd.,
Nishant Shah, Director, Imaginarium (India) Pvt. Ltd.
the automotive industry. Citing the stakeholder measures to avoid stocking excess inventory besides saving on raw material and unutilised tech, the session opened with the panel unanimously agreeing upon the benefits it has to offer. Among key advantages spoken of were hopeful of being able to avoid long development lead times and nonvalidated designs for production. 3D printing, also known as Additive Manufacturing (AM) involves printing a part layer by layer from a digital design which is in the form of the 3D CAD model. No special tools like a cutting tool or moulds are known to be involved in this process. The part is directly manufactured or printed onto a print bed. Being majorly used for rapid prototyping in the past for the automotive industry, 3D printing, the panellists agreed was fast becoming a prefered choice to create visual models, functional parts, spare parts, jigs and fixtures and in rapid tooling. Stressing on how 3D printing was helping to speed up the design process, improve quality and cut costs, Nishant Shah, Director, Imaginarium (India) Pvt. Ltd. said, “A decade back it used to take months to actually manufacture some parts after designing and to ultimately test the functionality. 3D printing has certainly helped to reduce this time down to a fraction of days and even hours in cases.�
Redefining the EV ecosystem
AUTO COMPONENTS INDIA n AUGUST 2020
3D printing is redefining the EV ecosystem. Be it design or manufacturing. Known to require lightweight, highly specialised
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Swapnil Sansare, Chief Executive Officer at Divide By Zero Technologies. 3D printing is redefining the EV ecosystem.
www.autocomponentsindia.com
components in relatively lower quantities compared to conventional internal combustion enginepowered vehicles, EVs have been found to have increased dependence on Fused Deposition Modelling (FDM). The latter is known to enable the construction of threedimensional objects, prototypes and products through a computer-aided manufacturing process. The melt extrusion method helps deposit filaments of thermal plastics in a specific pattern. A printhead moves along X and Y axis above the build platform.
Redefining light weighting
Light weighting without sacrificing structural strength to attain benefits like enhanced vehicle performance has come a long way. The advent of new materials has helped. A 10 per cent weight shaving could translate to eight to 10 per cent higher fuel economy for instance. Using 3D printing, a study highlighted in the session, drew attention to original equipment manufacturers especially car manufacturers having built the capability to perform alterations at a structural level pertaining to desired components. The redesign of these parts using lattice structures is claimed to involve the use of advanced materials and methodology which in turn has enabled structural elements to deliver equal or greater performance with the use of a less material. Besides the use of composites, additive manufacturing has played a significant role, it were said.
Before finalising the design of any automotive part, it is imperative
to print several iterations. In a traditional process, it takes weeks or even months. However, with the help of 3D printing this process can be streamlined and fast-tracked. It provides design alternatives for better visualisation at an extremely low cost other than fastracking go-to-market time with the help of tier-1 suppliers. Said to redefine the way cars are being imagined, the material quality and process used in rapid prototyping is claimed to help retain the 3D printed part strength. With the final design only approved after testing all alternatives, it offers a high-degree of design flexibility. This facilitates rapid prototyping. It is a common practice to print production parts to meet the requirements of OEMs, claimed Shah. Citing the example of an OEM in urgent need of bevel gears for an AC unit, he explained how due to the loss of injection moulding tools, the company lost two weeks of precious time. Thousands of bevel gears on vehicles due for roll out were needed according to Shah. Imaginarium, he added, did a quick prototyping and got the parts tested and approved in three days before having them fitted on the vehicle. In another example, he spoke of testing a gear assembly for an OEM. The gearbox is claimed to have been printed, tested and installed in the vehicle. Among other instances, light sized bumpers being fixed after their
fitment and aesthetic test, large light parts retrofitted in a vehicle (protobuilt) after satisfactory checking of fitment and
aesthetics were touched upon. The use of transparent material presenting new opportunities in display units were also discussed.
Redefining visualisation
With new car designs flooding the market, it is imperative for designers and stakeholders to validate new designs with visual models. Be it a small tabletop visual model or a full-grown car model. For instance, in one example that came up, Imaginarium was able to 3D print parts for a company wanting to build a supercar for a show in the UK. Most of the parts including the headlamp, black hood, tyres, air vents, wings and the logo were claimed to have been 3D printed. 3D printing it was said goes beyond material or finishes; it can also do transparent or opaque parts for painted classy visual models.
Trending
Redefining tooling
Automobile manufacturers, it was said, are heavily dependent on rapid tooling using 3D printers as an alternative to traditional methods of assembly and manufacture for high quality products. A tooling master model is made. It eliminates long lead times entailed in design change. Citing the world’s first ever super car claimed to have been built using 3D printed parts, Shah said, Divergent, saved on costs associated with mould cast or tooling helping the company reduce the capital cost by a 1/50th margin or two per cent.
Redefining spare parts availability
The session drew attention to the immense potential for spare parts availability. Especially in case of redundant models where parts availability is an issue. It is especially useful if a company were to lose the master designs of spares in question and looking to recreate them. Companies are today in a position to provide such spare parts with quick turnaround times. These companies
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Redefining prototyping
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Trending with the help of 3D printing are able to redesign the spare and build a digital inventory in turn. Other companies offer 3D printing machines for customers to print the desired parts on their own.
Redefining mass manufacturing
“In the coming era it is going to be mass customisation over mass manufacturing in the automotive segment,” stressed Shah. Citing Royal Enfield and Bentley, Shah made a case for 3D printing in niche vehicles. Traditional CNC machines, for instance, are good for mass manufacturing and 3D printing it were claimed had the potential to reign supreme in mass customisation. For manufacturing different parts machines takes a lot of time and needs specific tooling and fixturing. 3D printing, it was agreed upon, helped reduce complex parts like tooling and fixturing without the need for a specific reform or component.
Jigs and Fixtures
Jigs and fixtures is another area of focus for 3D printing. For sheet metal components, jigs and fixtures are mandatory. As per the traditional process metal or casting parts are used in a particular fit and form. 3D printing
allows for a high degree of customisation and said to ensure the integrity fo critical area inspections. Jigs and fixtures can also be lightweighted at the design stage keeping the structural integrity intact. Weight reductions of upto 65 per cent can be attained. Sparse fill margins of up to 72 per cent, in effect, less material built in to a part, cost savings of 58 per cent as an outcome coupled with led time reductions of 72 per cent are the some of the other OE benchmarks that found a mention.
Redefining process and technology
Ganesh Babu Thiruvengadam. National Manager- Application Engineering at Designtech Systems Pvt. Ltd., drew attention to the use of Inkjet or Polyjet technology. Using liquid resins as raw material, fine details are captured in multi-material outputs and end products. The final product with colored or opaque parts, details of the product on the package can be accessed at the push of a button. In FDM, Thermoplastic filament is heated to a semi-liquid state and extruded across computercontrolled tool paths to build parts layer-upon-layer and for Material Jetting, droplets of UV-cured resins are
AUTO COMPONENTS INDIA n AUGUST 2020
Jigs and fixtures can also be lightweighted at the design stage keeping the structural integrity intact.
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deposited in multiple colors and textures for fine detailed prototypes. These techs were deemed to complement each other. Another application is printing patterns for direct or sand casting in turn used as a pattern for casting aluminium or steel. Used by tier-1 suppliers or OEM, these used to take several weeks previously. Companies like Divide by Zero are developing 3D printer machines by adopting Internet of Things (IoT). “In additive manufacturing, all you have is a database of design and it can be fired through different printers. We have IoT enabled machines to store these kinds of designs in design libraries and directly fire them through a location of choice with dual access,” explained Swapnil Sansare, Chief Executive Officer at Divide By Zero Technologies. Using 3D printing processes like Stereolithography (SLA) aesthetic testing and production of highly detailed parts and prototypes with a smooth finish can be carried out, he opined. Selective Laser Sintering (SLS) he said was gaining popularity for its ability to produce limited volume, end use parts.
Redefining material choices 3D printing makes use of a range of materials. One such is PA12. Used for sand casting or investment casting as it burns out quickly. For metal 3D printing, alloys such as aluminium, stainless steel, nickel alloys, titanium and even precious metals like gold or silver are popular. Material associated with jigs and fixtures are ABS M30 and ABS ESD7 among others. Resins are ideal for parts that require high finesse www.autocomponentsindia.com
Trending and detail. Nylon powder is used extensively in SLS owing to its flexibility. Heat and chemical resistance are an added advantage too. The unsintered powder was said to act as a support to the part manufactured. Polycarbonate was highlighted as the other high tensile strength material. A production-grade thermoplastic, it offers accuracy, durability and stability
ABS-M30 material
print such parts using unique geometries thus ensuring reduction of weight of a single part or multiple parts required in an assembly. This reduces weight on the powertrain thus increasing the vehicle range. AM also allows heat exchanging through a 3D printed cooling jacket for the EV’s electric motor and battery which generates a lot of heat during charging. By scanning the car’s motor and battery, the designer develops the design with the help of AM software and then 3D prints the 3D-printed cooling jacket which draws the heat away from the battery and the motor thus enhancing the life of these parts and reducing the wear and tear.
required to building strong parts capable of withstanding functional testing. High flexural strength and high heat deflection temperature are among its USPs. Nylon 12 is another very versatile material with a strong chemical resistance as well as high impact strength and nest z-axis lamination. It was explained as being especially useful for applications like tooling, jigs and fixtures,
production parts, snap-fits and friction fit insets. FDM Nylon 12 exhibits 100 to 300 per cent better elongation at break and superior fatigue resistance over any other additive manufacturing technology materials, it was claimed. Price-performance ratio being a distinct advantage. FDM Nylon 12CF is a carbon fibre filled material enabling lightweight tooling. ACI
FDM Nylon 12CF material
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Trends suggest that Additive manufacturing(AM) or 3D printing is fueling the rise of Electric Vehicles(EVs). With the rising shift towards environment friendly mode of transportation, demand for EVs is rising. This demand has lead to need of lighter vehicles and better engine cooling in the automotive segment. Despite of recent advances in the reduction of the weight of batteries which power EVs, they continue to be heavier components for the EVs. To improve the vehicles efficiency and performance, it is important that the vehicles are lighter in weight hence engineers designing the components of these vehicles are looking for alternatives like AM. AM allows to produce or
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