Covid surge in China has Indian EV makers nervous – EQ Mag
Battery pack makers in India, who depend on suppliers from China, believe that by the time the authorities are able to bring the pandemic under control, the country will shut down for the Chinese New Year in the second half of January.
The Indian electric vehicle (EV) industry could be bracing up for yet supply chain disruption as China experiences its worst wave of Covid-19 infections, causing disruption in battery cell producing factories and other critical components which power EVs.
Battery pack makers in India, who depend on suppliers from China, believe that by the time the authorities are able to bring the pandemic under control, the country will shut down for the Chinese New Year in the second half of January.
None of the Indian EV producers have clarity on supplies beyond January because cell orders for deliveries expected in February are yet to be awarded. The deliveries to be received in January, the orders for which were placed weeks ago, are either in transit or are lying at warehouses within China, say Indian importers.
Samrath Kochar, Founder and CEO of Trontek, said, “I have several contacts with suppliers in China and almost everybody is infected. The situation is quite bad there. Factories are working at 50% staff.” Trontek is one amongst several Indian companies which assemble batteries made of cells produced in China. Trontek supplies to two-wheeler and three-wheeler makers.
Due to a total absence of cell producers in here, China has a near monopolistic control over battery supplies in the Indian market. Last financial year, 73% of lithium-ion products consumed by India were from China. Some Indian vehicle makers like TVS Motor Company, have achieved a high degree of localisation with only the cells coming from outside of the country.
A senior executive of one of India’s top electric two-wheeler brands said, “We understand that some factories in the Beijing area have closed due to the infection. This is expected to spread to other regions as well. Disruption to the supply chain is expected but the duration and magnitude is unknown.”
The pace of new product launches in the electric two-wheeler segment has remained subdued due to the government’s reluctance to release subsidies to companies under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) 2 scheme since April.
Following the implementation of a new battery norm from December 1 and subdued demand from vehicle makers, battery producers do not have a backlog of orders. “We will have to wait for a few more days to understand the impact of Covid on production. We don’t have a backlog of orders as of now,” said another battery pack assembler.
Electric car makers are also keenly watching the developments in China. Car makers have lined up new launches and expansion plans for the coming weeks.
Tata Motors, India’s biggest electric carmaker will expand capacity of the newly launched Tiago EV while Hyundai will launch the Ioniq 5 electric SUV next month. Chinese brand BYD is on track to launch the Atto 3 in January.
“As of now we are not expecting any disruption in January supplies. For February and March, it is too early to comment,” said a senior executive of an electric carmaker.
Source: PTI
