Auto component industry to see 9-11 per cent of revenue from EV parts by 2027: Report

Two-wheelers and passenger vehicles are seen driving the transition, with their penetration rising to 19 per cent and 7 per cent.

Published: 26th July 2022 08:30 PM  |   Last Updated: 26th July 2022 08:32 PM   |  A+A-

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By PTI

MUMBAI: Auto component industry is expected to see 9-11 per cent of its revenue coming from EV (Electric Vehicle) parts by 2027 amid increasing electrification, according to Crisil.

This growth will come even as the supply of parts for the conventional internal combustion engine-driven vehicles will also grow during the period, it said.

EV components' share in the sector's overall revenue during last fiscal stood at a meagre 1 per cent.

Revenue of the electric vehicle components is likely to rev up at a compound annual growth rate of around 76 per cent to Rs 72,500 crore in fiscal 2027 from Rs 4,300 crore last fiscal, it said.

As much as 60 per cent of this revenue is expected to come from the battery segment and 15 per cent each from drivetrains and electronics, with 90 per cent of the EV component supplies likely to be for two-wheelers and PV (Passenger Vehicle) segments, it forecast.

An analysis of 220 manufacturers, which account for a-third of the auto components market, indicates the transition to EVs will create both opportunities and challenges for domestic auto component makers, it said.

"EV components such as batteries, drivetrains, electronics and others present an opportunity for auto component makers to diversify their revenue base beyond ICE (Internal Combustion Engine) vehicles. Companies are already investing in developing electric components, both with established ICE Original Equipment Manufacturers (OEMs) and with new-age, pureplay EV makers," said Naveen Vaidyanathan, Director at Crisil Ratings.

Improving cost viability of EVs versus ICE vehicles, and rising consumer demand for cleaner mobility will drive the transition to EVs, according to Pushan Sharma, director at CRISIL Ratings.

Among the key auto segments, two-wheelers and passenger vehicles are seen driving the transition, with their penetration rising to 19 per cent (from around 2.5 per cent currently) and 7 per cent (from less than 1 per cent currently), respectively, over the next five fiscals, he said.

Commercial vehicles, however, will see far lower penetration at around 3 per cent (0.3 per cent currently) because of unfavourable economics, Sharma added.



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