Automobile companies in India are working on planning different types of products instead of focusing only on Electric Vehicles (EVs). She is adopting a careful approach in her investments. Companies believe that the demand for EVs is increasing due to increase in fuel prices, but in the future, many types of energy sources will co-exist. Product planning of auto companies shows that less than half of the new cars launched this financial year will be EVs, while big companies are also continuously investing in petrol, diesel, hybrid, CNG and flex-fuel technology. This gap between the growing demand for EVs and future product planning reflects the uncertainty of companies regarding the transition of India’s auto sector.
Instead of relying on a single technology, auto companies are increasingly adopting multi-powertrain strategies to balance growth opportunities, profitability and investment risk. According to the ET report, changing regulations, uncertainty over long-term policy framework, uneven charging infrastructure, battery supply concerns and questions about EV adoption by customers are forcing companies to diversify across multiple technologies. Although this strategy reduces the risk of betting on a single wrong technology, it also requires companies and suppliers to support parallel products and manufacturing systems.
investment pressure
According to the report, dealers believe that amid these unpredictable changes taking place in the market, companies cannot take the risk of being over-dependent on any one technology. This approach is increasing investment pressure at a time when the industry is already facing one of its largest capex cycles. Car companies are simultaneously investing in EV architecture, hybrid systems, alternative fuels and clean combustion technology. Suppliers are also being affected, as they have to distribute their resources across multiple technology platforms.
Ravi Bhatia, President of Jato Dynamics said that in the current situation, OEMs are being forced to maintain multiple technologies simultaneously. It is no longer just a matter of production capacity. He said it is also a matter of securing long-term investment while meeting the needs of the fragmented consumer market.
This strategy is visible in the entire auto sector. It is expected that Maruti Suzuki will strengthen its presence in the EV market through e-Vitara, and will also increase the range of hybrid and flex-fuel vehicles. Hyundai and Kia are also working on similar plans, which include locally manufactured EVs and hybrid vehicles. Along with strengthening their hybrid portfolio, Toyota and Honda are also focusing on flex-fuel programs in line with India’s ethanol roadmap.
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