New Delhi: Maruti Suzuki India Ltd, Mahindra & Mahindra Ltd, Ford India Pvt. Ltd, Mahindra Reva Electric Vehicles Pvt. Ltd and Tata Motors Ltd have created a consortium that will help develop a supplier base for critical hybrid and electric vehicle components.
The components will feed into the efforts of members of the consortium to build six electric and hybrid vehicles, creating a base of suppliers that have the expertise to make these parts, and also helping them do so economically.
Arvind Mathew, managing director of Mahindra Reva, confirmed the development.
“The idea is to build a supplier base by providing component makers economy of scale. The move will bring down costs and promote the usage of such vehicles," said Mathew.
Code-named xEV One, the project aims to develop components for two different power-trains, hybrid and pure electric, according to a memo reviewed by Mint. These critical under-the-hood components, which will be localized, include the motor, motor controller, charger, DC-DC converter and battery.
A DC-to-DC converter is an electronic circuit or electro-mechanical device that converts a source of direct current (DC) from one voltage level to another.
The first of the six vehicles should hit the roads in two years from 15 July when the central government is expected to unveil the project after it is cleared by the department of heavy industry (DHI).
“The project will focus on developing broad industry-wide product specifications for the above components for two different power trains... for passenger cars and light commercial vehicles," the project brief, reviewed by Mint, said.
All the components that the consortium seeks to localize are expensive and are currently imported, mostly from China. The consortium’s efforts will feed into and off Prime Minister Narendra Modi’s ‘Make in India’ campaign and are timely, given India’s efforts to reduce vehicular pollution.
The project is being steered jointly by the DHI and industry lobby group Society of Indian Automobile Manufacturers. It is part of the Indian government’s efforts to have six million electric and hybrid vehicles on the roads by 2020 under the National Electric Mobility Mission Plan (NEMMP) 2020 and FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles).
Under these programmes, the government and industry plan to invest ₹ 12,000 crore each. In the Union budget this year, the government allocated ₹ 200 crore for these programmes.
For the project xEV One, DHI has sanctioned an initial grant of ₹ 22 crore while each of the companies will make an initial investment of ₹ 4.4 crore for every model it wants to make.
Sales of electric vehicles in India rose 37.5% to 22,000 units in the year ended 31 March 2016, according to industry lobby group Society of Manufacturers of Electric Vehicles. However, only 2,000 units were four-wheelers. The lobby group said that the industry sold 16,000 units in 2014-15.
At these levels, India remains miles away from its six-million-by-2020 target.
The members of the consortium will focus on the design, development and manufacturing of these components , helping nurture one developer for each component; build road-worthy prototype vehicles using these components; and evaluate prototype vehicles for functional performance and safety.
The consortium plans to finalize common standards for these components within five months of the launch, by December. By April, it will seek an expression of interest for sourcing components. The first prototypes are expected to roll out by January 2018 and the deadline for the evaluation of the vehicles is set for June 2018.
A Tata Motors spokeswoman directed queries to Siam.
Vishnu Mathur, director general of Siam, declined comment.
Maruti Suzuki and Ford India did not respond to e-mails seeking comment.
Abdul Majeed, partner and auto practice leader, PricewaterhouseCoopers, said that apart from localization of key components and developing vehicles, the government and industry must come together to create a robust charging infrastructure and also work on increasing awareness about electric vehicles.
But it is a good initiative, he added. “The initial cost of owning the vehicle is prohibitive for the customers. This will bring down costs," he added.