E-mobility - Evaluating the Opportunities (2020-2030) - India Renewable Energy Consulting – Solar, Biomass, Wind, Cleantech
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by Narasimhan Santhanam



This posevnext-logo-v-smallt is a part of EV Next’s EV Perspectives.

EV Nexta division of EAI, is a leading market intelligence & strategic consulting firm for the Indian e-mobility sector.


 

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This post is part of a series titled “Strategizing for E-mobility Opportunities in India” from EV Next Perspectives. See all posts for this series from here. See previous post The Value Chain for Electric Vehicle Ecosystem – An Introduction

Evaluating the Opportunities

To identify opportunities that are ideal for you, our recommended approach would be to evaluate the components of the EV value chain. While there are parameters specific to your company that you might wish to evaluate these components on, we have provided a start by evaluating all the value chain components on key parameters that will be relevant for all companies.

  • Growth potential: To start with, we provide an estimate of the potential of each of the components in the short, medium and long term.
  • Characteristics of the opportunity: We next provide details of the characteristics of each component on aspects such as Investments Required, Competition, etc.
  •  Requirements for success: We finally provide insights on what’s needed for companies to benefit from each of these opportunities.

  Potential for EV Opportunities

 To identify opportunities that are ideal for you, our recommended approach would be to evaluate the components of the EV value chain. While there are parameters specific to your company that you might wish to evaluate these components on, we have provided a start by evaluating all the value chain components on key parameters that will be relevant for all companies.

  • Growth potential: To start with, we provide an estimate of the potential of each of the components in the short, medium and long term.
  • Characteristics of the opportunity: We next provide details of the characteristics of each component on aspects such as Investments Required, Competition, etc.
  • Requirements for success: We finally provide insights on what’s needed for companies to benefit from each of these opportunities.

Let’s start with a review of the EV value chain and infer on the opportunities for each part of the value chain, and the expected growth potential for each of these for 2020-2030 and beyond.

The inferences for the potential are based on EVNext’s analyses of the trends and the interactions we have had with diverse stakeholders in the industry. These efforts were undertaken as part of our consulting and research activities for the Indian e-mobility sector.

Expected growth of EV value chain components in three periods

L: Low (<10% CAGR); M: Moderate (10-25% CAGR); H: High (>25% CAGR)

Details 2019-2025 2025-2030 >2030
Raw Materials
Lithium, Cobalt, Nickel, Manganese, Graphite L L-M M-H
Sub-components
Anode for Li-ion batteries L M H
Cathode for Li-ion batteries L M H
Separators & Electrolyte for Li-ion batteries L M H
Motor Components L M H
Components
Motors L-M M-H H
Battery cells L-M M-H H
Battery packs L-M M-H H
EV charging station components M M-H H
EV swapping station components M H H
End Products
Electric bicycles L L-M H
Electric scooters M H H
Electric motorbikes L L M
Electric 3 wheelers H M M
Electric cars L L-M M-H
Electric buses M M-H H
Electric LCVs M H H
Machinery
Li-ion battery cell making machinery L M-H H
Li-ion battery pack making machinery M H M
EV motor making machinery M H M
Testing machinery & equipment L M-H H
Services
EV charging station installation M H H
Battery swapping station installation M H H
EV charging station operations M H H
Battery swapping station operations M H H
EV sales & service M H H
Standardisation, testing & validation M H H
Engineering design services M H M
EV financing L-M M H
EV insurance L M H
IT & Software
BMS M H H
Intelligence and analytics for vehicle users L M H
Software  for EV charging stations M H H
Software  for EV swapping stations M H H

Table 1: Expected growth of EV value chain components

Broadly stated, most upstream parts of the value chain (Raw materials, sub-components…) will need to be content with fairly average growth during the 2019-2025 period, while products, solutions and services midstream and downstream can start expecting reasonable business growth starting 2020 as India starts seeing moderate growth in certain end-user segments such as two-wheelers and three-wheelers.

Many businesses are interested in value chain components that are capable of growth in the short term. Components such as battery management systems, or engineering design services, or “light” end products such as scooters or LCVs could indeed show reasonable growth starting 2020, in our analysis. But from among such components with short term growth potential, only a few may offer very large future business opportunities, something that large corporates desire. Many of those components with the potential for a massive future upside could show growth only post 2025.

Does this mean that those keen on entering the upstream part of the value chain need to wait for a few years before making a move? Perhaps not, because investing in upstream parts of the value chain requires more planning, a higher degree of effort for financial closure, a longer time period identifying the right vendors or partners, and finally, a relatively long time to get the plant up and running. A Li-ion battery cell manufacturing facility could take up to one and a half years from planning to commissioning, while an electric scooter assembly facility could be completed within a couple of months!

Characteristics of the Opportunities

Every business opportunity with significant potential will not fit every business. To evaluate the fit of an opportunity for a particular business, it will be valuable to understand how the opportunity ranks on certain parameters.

This section helps you do this evaluation by listing the characteristics of the value chain components on the following:

  • Investments required – Minimum investments needed for this component. This will determine the size of the business opportunities from this component are applicable.
  • B2B or B2C – Is the customer for this value chain component B2B or B2C?
  • Challenges – Key challenges faced by opportunities belonging to this component
  • Competition – Extent of overall competition from within India and global
  • Resources Required for Success – What assets, skills or other resources are needed to benefit from the opportunity?
Value Chain Component Investments Reqd. B2B or B2C Challenges Current Indian Competition Resources required for success
Raw Materials
Lithium Medium B2B Geopolitics, Competition Moderate Mine ownership, trading network ownership, ore refinery setup
Cobalt Medium B2B Geopolitics Low Mine ownership, trading network ownership, ore refinery setup
Nickel Medium B2B Geopolitics, Competition Moderate Mine ownership, trading network ownership, ore refinery setup
Manganese Medium B2B Geopolitics, Competition Moderate Mine ownership, trading network ownership, ore refinery setup
Graphite Medium B2B Geopolitics, Competition Moderate Mine ownership, trading network ownership, ore refinery setup
Sub-Components
Anode for Li-ion batteries Medium B2B Technology Moderate Chemical engineering, Chemical manufacturing unit, Chemical R&D unit
Cathode for Li-ion batteries Medium-Large B2B Technology Low Chemical engineering, Chemical manufacturing unit, Chemical R&D unit
Separators & Electrolyte for Li-ion batteries Medium B2B Technology Moderate Chemical engineering, Chemical manufacturing unit, Chemical R&D unit
Motor components Small-medium B2B Costs, Competition Low-Moderate Electrical engg, Electrical components manufacturing
Components
Motors Small-medium B2B Costs, Competition High Electrical engg., Electrical manufacturing unit, Mechanical manufacturing unit
Battery cells Medium B2B Costs, Technology, Competition Moderate Electrochemistry, Electro chemical mfg unit
Battery packs Small-medium B2B Costs, Competition Moderate Software & IT, Pack assembly unit, embedded software & hardware, IoT
EV charging station components Small B2B Policies, Costs, Technology Low-Moderate Power Electronics, Embedded  Software, EPC, Distributed land ownership, oil & gas retail
EV swapping station components Small-medium B2B Policies, Costs, Technology Low Automation, Software EPC, Power Electronics, embedded  Software, EPC, Distributed land ownership, oil & gas retail
End Products
Electric bicycles Small B2C Costs, Competition, Demand Low-Moderate Electrical & mechanical engg., Production management, Assembly Infra, Retail distribution infra, Existing brand
Electric scooters Small-medium B2C Costs, Competition, Performance Moderate Electrical & mechanical engg, Production management, Assembly Infra, Retail distribution infra, Existing brand
Electric motorbikes Small-medium B2C Costs, Demand, Performance Low Electrical & mechanical engg, Production management, Assembly Infra, Retail distribution infra, Existing brand
Electric 3 wheelers Small-medium B2B & B2C Costs, Competition, Demand, Performance Moderate Electrical & mechanical engg, Production management, Assembly Infra, B2B distribution Infra, Existing brand
Electric cars Medium-Large B2B & B2C Policies, Costs, Demand, Performance Low-Moderate Electrical & mechanical engg, Production management, Assembly Infra, Retail distribution infra, Existing brand
Electric buses Medium-Large B2B Policies, Costs, Demand, Performance Low Electrical & mechanical engg, Production management, Assembly Infra, Existing brand, Servicing infra, B2B distribution
Electric LCVs Small-Medium B2B & B2C Technology, Demand, Performance Low Electrical & mechanical engg, Production management, Assembly Infra, Existing brand, Servicing infra, B2B distribution
Machinery
Li-ion battery cell making machinery Medium B2B Technology, Demand Moderate Machine engg & design, Value added reseller/distributors, Domain expertise for machinery and equipment making, R&D for equipment making
Li-ion battery pack making machinery Medium B2B Technology Moderate Machine engg & design, Value added reseller/distributors, Domain expertise for machinery and equipment making, R&D for equipment making
EV motor making machinery Medium B2B Competition, Demand Low Machine engg, Value added reseller/distributors, Domain expertise for machinery and equipment making, R&D for equipment making
Testing machinery & equipment Medium B2B Demand Low Electrical & electronics engg., Value added reseller/distributors, Domain expertise for testing equipment making, R&D for equipment making
Services
EV charging station installation Small B2B Policies, Technology, Demand, Performance Moderate Electrical engg., EPC & electrical engg expertise
Battery swapping station installation Small B2B Policies, Technology, Demand, Performance Low Mechanical engg., Robotics, EPC expertise
EV charging station operations Small B2C Policies, Costs, Demand, Performance Moderate Electrical engg., Operations & facilities management, O&M expertise
Battery swapping station operations Small B2C Policies, Technology, Demand Low Operations & facilities management, Service station O&M expertise
EV sales & service Small B2C Demand, Performance Moderate Marketing & sales, Retail sales expertise, Availability of  premium retail showroom
Standards, Testing & Validation Medium B2B Policies, Awareness Low Expertise, qualifications and authorizations for providing testing and validation services
Engineering design for EV ecosystem Small-medium B2B Awareness, Lack of expert skills Low Engineering design, Automobile design, Electrical engineering
EV financing Medium B2B & B2C Policies, Demand, Clarity on Performance & Risks Moderate-High Raising capital/finance, Background in the finance/lending industry, Qualifications, approvals and authorizations to provide financial support
EV insurance Medium B2B & B2C Policies, Clarity on Performance & Risks Low Background in the insurance industry, Qualifications, approvals and authorizations to provide insurance support
IT & Software
BMS Small B2B Technology Low-Moderate Power electronics, embedded software & hardware
Intelligence and analytics for vehicle users Small B2B Technology Low Software development, Analytics
Software for charging stations Small B2B Technology Low Software development, Analytics
Software for battery swapping stations Small B2B Technology Low Software development, Analytics

Table 2: Characteristics of the Opportunities

This post is part of a series titled “Strategizing for E-mobility Opportunities in India” from EV Next Perspectives. See all posts for this series from here. See next post EV opportunities for different industry sectors and businesses

The following are the posts in this series:

 

See what we have to say on the EV Business opportunities: Across Sectors & Businesses | Identify the Right opportunity | Evaluating the Opportunities |


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