Pushpank Kaushik, CEO of Jassper Shipping, writes for Splash today on electric vehicle adoption in emerging Asia.
The electric mobility wave is not only changing the transportation landscape globally but is also deeply influencing social, environmental, and public health issues in Asia’s emerging economies. India has emerged as the world’s largest market for electric three-wheelers, leading the way in scaling electric vehicle production. With several new giga-factories in development, India is preparing to produce over 1.5 million electric vehicles annually, a significant step towards meeting the growing demand for electric mobility. However, to cater to the burgeoning demand for EVs across South and Southeast Asia, an estimated capital infusion of $1.3 trillion will be essential by 2030.
In May 2024, India’s electric vehicle sales exhibited remarkable growth, soaring by 20.88% to reach 1.39 million units. This surge in sales underscores the immense growth potential available for automotive suppliers and manufacturers within the region. The Indian EV battery market, which was valued at $16.77 billion in 2023, is anticipated to experience significant growth, scaling to $27.7 billion by 2028. In a strong commitment to achieving its goal of 30% electric mobility by the year 2030, the Indian government has enacted measures to boost the sector, including exempting customs duties on machinery imports specifically for lithium-ion battery manufacturing.
India is increasingly solidifying its status as a global sourcing hub for auto components, with substantial exports making up over 25% of the annual production. However, local manufacturers face considerable challenges, relying heavily on imported parts, particularly from China, to produce commercial EV motors, which limits local value addition. The key components necessary for manufacturing these motors, including BLDC motors, rare-earth magnets, and laminated stators, are predominantly sourced from China.
Essential EV components for high-voltage circuits, such as connectors, contactors, relays, and DC-DC converters, are primarily imported due to the significant capital investment needed for local production. China and Taiwan remain the dominant providers in this aspect. As the EV market matures, the significance of high-voltage power electronics grows, particularly systems like battery management systems (BMS), motor control units (MCUs), and vehicle control units (VCUs). Indian manufacturers are further hampered by limited expertise in creating complex electrical systems, making them heavily reliant on Chinese imports for CAN (controller area network) integration and testing.
By FY28, India’s automotive industry is poised to invest a staggering Rs. 58,000 crore (approximately US$ 7 billion) to localize the production of advanced components such as electric motors and automatic transmissions. This strategic investment aims to decrease dependency on imports while tapping into the ‘China Plus One’ trend, enhancing resilience in the supply chain. India’s competitive manufacturing base, with production costs that are 10-25% lower than those in Europe and Latin America, significantly bolsters its appeal as a global hub for auto component sourcing. The country’s strategic location, adjacent to major markets including ASEAN, Europe, Japan, and Korea, further enhances its potential for growth.
Shipping’s role in the EV future
The burgeoning electric vehicle (EV) market throughout Asia, particularly in India, emphasizes the critical role shipping plays in the import and export of essential components. The increasing demand for EVs is expected to fuel a robust sector across the region, even in the face of rising global trade barriers. Asia’s pivotal role in supplying battery components underscores the logistical challenges associated with transporting these materials not only within the region but also to critical markets in Europe and the United States. Businesses are grappling with various obstacles, including limited supply chain visibility, vulnerability to disruptions, and an escalating demand for sustainable logistics solutions.
As the global EV market is projected to expand ninefold, facilitating a seamless flow of components is indispensable. Shipping companies that leverage advanced logistics solutions—such as enhanced visibility through digital connectivity, flexible multimodal transport options, and a robust global network combined with strategic warehousing—will be key players in successfully meeting the demands of this dynamic market.
**Interview with Pushpank Kaushik, CEO of Jassper Shipping: The Future of Electric Vehicle Adoption in Emerging Asia**
**Editor:** Thank you for joining us today, Pushpank. Your recent article on electric vehicle adoption in emerging Asia raised some crucial points. Can you share your insights on why electric mobility is becoming such a pivotal issue in India and other emerging economies?
**Pushpank Kaushik:** Thank you for having me. The rise of electric mobility is revolutionary, especially in emerging economies like India, where the transportation landscape is rapidly evolving. Not only does it promise reduced carbon emissions, but it also addresses social and public health challenges. With India’s position as the largest market for electric three-wheelers, we’re witnessing a paradigm shift in how people think about transportation.
**Editor:** You mentioned India’s significant growth in electric vehicle sales, with a remarkable increase of 20.88% recently. What do you think are the primary factors driving this surge?
**Pushpank Kaushik:** The growth in sales can be attributed to several factors. Government initiatives, such as the exemption of customs duties for lithium-ion battery manufacturing, are incentivizing local production. Furthermore, the increasing awareness of environmental issues and rising fuel prices make electric vehicles a more attractive option for consumers. As more manufacturers enter the market, we’re also seeing advancements in technology and reduced costs, making EVs more accessible.
**Editor:** You highlighted a substantial capital infusion of $1.3 trillion needed by 2030 to meet the demand for electric vehicles in South and Southeast Asia. How do you see the financing landscape evolving to meet these needs?
**Pushpank Kaushik:** That’s a crucial question. The investment required is immense, and it will necessitate collaboration between the public and private sectors. International investors are increasingly interested in the renewable mobility sector in Asia, and we’re likely to see more government incentives to stimulate investments in EV infrastructure, manufacturing, and R&D. Accessibility to funds will be key in propelling this transition.
**Editor:** Speaking of manufacturing, you mentioned India’s reliance on imported parts, particularly from China. How does this impact local manufacturers?
**Pushpank Kaushik:** The dependency on imports, especially for critical components like electric motor parts and high-voltage circuitry, poses significant challenges for local manufacturers. While India is developing a strong global sourcing hub, local firms struggle with the production of complex systems due to limited expertise and the high capital investment required for domestic manufacturing. There’s a need for greater investment in skill development and technology transfer to enhance local capabilities.
**Editor:** Looking ahead, what steps do you think are essential for India to maintain its momentum in the electric vehicle sector?
**Pushpank Kaushik:** Continued government support will be vital, particularly in creating policies that promote local manufacturing and research. Investing in technology education and bridging the skills gap is also crucial. Lastly, fostering partnerships between auto manufacturers, tech companies, and financial institutions will help accelerate the development and deployment of EV technologies in India and the region.
**Editor:** Thank you for your insights, Pushpank. It seems that while challenges remain, the potential for electric mobility in Asia’s emerging markets is enormous.
**Pushpank Kaushik:** Absolutely. It’s an exciting time for the EV sector, and with strategic efforts, we can make significant strides toward sustainable transportation. Thank you for having me.
