In a major shift towards sustainable transportation, the penetration of commercial electric vehicles (EVs) has as reached as much as 50 percent in some of the major Indian metropolitan cities, according to Euler Motors, a leading cargo EV maker in the country.
This suggests that EV adoption for commercial purposes has gained significant momentum in cities like Delhi-NCR, Mumbai, Bengaluru (Bangalore), Hyderabad, and Chennai, signaling a growing interest among businesses to reduce dependency on fossil fuels and reduce their carbon footprint. Speaking to Digitimes Asia recently, Gaurav Kumar, head of supply chain & manufacturing at Euler Motors, added that the company is prepared to ramp up its sales and meet the rising demand.
"When considering the electric vehicle market, it is clear that the commercial segment has seen significant growth in the past 36 months, with a 50 percent penetration rate," Kumar said. "Notably, the three-wheeler cargo segment in urban areas like Delhi, Bangalore, and Hyderabad has seen substantial progress towards electrification. In Delhi, for example, 50 percent of this segment is already electrified, with Hyderabad and Bangalore following closely behind at 20-30 percent. Euler Motors has already sold more than 1,500 vehicles and aims to sell over 4,000 in the next six months, anticipating 7x to 8x growth in the coming months."
Securing the supply chain
The success of any EV company depends heavily on its ability to secure a reliable and efficient supply chain. With the current surge in demand, companies must ensure they can meet customer requirements by maintaining a steady supply of raw materials, components, and finished products.
"As a company building electric vehicles for the Indian market, we source over 600 components from more than 350 suppliers in India," Kumar said. "Our focus on localization has helped to source 90 percent of the components from within the country, with the remaining 10 percent procured from overseas suppliers. While we aim to source everything locally, certain components like cells and semiconductors are still being imported due to the lack of maturity in the domestic industry."
But having a supply chain in place alone doesn't solve the problem. OEMs must take steps to ensure the quality and reliability of the components being supplied.
"To ensure a reliable supply chain for the two crucial components of electric vehicles - electronics and batteries - we have established a robust network of suppliers," Kumar said. "While we source the cells for our batteries from different countries, we have built strong in-house research and development capabilities to assemble them. However, when we started, this supply chain was not yet established. We worked closely with our suppliers, transferring knowledge of the manufacturing process to ensure quality control. Through this collaborative approach from the beginning, we were able to develop a reliable supply chain."
Innovating with the supply chain partners
Euler has specific supplier selection and management processes to ensure a reliable supply of materials and competence. Kumar pointed out that their strategy toward this is two-pronged.
"To ensure that the general components used in mass production meet our high standards, we have established internal supplier evaluation metrics," Kumar said. "These metrics evaluate several aspects, including the quality of the incoming materials, manufacturing processes, packaging procedures, and delivery timelines. In addition to these metrics, we also consider the financial stability of our suppliers and their track record in the market. We analyze the type of components they supply to other original equipment manufacturers (OEMs) and their relationship with those OEMs."
Prepping for supply chain constraints
No company has been able to remain completely shielded from the supply chain constraints that plagued the world after COVID-19. But different businesses have come up with different strategies to overcome this challenge. For Euler, this means having firm control over the design aspects.
"We develop our electronics and have an in-house software and embedded team to design and develop various components such as motor controllers, BMS, instrument clusters, etc.," Kumar said. "We work with IC partners who supply the necessary components and assembly partners who handle assembly. Since we handle the design of the product in-house, we can easily replace components that may be in short supply with suitable alternatives to avoid any potential shortages."
Another approach the company has taken has been to place orders well in advance. The components for the vehicles that Euler plans to sell this year were ordered about two years ago to ensure no shortage when they scale up.
The increasing penetration of commercial EVs in major Indian metropolitan cities is a significant shift towards sustainable transportation. The adoption of EVs for commercial purposes has gained momentum, with a 50 percent penetration rate in some cities, signaling growing interest among businesses to reduce their carbon footprint.
Euler Motors, a leading commercial EV maker in the country, has already sold more than 1,500 vehicles and aims to sell over 4,000 in the next six months, anticipating significant growth in the coming months. The company sources 90 percent of its components locally and has implemented strategies to overcome supply chain constraints, including placing orders well in advance and designing components in-house to replace any shortages.