Auto companies are using more aluminium for transit to EVs, Bharat Forge too gears up

The global automotive industry is countering a lot of disarrays, counting stricter regulations on emissions steering automakers to switch to the electric vehicle segment.

India’s leading manufacturer and exporter of auto components, stated in its annual report: “2021 will be the year electric vehicles (EVs) will take centre-stage.”

According to Million Insights, a California-headquartered market research firm said in May’20: “The EV market is expected to be valued at over $1.2 trillion by 2027. The growth can be imputed to the number of government initiatives across the globe to promote the adoption and manufacturing of EVs.”

While according to International Energy Agency (IEA) in its annual global EV outlook report, released in April 2021, said: “The global electric vehicle stock (excluding two/three-wheelers) will reach nearly 145 million vehicles and will account for 7% of the global vehicle fleet by 2030.”

“A lot of countries around the world, particularly in Europe, are giving incentives to automakers to produce EVs. This, in addition to the competition to grab the new market, is expected to push the EV sales in the coming years. 18 of the 20 largest OEMs have committed to increasing the offer and sales of EVs,” IEA had added in its April report.

Bharat Forge in its annual report quoted an independent study by the CEEW Centre for Energy Finance (CEEW-CEF), which is an initiative of the Council on Energy, Environment and Water (CEEW), one of Asia’s leading think-tanks.

The study indicates that the EV market in Indian is predicted to be a $206 billion opportunity by 2030. The projection incorporates sales of battery EVs (BEVs), plug-in hybrid EVs (PHEVs), retrofitting of old internal combustion engine (ICE) vehicles as well as the charging infrastructure.

Independently, Bharat Forge disclosed that the India Energy Storage Alliance (IESA) expects EV sales to grow at a compound annual growth rate (CAGR) of 44% between 2020 and 2027, to hit 6.34 million units, primarily led by two-wheelers and three-wheelers.

Since 2016 the stress on electric mobility has been on the rise for Bharat Forge, the producers of vital components for the auto industry and then it develops a separate vertical and customaries a formal e-mobility strategy.

Baba N Kalyani, Chairman and Managing Director of Bharat Forge, said: “A part of our business is exposed to this shift and may come under stress in the medium term. The company predicts a hit of 10 to 12% to its business in the medium- to long-term if there is a total shift from the internal combustion engine.”

“The e-mobility business and other verticals we are focusing on will more than makeup for this loss of revenues," Kalyani added.

“Bharat Forge is now gearing up for the era of electric vehicles. We are focused on becoming a future-ready enterprise that is more digital, more competitive and more evolved,” said Kalyani.

The auto components company has been working on e-mobility and lightweight auto components for the past few years. It envisions the demand for it to rise, as worldwide EV production escalates in coming years.

The automotive companies are utilizing more aluminium and other lightweight materials as they transit to EVs, while Bharat Forge has set up a Centre for Light-weighting Technologies (CLWT) facility in Nellore, Andhra Pradesh to manufacture lighter aluminium or magnesium composites from traditional heavier steel subsystems.

The company created a separate subsidiary for its e-mobility business, Kalyani Powertrain, besides investing in EV start-ups in India and Europe. The plan is to grab a 5-6% market share in the segment, by 2025, by manufacturing electric vehicles in the two and three-wheelers and commercial vehicles segment.

“Another challenge is to create a talent pool with completely new skill sets and intensifying research and innovation”, said Kalyani.

Shifting to EV, Bharat Forge is training its employees to be competent in skills needed to develop new technologies through internal training programmes and external collaborations with institutes to facilitate skill development, management development, and technology development.