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Vehicle electrification (EV transition)
What it is
The shift from internal combustion to battery-electric propulsion, which removes the engine, gearbox, exhaust and fuel system and replaces them with a motor, reducer, battery pack and power electronics
It is the largest single reallocation of value in the automotive supply chain, and it advances at very different speeds by vehicle segment - two- and three-wheelers first, passenger cars next, commercial vehicles and tractors last
Impact on industries
- Removes the most machining-intensive, highest-value components in a vehicle, which is where much of the component industry's profit has sat
- Adds entirely new content - battery packs, motors, power electronics, thermal management, aluminium enclosures - often at higher value per vehicle
- Requalification is not automatic: a supplier approved on an ICE platform must win the EV platform separately, which is when settled positions become contestable
- India's existing vehicle parc is overwhelmingly ICE and slow-replacing, so aftermarket demand persists for a decade after new-vehicle share shifts