All of us may have heard about Elon Musk’s Tesla and how it is contributing to our efforts towards achieving sustainable development. This year, as always, there was a great buzz for electrical vehicles, or EV’s. Now that we are talking about EV’s, let’s analyze its impact on the automobile sector.
The sales of electric vehicles increased by 27 percent between 2016 and 2017. Even in our country, EVs are gaining popularity as Maruti Suzuki and Mahindra&Mahindra recently unveiled their electronic concept cars.
An analysis done by Infosys shows that how EV’s can be the DISRUPTOR of the automobile sector and the automotive supply chain.
With reference to the diagram, Electric vehicles have been rightly proclaimed as disruptor of the automotive ecosystem, which comprises of automakers like Maruti, Toyota, Bajaj etc, dealers like the owners of showrooms from where we buy our cars, bikes, Suppliers which are a link between dealers and automakers , customers like me, you who have bought a car or a bike and finally, the government which establishes safety rules and norms, minimum specifications etc. But, let’s not forget our local mechanic who we approach in case of a puncture or for oiling.
Automakers have realized that many people are now going green and thus they have started planning to manufacture EVs. They are investing more funds towards the development of EV’s. Let’ s take the example of MARUTI, the industry leader. Maruti, recently announced that it will now focus on producing EVs and introduced a new concept. Seeing this, companies like Tata started following Maruti and introduced their very own EV’s such as Nexon, Tigor. It is a great example of identifying and using first mover advantage. As for the dealers, the accumulated inventories of petrol vehicles will increase as people will buy more EVs to take advantage of government subsidies. Thus, the price of petrol vehicles will decrease and stock prices of companies like HONDA ,known specifically for petrol engines will fall.
Moreover companies have also started establishing new R&D wings for electric vehicles creating more jobs in the industry .
THIS IS HOW THE 5 ELEMENTS OF AUTOMOTIVE ECOSYSTEM ARE INTERLINKED AND AFFECTED INTER ALIA BY THE ELECTRIC VEHICLES.
The story of EVs can be exemplified with the help of circular economy.A car part is purchased,gets damaged and then it is dismantled.This dismantled part is reconditioned and then recycled which ultimately results in the building of a new part.Thus,a cycle is formed which makes EV maintainance economical.
TESLA- THE KING OF EVs
Tesla is the prime example of the EV industry. It is the first company which started producing EV’s and is growing rapidly even during the coronavirus pandemic. The company reported strong production even though its California factory suspended operations. It’s Total revenue grew to 5.88 billion.
So, finally my analysis is that EV’s have impacted the industry significantly, but I believe that this is just the beginning, the best is yet to come.