Interested to know about the developing trend of Electric Vehicles in India and sectors likely to be bolstered by this shift in the automobile industry? Read the series of our articles on the Electric Vehicle Value Chain.
India’s automobile industry is the 5th largest industry in the world. On account of progress in the automobile sector in India, it can procure 2nd or 3rd position by the year 2030. The focus of making this industry the largest in the world is also largely promoted by the Government. The government is also concentrating a lot on EVs in India. Union Minister Nitin Gadkari has also presented a target of the presence of 30% EVs out of total vehicles in India by 2030. Electric Vehicles are getting higher attention nowadays as they are environment-friendly vehicles.
Currently, 42% cost of EVs owes to their battery, which is also responsible for the high pricing of EVs. EV makers are projecting out certain alternatives, setting up research on Lithium batteries which is the prime component of EVs. As per projections, the cost of EVs can go down by 18%, if more resources are developed or any other steps wents successful.
Another major problem here is Electric vehicles cost 1.5 times to 3 times the upfront cost than petrol or diesel vehicles. This concern can also be sorted out in the coming 4-5 years, with the development of EVs in the market. The cost of EVs and IC engine vehicles can lie in the same ranges by 2025.
Sectors in Electric Vehicle Value Chain:
i) Mining Sector
ii) Sales and Component Sector
iii) Battery Parts
Specifically in this blog, we will be discussing the Mining Sector the Electric Vehicle Value Chain. Under this sector, we will take the National Aluminum Company (NALCO) for our study.
Role of NALCO in Electric Vehicle Value Chain:
ABC acronyms for Argentina, Bolivia, and Chile. These ABC regions have almost 54% Lithium reserves of the world.
Concerns regarding NALCO:
Looking around the emerging market of EVs and considering the growth possibility of EVs in the automobile sector, companies in relation with mining, manufacturing, and marketing of Lithium and Lithium-ion batteries seem to be get benefited and bloom in the coming time-period.
Under the first sector of our Electric Vehicle Value Chain, we have chosen NALCO as our first company which can work well in the upcoming EVs era. As of now, NALCO suffers because of its poor return ratios but it can be transformed once its projects and strategic joint ventures are successful. Keeping this prospect in mind, one should keep this stock on their radar.