Indigenous supply chain for Automotives is key to reduce costs, build to specific requirements and in the long run, innovate / disrupt based on the subject knowledge gained, to sell to the world. Looking at ICE vehicle supply chain, the localization story started in 1920’s with Bosch’s entry to India followed by a rigorous push by government for the next 60 years through various failed policies and sporadic demand.
Finally, sunrise of the industry happened around 1991 with a policy revamp where fully imported cars were taxed at 125% while imported equipment were taxed at 10%, pushing companies to establish assembly in India thus creating a structure for auto components industry to thrive. With continuous push for import substitution to meeting the durability and cost requirements of Indian consumers — the auto components industry began to flourish. Today localization in ICE industry is on average close to 90% in all vehicle segments and 100% for Indian dominated segments like two wheelers and tractors.
Compare this to the EV industry where localization was nonexistent before 2019 –crowded with CKD kits imports — to EV companies scrambling overnight to meet FAME subsidy requirements of localization of all other EV components given 100% import dependence for cells by India.
Now, even after almost 4 years of FAME subsidy implementation, only 50% of the total vehicles sold of applicable categories are under FAME. The remainder 50% of the vehicles are not eligible as they mostly don’t meet localization requirement. Recently, the government has cancelled FAME 2 subsidy eligibility of OEM’s who in realty don’t meet the localization. Despite of a large auto components industry for ICE, India does not have a supply chain for even the basic components of EV’s. This is leading to integration , using off-the-shelf imported components not suitable for Indian conditions. The existing electrical components supply chain for other industries do not meet mobility requirements — i.e electric motors used in other industrial machinery, wire harnesses etc. This leaves white space for component suppliers in the EV value chain of the soon to be 3rd largest automotive market in the world.
As part of Capital A’s thesis to support players helping in the localization of EV supply chain, we are glad to support Entuple E Mobility — an electric powertrain and turbo e-charger company based out of Bangalore. Led by Rakesh Mishra and Tijo Thomas, Entuple aims to be the go-to components supplier for EV’s built in India and supplied to the world.
Currently, Entuple is concentrating on designing the most critical powertrain equipment — the electrical motor and controller — for all vehicle types. Entuple’s motors are designed to meet requirements of Indian road conditions and adapt to rider requirements with controllers enabled to learn and perform through on the edge compute. The products are designed to be integrated with the suite of smart components of EV’s thus enabling the OEM’s flexibility for over the air updates and preventive maintenance requirements. The motors give better efficiency leading to higher range of vehicles compared to their Chinese counterparts at lower cost. The founding team comes with experience in building mission critical components and technologies for defense and aerospace industries which they seek to apply to develop next generation proprietary products for the EV industry.
We at Capital A are constantly looking for increasing our knowledge in these areas. If you are an operator, founder, investor or enthusiast in the EV space — we would love to chat. Please reach out to snehitha@capital-a.in, sarath@capital-a.in.
