Knowledge HubWhat Makes Up The Entire EV Ecosystem?

Focusing on the EV ecosystem will be more beneficial rather than focusing on auto companies.


Charge up and gear up – it's time to explore the exciting world of EVs or electric vehicles!

Electric vehicles are no longer a thing of the future. They're here. And they're here to stay.

From charging infrastructure companies to component manufacturers, the electric vehicle ecosystem is a complex and rapidly evolving landscape.

In this blog, we'll take a deep dive into the ins and outs of the electric vehicle world, the technology, and explore the opportunities and challenges ahead.

The important thing here is to focus on the EV value chain and not just pure play auto stocks making electric cars.

That's because auto companies are juggling too many balls in the air right now. 

By taking a closer look at what makes electric cars truly one of the most disruptive forces, you could find some wealth creating opportunities along the way.

So, here we go…


Charging infrastructure: crucial part of the EV ecosystem

Believe us when we say that charging infrastructure is a crucial aspect of the entire electric vehicle ecosystem. It is set to grow exponentially as the number of electric cars on the road increases.

This infrastructure includes both public and private charging stations and enables EV owners to charge their vehicles at convenient locations, such as at home, at work, and while out and about.

Without a sufficient charging infrastructure in place, it would be difficult for people to own and operate EVs, as they would have limited options for recharging their vehicles' batteries.

Many Indian companies have opted to foray into this space recently. For instance, real estate companies are setting up EV charging points along with their home offerings. Even textile companies having spare manufacturing plots have opted to make some components.

In our view, the biggest beneficiaries are Tata Power and ABB India. These companies are changing the game and coming up with new ways to introduce innovative products.

Additionally, all the charging infrastructure companies also play a vital role in the government and private sector initiatives to encourage EV adoption.

In order for the electric vehicle ecosystem to thrive, it is important that sufficient charging infrastructure is in place.


Chemical companies and the EV ecosystem

Chemical companies supply many of the materials and chemicals that are used in the production of EV components, such as batteries, electric motors, and charging infrastructure.

One of the key areas where chemical companies are involved in the EV ecosystem is in the production of battery materials. Batteries are a critical component of EVs, as they store the electrical energy that powers the vehicle.

Many different chemicals are used in the production of EV batteries, including lithium, cobalt, nickel, and graphite, which are typically sourced from chemical companies.

Chemical companies also play a role in the production of EV components other than batteries. For example, they produce the raw materials that are used to make the electric motor, such as copper and neodymium, which are used to make the magnets.

They also produce materials that go into the production of the charging infrastructure, such as the conductive materials used in the charging cables and terminals.

In addition, chemical companies play an important role in recycling end of life batteries.

From the listed space, Balaji Amines, Fiem Industries, Gujarat Fluorochemicals and Tatva Chintan Pharma could be the biggest beneficiaries.


EV batteries – the heart of electric vehicles

Without battery OEMs or battery makers, EVs would not be able to function, making them a critical part of the ecosystem.

These batteries are made up of a combination of materials such as lithium, cobalt, nickel, and graphite which are sourced from chemical companies. Battery makers take these raw materials and produce the battery cells, packs and modules.

As the demand for EVs continues to grow, battery manufacturers are working to improve the energy density, safety, and overall performance of their batteries. This includes investing in research and development to improve the energy density and safety of their batteries, as well as reduce the cost.

Battery manufacturers also play a vital role in the recycling of batteries.

From the entire EV ecosystem, battery makers present the most promising opportunity as the cost has come down drastically. It is expected to come down even more in the coming years!

Two listed companies which capture most of the market share are Amara Raja Batteries and Exide Industries. But apart from these two, a small company Kabra Extrusion has forayed in this space by acquiring stake in battery startup.

These companies are at the forefront of innovation at the moment and making heavy investments into new and upcoming battery technologies.


EV component manufacturers: adopting to newer technology and digitization

Do you remember when smartphones disrupted landlines? It was not a matter of calling from anywhere or talking on the go for that matter.

Smartphones became integral consumer devices. Be it music, information, travel, eating habits, or shopping – they completely changed our lives. The mobile phone revolution was beyond what anyone could have imagined.

This particular segment of the EV ecosystem is going through a similar revolution.

EV component manufacturers or auto ancillary companies are adopting technology and digitization.

They are focusing on advanced engineering through embedded software systems, telematics, connectivity, wiring harness design and making light weight products.

From the entire auto ancillary landscape, the companies which have an agonistic EV portfolio include Minda Corporation, Minda Industries, Gabriel India and Sona Comstar.


Software companies providing technology

The EV revolution is coming along with an IoT revolution. It will piggyback on technologies such as sensors, vehicle control, cloud computing, embedded software, data processing, and analytics.

The two Indian companies providing technology for the EV landscape include Tata Elxsi and KPIT Technologies.

One of the key areas where these software companies are involved is in the development of the software and control systems that are used to manage the powertrain, battery, and other systems in an EV.

These systems ensure that the various components of the EV are working together effectively, and that the vehicle is performing efficiently.

Additionally, software companies play a big role in the development of fleet management and telematics software, which enables fleet owners to monitor and optimize the performance of their EVs and allows them to charge and schedule maintenance more effectively.


To conclude

The growth of the EV market is also creating jobs, both in manufacturing and in the infrastructure segments.

It will help create a cleaner and sustainable environment.

With the help of these companies working together to make EVs more accessible, convenient and affordable, we will continue to see a rapid growth in EV adoption.

Little do we wonder as to why India is paving the way for EVs and focusing on reaching a high level of EV adoption by 2030.

Jhaveri Securities has a strong research team that is well qualifies to do a research on emerging trends. Connect to any of our research team members to gain insights on industry or companies. 

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