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The company held its analyst meet on 23 Jan 18 and was addressed by Mr. Inigo Loizaga, Engineering Director CIE Automotive group. The purpose of the meet was to address the investors concern related to Electrical Vehicles and the way ahead
Key Highlights
CIE group is ahead of the curve in terms of developing new technologies for electric vehicles (EVs).
CIE is supplying parts to EV models from Renault, Nissan, Tesla and Mahindra. CIE is supplying parts for battery housing, battery covers, rotor components, etc. These products have been developed using existing CIE technologies such as stamping, plastic, aluminium, forging and machining.
The EV industry is grappling with various uncertainties. There are uncertainties regarding the cost and availability of raw materials for batteries, government grants and investments required for battery manufacturing and charging infrastructure for EV.
Management highlighted the wide variance in forecasts for EV penetration (4.0–15%) and Hybrid EV (HEV) penetration (9.0–35%) in 2025. Mostly, global EV penetration will not cross 7-8% till 2020.
Mahindra CIE (MCIE) gets 24% of revenues from supplying components for power trains for Passenger Vehicles (PVs) and 2Ws in India as well as Europe. There is a risk of MCIE losing some revenue from power train and gearbox components as demand shifts to EVs.
However, management believes the positives from the electrification will outweigh any negatives for the company. Some of the existing casting components that are used in ICE engines can be used as a direct substitute in new power trains
It will be an opportunity for players like MCIE as automakers will likely outsource more of their ICE components to the suppliers like MCIE and put resources behind the development of EVs. Thus , macro trends like increasing outsourcing and vendor base consolidation are expected to further support the business growth going forward.
Opportunities for MCIE to supply parts for inverters, motor controllers, converters, battery modules, and battery cooling and charging ports using the technologies of CIE group remains. MCIE would leverage upon CIE's technology and product portfolio in aluminium and plastics beyond its own expertise in forging, machining and stamping.
Thus overall MCIE is ready for any threat created by EV penetration. In fact it sees its outsourcing opportunities to increase only going forward.
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