Dana reworks strategy to adapt to the evolving automotive landscape in India

Saket Sapra, MD, Dana TM4 India and head of Electrification, India and Southeast Asia tells Autocar Professional, that the company's growth in India is energy agnostic. 

By Chandan B Mallik calendar 12 Jun 2024 Views icon4848 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Dana reworks strategy to adapt to the evolving automotive landscape in India

With its strong core competencies, Dana TM4 India seems well-prepared to navigate the evolving landscape of the automotive industry in India, where both internal combustion engine (ICE) vehicles and electric vehicles (EVs) are expected to co-exist for the foreseeable future. Here's how their business strategy addresses various aspects of this transition.

It seems that there is some agreement within the automotive ecosystem (Indian market) that both ICE and EVs will co-exist for a few more years. How does that impact your business? 

Yes, ICE and EVs will co-exist for at least the next 10 to 15 years. However, the high EV growth trajectory as evidenced by EV sales crossing 211,000 units in March 2024 will continue. If the government initiatives continue as today, the EV market will evolve very rapidly in the short and medium term for electric 2- and 3-wheelers, buses and the small and light commercial vehicle segments, as evidenced by the segment wise penetration today. Within the last three to four years, e2W penetration has been at 5.39 %, 3W passenger at 55.8%, 3W cargo at 44.6 %, passenger vehicles 2.3 %, and buses at 5.8 %. 

The hybrid market will remain largely limited to passenger cars, while CNG vehicles will also co-exist in the short and medium term. Medium and heavy-duty trucks segment may witness adoption of Fuel Cell (FCEV) and Hydrogen ICE technology along with pure battery electric vehicles (BEV). 

How does that impact your business?  

As FCEV and BEV will both use electric power trains, Dana TM4 considers this as a tailwind for future growth. Presently, we manufacture traction motors, motor controllers and vehicle control units for various segments such as premium bikes, 3 wheelers, buses, trucks, and off-highway segments such as boom lifts, scissor lifts, mini-excavators, lawn mowers etc, for India and the global market. All these are rapidly growing segments.

Our companies in India and globally are energy agnostic as we have a large portfolio of drive train products for ICE and EVs. Dana is also a market leader in the supply of components for hydrogen fuel cell vehicles, globally. 

With EVs in various categories gaining traction, how do you address the demand for permanent magnet motors, controllers etc? 

Dana has globally invested about USD 369 million in 2023 on R&D, has over 50 years of electrification experience, and over 3.9 billion customer miles driven on Dana motors and inverters. All this experience and investment benefits our customers, as we bring in the latest technologies and processes available globally to meet our local customers’ needs.

Many of our customers need to meet the FAME as well as Production Linked Incentive Scheme (PLI) conditions; so, we have already made major investments and localised various permanent magnet motors and controllers in India over the last 3 years in our state-of-art manufacturing facility in Chakan. 

As of today, rare earth permanent magnets and some electronic components are imported, however other higher value components are localised in India, enabling higher localisation content compared to competition.   

Is that enough for profitable growth?

Yes, considering we cater to both the growing domestic and export markets from India, for both the on-highway and off-highway segments. We are also working on localising additional products like e-axles and transmissions, technologically advanced motors for a wide variety of segments including medium and heavy-duty trucks, silicon carbide inverters which meet functional safety, FOTA and diagnostics requirements which would further improve system efficiency and industry compliance.

What are the challenges in reducing costs for EV products?

Reducing costs for electric vehicles (EVs) in India presents several complex challenges that require a multifaceted approach.

  • Policy consistency and clarity: Ensuring consistency and clarity in government policies regarding subsidies, tax incentives, and schemes for EVs is crucial. Streamlining application processes, simplifying requirements and ensuring more regular and timely payouts can encourage more companies to invest in EV manufacturing and boost demand.
  • Battery costs: Despite significant reductions in battery prices, they still constitute a substantial portion of the total vehicle cost. Encouraging cell manufacturing within India with realistic technology requirements and value addition norms, and incentives for investments in research for new battery technologies suitable for India.
  • Electronic components localisation: Manufacturing in India will lead to cost reductions and costly imports. Tier 2 supplier capabilities and skills need to be worked upon.  Lowering import duties on these components in the interim can also alleviate cost pressures. 
  • Skill gap: Addressing the massive skill gap for service personnel, product engineering, and manufacturing is essential. Investing in skill development programmes and promoting frugal design engineering is needed.
  • Rare earth metal dependency: Dependency on rare earth metals for magnets poses a challenge. Exploring alternative materials, reduced and no rare earth magnet motors and fostering partnerships with high-quality local suppliers can mitigate supply chain risks. 

How does your R&D help you deliver customised solutions to OEMs as India is known to be a price sensitive market? 

For customers, total cost of ownership (TCO) is important. As a premier provider of traditional and electrified driveline products and systems, we help OEMs and end-market customers achieve the best weight, performance, and efficiency, as well as lowest cost of ownership with our designs, no matter the powertrain configuration.

Dana has proven global technology products which are manufactured in multiple Dana plants (including India) offering OEMs global support. All Dana EV products are modular and can be customised as per OEM requirements.  As many of our products are already localised, customisation is cost effective for OEMs.

What do you think the impact of the government’s new EV policy will have on the ecosystem? 

The government’s EV policy will have a significant impact on the Indian ecosystem. With increased adoption of electric vehicles, there will be reduced greenhouse gas emissions (much needed in India with highly polluted cities), there will be lower dependency on fossil fuels reducing India’s import bill (money which can then be channelled to other development focussed programs), boost the domestic manufacturing sector while attracting global players into the Indian market. This in turn will also attract investments in various EV and offshoot technologies and services, provide a boost to the start-up ecosystem and in general create new jobs for all segments of the society.

Make in India–where are you on this aspect? 

Dana India has already localised various IPM motors, controllers, e-axles in India over the last 3 years.  Our low voltage motors have over 70% localisation by value, with primarily rare earth permanent magnets and some electronics within our temperature sensors and encoders being imported.  For our high voltage motors, apart from rare earth magnets, resolvers and certain consumables, all other components are localised achieving close to 70% local content.  For our inverters, IGBTs, laminated bus bars, capacitors are primarily imported. In general, we achieve higher localisation content compared to our competitors. In addition to “Make in India”, at Dana we are also making strides towards design and test in India. We understand that several high-performance permanent magnets, such as neodymium-iron-boron (NdFeB), require rare earth elements, which can be expensive and subject to price fluctuations. This can affect the overall cost of the motor, making it less economically viable in some applications.

What elements can offset uncertainties? 

We see significant advantages in power-to-weight ratio and efficiency in permanent magnet motors, making these motors the first choice of major OEMs. However, as pointed out, this does create some supply chain challenges.

Dana has a vast toolbox of motor technologies to choose from and recommend the appropriate motor technology based on customer application requirements, with the goal to provide cost-effective motor designs optimised for the application. Dana’s existing technologies range from reduced rare earth magnets to no rare earth magnets to no magnets.  In fact, our existing Sumo MD series motors for buses in India are with 'permanent magnet variable reluctance' technology i.e. a kind of hybrid motor with reduced magnet content. Under the magnet free category, Dana has different motor technologies like induction motors, synchronous reluctance motor, to eliminate dependency on magnets and we continue to work on improving the efficiency and performance of these technologies. 

What innovative technologies for EVs have you developed or are developing? 

Dana TM4 India is actively developing innovative technologies for EVs, including reduced magnet and magnet-free motor technologies, e-axles, e-transmissions, e-torque hub drives, and e-power take-off solutions, to name a few. We are also focusing on advanced cooling technologies such as direct oil immersion cooling and e-fluid immersion cooling technologies for motors to improve torque and power density. Our silicon carbide inverters meeting ISO 26262 with ASIL D, to improve system efficiency and compliance with industry standards, will be launched shortly.

This interview was first published in Autocar Professional's June 1, 2024 issue.

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