Flash Electronics aims to double revenue to Rs 2,600 crore by 2025, eyes 30 percent of its business from EV parts

Riding on the soaring demand for green mobility, homegrown electric and electronic automotive systems and parts maker Flash Electronics intends to double its net revenue to about Rs 2,600 crore and plans to garner close to a third of its total business from the global electric vehicle parts business by 2025. 

To cater to the growing EV business, Flash Electronics will be setting up two greenfield facilities and a tech centre to develop future EV solutions.

In the last six years, the company's revenue has grown at a compound annual growth rate (CAGR) of 20 percent and it is targeting to clock Rs 1,200 - 1,300 revenue in the financial year 2022-2023 with EVs contributing eight to nine percent to the overall turnover. 

According to senior company executives, the Pune-based auto component manufacturer has seen a strong start in the first half of FY23, with high levels of customer demand including strong orders for traction motors and controllers for their relatively new segments of electric passenger cars and commercial vehicles (CVs). 

Flash Electronics’ Partners
The company, which predominantly caters to only two-wheeler and three-wheeler EVs, entered the electric passenger vehicle and commercial vehicle segments in India with the recent technical collaboration with Poland-based Elimen Group. 

Sanjeev Vasdev, Managing Director, Flash Electronics

“From a one percent share seven years ago, our EV parts business currently earns eight to nine percent of our total revenue. Flash has the widest portfolio of electric motors, converters for electric two and three wheelers. And with the recent partnership we are now expanding our traction motor and controller range to e-cars and CVs. In the next two years, we will be concentrating on providing a complete value chain for our EV customers which will not only double our revenue but also enhance our green mobility share to 30 percent,” Sanjeev Vasdev, Managing Director, Flash Electronics, told Autocar Professional.

Under this partnership, the company aims to make India a global manufacturing hub for its traction motors and controllers for all EV verticals, ranging from two-wheelers, three-wheelers to passenger and commercial vehicles, including electric buses with up to 300 kW applications.

“I feel no one in India is supplying parts to this wide range of two-wheelers to buses at present,” Vasdev noted. Prior to this, Flash also tied-up with France-based Enerstone and Italian electric scooter maker Askoll in 2020 for Battery Management System (BMS) and EV parts respectively. 

The company outlined that it has adapted to the current and ongoing significant supply chain and inflationary challenges which have developed during FY22 and continues to monitor developments closely, “taking a proactive approach to addressing issues as they emerge.”

Investments & Expansion
In a bid to drive product innovations, Flash is looking to invest Rs 150 crore for the next two years in establishing one tech centre and setting up new plants in the Pune region. The company is spending about Rs 50 crore for setting up a green mobility tech centre which will be operational by March 2023. As per Vasdev, this facility will enhance the company’s in-house research and development capabilities for the future mobility products. 

“For us, green mobility is going to be a big business for the future and upcoming fresh investments will mainly happen in this domain. We are establishing this tech centre to keep up pace with the development so that we have enough resources for the production at the required time,” he added. 

The remaining Rs 100 crore will be spent on setting up two greenfield plants. As the company is expanding its product portfolio, it is planning to shift the current conventional two-wheeler products to the new plant, while the existing facility will be dedicated only to electric two-wheelers. 

It is also planning to make another upcoming plant a dedicated facility for e-car parts where the company is diversifying actively. Flash has already started developing a full drivetrain solution for electric PVs and CVs. According to the company's Chief Financial Officer Sanjay Deshpande, the company has recently signed a technical agreement with a European company to produce drivetrain assembly on a case-to-case basis for the domestic market. 

“One very critical drivetrain component was missing from our portfolio which is the differential assembly for PVs and CVs. We have recently partnered with a leading European company where Flash will be engaged in manufacturing and our partner will be supporting the complete design of the differential,” Deshpande said. 

When asked about the launch timeline, the CFO said that such products need a minimum two years of research and development before they actually go into production. “Our plan is to start the production of differential assembly by the end of 2024 or early 2025,” Deshpande added. 

At present, the company has a total of six manufacturing facilities, four in Pune and one each in Germany and Hungry. One historical plant is also present in Faridabad where the company is not doing much expansion. However, company executives hinted that they are looking to expand their presence in the Delhi/NCR region in the coming years for some of their EV customers.

“We are also looking at setting up a facility in the Delhi/NCR region for EVs but it is not defined yet. In the auto industry you always move next to the customer. So, whether it will be a full-fledged plant or a satellite plant, it will all depend on the customer,” Vasdev said. 

Future Plans and focus areas
As countries target net-zero carbon emissions and gas prices rise, demand for EVs has surged significantly despite supply chain bottlenecks and rising costs of components and battery materials. Flash electronics is not only scouting for new product avenues for EV parts business expansion but also keen to explore other verticals of future mobility such as hydrogen. 

Highlighting his aspirations of becoming a leading component supplier on the electromobility front Vasdev explained “We are not stopping at just the current range of products and the collaborations that we have signed for EVs. We are also in an advanced stage of talks with a few other companies where we will be looking at getting deeper into artificial intelligence (AI), telematics and a few other lines.” 

On the AI and telematics side, Flash Electronics is looking at very specific technologies which are currently not available in the country. “We strongly feel that these technologies will be needed in the future. So, we are exploring global partnerships to enhance our capabilities in this area,” he added. 

Flash Electronics supplies components to Bajaj Auto, India Yamaha Motor, Suzuki Motorcycle India and Jawa Motorcycles, among others. Globally, it has among its clients BMW, Harley-Davidson Motor Company, Ducati Motor Holding and Triumph.

Moreover, the definition of green mobility doesn’t end at EVs, rather the company has already started doing prototyping for some of its European customers for hydrogen-related motors and controllers. In between prototyping processes, the company will also launch small pilots in 2023 and 2024. “As hydrogen is still a new emerging ecosystem and its related products require tremendous validation and testing which normally takes two or three years,” Vasdev said.