For India's Auto Component Makers, ICE vs EV is not the Biggest Question

India's auto component makers are constantly asked whether they are ready for the shift to electric vehicles. But a new report from Boston Consulting Group and the Automotive Component Manufacturers Association of India suggests that is not the question keeping most leadership teams awake at night.

"While it's a top 10 dilemma, it's actually interestingly not one of the top three or four questions that came up right now," said Saurabh Chhajer, managing director and partner at BCG India. In a survey of more than 50 companies behind the study, only 21% said they were actively weighing how to split investment between ICE and EV, well behind automating versus deepening existing teams, cited by half the respondents, and investing ahead of demand versus waiting, cited by 45%.

The reason, Chhajer explained, is that the EV question depends heavily on what a supplier actually makes. Some components are powertrain agnostic and fit both ICE and EV vehicles, so the real task is qualifying into new customer programmes. Others are tied closely to combustion engines and require an entirely new EV portfolio, while some suppliers are already EV specific. "That question gets very contextualized very quickly at a company level," he noted.

India's position gives suppliers room to manage the shift gradually rather than pick a side, the report argues. The country has a large, growing ICE market and a fast-expanding EV market at once, a combination BCG calls rare globally. Indian suppliers, it adds, are well placed to become a significant manufacturing base for ICE components as other markets pull back.

Chhajer pointed to the industry's own behaviour as evidence. "Within technologies and product families, it's actually more of an extension than a leap," he observed, noting that small Tier-2 and Tier-3 suppliers already supply both ICE and EV platforms without treating it as a wrenching switch.

The bigger questions on leadership agendas, in his view, are how far ahead of demand to invest, whether to build capability in-house or acquire it, what to automate, and whether to deepen existing strengths or diversify. Unlike the one-time tooling traditional components required, EVs, electronics and software need continuous R&D spending, the report notes, turning the powertrain decision into an ongoing capital question rather than a single bet.

For smaller suppliers, Chhajer said the starting point is not a wholesale pivot but self-assessment. "You take a look at what product technologies you have, what capabilities you have and where within ICE and EV you can extend them," he said. "I don't think any company sits down and says, okay tomorrow, let's invest in EV." The shift, he added, happens product by product.

Put together, the interview and the report point to a different kind of winner than the ICE-versus-EV framing suggests: not the supplier with the earliest or biggest EV bet, but the one that preserves options, protecting ICE cash flows, building powertrain-agnostic products, and investing in EVs only where the economics and customer pipeline justify it.