When Will The Impact Of Chip Shortages On EV’s End In India?

Semiconductor Chip shortages has become a trouble spot for EV growth in India. A fear that Chip shortages will lead to EV decline in India persists. This come amidst the rising need of the microprocessors with the rise in EV sales in Indian market. Marking 42,067 units, the sales crossed the 40,000 mark in a month first time in November 2021. 

The global shortage of chips has affected production and sales of EV enormously. Evidently, it is affecting electric two and three-wheeler production in India as well. Several automobile heavyweights have mentioned fear of unavailability of chips to adversely affect EV market. The Tatas owned JLR (Jaguar Land Rover) has already announced that tightness in the global market is expected to continue for some time.  

“Chip shortage is an issue for electric vehicles as well, particularly since in EVs there is a lot more electronics. We have been grappling with this problem for the last 6 months and trying to forge long term contacts with the Chip companies,” said Nagesh Basavanhalli, MD & Group CEO, Greaves Cotton at media meet. With a negative forecast for EV, he stressed that EV will be impacted negatively for next four quarters. “This will continue to impact the industry for the next four quarters at least and as the EV numbers increase this could turn into a bigger issue,” he added further.

India’s EV sector growth is mainly due to electric three and two-wheelers. Electric four-wheelers are lower in number comparatively. Tata Motors, which has been leading the EV market for four wheelers so far, has  expressed worries that the chip shortage will keep waiting times for cars up to six months. For other vehicles, it was at least two months.

Chips, or microprocessors, are semiconductors which form the central control for various commands such as audio-video controls, lower fuel consumption, navigation, collision detection system, and even lower engine pollution. Moreover, silicon carbide chips power up cars at greater speeds on EV charging stations.

The overwhelming view seems to be that the problems will continue at least till the end of this quarter, and a little beyond, assuming nothing else goes wrong, and fresh capacities and expansions come online soon.