Sharda Motors – Emission tailwinds or EV threat to exhaust systems?

Adding some material here that helps to understand the technology behind emission systems:

1. Passenger cars – The videos below explain the various parts of the exhaust system for a car, like manifold, catalytic converter, resonator and muffler :

• How an exhaust system works – YouTube
• 50) Exhaust System ~ Catalytic Converter, Muffler || Automobile Engineering – Hindi – YouTube

2. Changes in BS6 vs BS4 and Selective Catalytic Reduction

• What is AdBlue II Selective Catalytic Reduction SCR II DEF II BS6 Norms, PART 2 – YouTube
• The image below (taken from the video above) captures the gist of a diesel BS6 exhaust system:
  

3. Canning – The management mentioned that they do calibrated canning for one of their customers. Canning is the process of packaging the catalysts on a ceramic substrate in an engine’s After-Treatment-System. The following videos show the canning process:

• Catalytic Converter Assembly Systems – YouTube
• Catalytic Converters & Canning – YouTube

4. Euro6 exhaust after treatment unit – The video below is good visualization of how a Euro6 (from which BS6 was derived) CV exhaust system looks like. The system is pretty compact unlike the image shown above:

• Euro 6 engine technology – 3D motion picture – Renault Trucks – YouTube

From the above videos, one can see that:

• BS6 definitely increases the content per vehicle due to additional after-treatment-system
• For diesel engines, the content increase is much more due to addition of Diesel Particulate Filter (DPF), Diesel Exhasut Fluid (DEF) and a more complex SCR.

Some additional observations:

• Since BS6 increases the costs significantly for diesel engines, it has led to Maruti completely stopping it’s diesel vehicles program. More details on this link. Maruti is instead pivoting to CNG.
• Does this add an additional risk to Sharda’s revenues if other PV manufacturers gradually move away from diesel ? I think it does add a risk of a potential decrease of content per vehicle in the PV exhaust revenues where it has 30% market share. This should also be closely monitored.