EV Value Chain
Fig 1: The entire value chain of the EV industry along with their EBITDA margins
1. Cell manufacturing, Battery Management System and battery packaging
The first segment in the value chain is Cell manufacturing, Battery Management Systems and battery packaging. This segment has an EBITDA margin of 15-20%. A battery cell is the basic unit of a battery. A battery pack is an assembly of multiple battery cells. These battery packs are the energy storage system of an EV. BMS or battery management system is the brain of the battery which maintains the health and performance of a battery.
Examples of companies in this segment are LOHUM Cleantech, Battrixx in Cell Manufacturing and Cyient in BMS. The traditional battery giants Exide and Amara Raja have both announced their entry in this segment.
This segment also contains battery chemical producers like Gujarat Fluorochem, Ami Organics, Neogen Chemicals, Tata Chemicals etc.
2. Electrical systems, Mechatronics and Thermal Management
The second segment is Electrical systems, Mechatronics and Thermal Management of EV components. Here, some businesses specialize in manufacturing various parts that make up an electric vehicle and this includes everything from motors to inverters which contribute to the overall performance and efficiency of the EV. This segment has a 7-10% EBITDA margin. Some examples are Tata AutoComp, Sona Comstar, ElectraEV and Schaeffler.
3. Software and Telematics
The third segment is software and telematics which has an EBITDA margin of 15-20%. Just like your phone has sophisticated software even EVs are run by software. The electronic control units in EVs manage the battery, control the motor and user interface. This software is crucial for the efficient and safe operation of vehicles and this means as we move towards EVs and as more and more cars get connected to the internet, we will see a huge surge in in-car applications.
Tata Technologies, KPIT Tech, Cyient, ElectraEV etc are companies in this segment.
4. OEMs
The fourth segment is that of new age OEMs or original equipment manufacturers and they have an EBITDA of 8-10%. In this segment, you have companies like Tata Motors, Ather Energy, Ola, Atul Auto, Bajaj Auto, Kinetic Auto, Hero Motors etc which produce, design engineer and assemble EVs.
5. Charging Ecosystem
The fifth segment is for the charging ecosystem which has an EBITDA margin of 8- 10%. Tata Power and ABB are a major player in this segment.
6. Mobility-as-a-service
The sixth segment has companies in the mobility as a service segment with an EBITDA of 7 to 10%. It includes companies like Zip Electric, Bluesmart and ULU.
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