The company is diversifying into making motors for EVs and is also investing up to Rs 2,500 crore to set up a lithium-ion cell manufacturing plant in collaboration with 24M, an American company that is developing new technologies to produce lithium-ion batteries used in electric vehicles.
The auto parts maker is also widening its portfolio for combustion engine vehicles beyond its mainstay products like starter motors and alternators. This will see an investment of about Rs 150 crore.
It diversified into making motors for consumer appliances like air conditioners and washing machines over five years ago and plans to grow further in this segment.
The company won two production-linked incentives (PLI) schemes recently – for automotive components and air conditioners – while lost out to rivals in a third one for making advanced chemistry cells.
With this, the company looks to have half of its revenues from its new business lines, according to Babu KSV, the business head for e-mobility and automotive motors at Lucas TVS.
“There are many areas we entered to de-risk from the core automotive business,” he said. In the next five years, the company is looking to have 15-25% of its revenues from EV products, 10% from non-core automotive motors and 15-20% from motors for non-automotive applications like consumer goods, the senior executive said.
This comes at a time when the automotive industry is poised for a transition to electric mobility, which may make most of the core products in Lucas TVS’ portfolio obsolete. To be sure, the transition is expected to be gradual with about 30% of total vehicles sold by 2030 expected to be electric.
Lucas TVS is looking to start supplies of EV motors by the end of this month, Babu said. Production of these motors at scale was delayed, he said, as the company faced quality issues with its vendors.
The company has invested Rs 40 crore in setting up new lines for making a variety of motors for electric two- and three-wheelers. The automotive PLI scheme requires the company to make new investments of Rs 250 crore over the next five years, which it will meet, Babu said.
The company is setting up its new lithium-ion cell manufacturing plant near Chennai and has earmarked Rs 2,500 crore for the same. The plant is expected to be operational by January 2024 for making smaller quantities for customer qualification before ramping up production based on demand, according to Bhawani Shankar, the marketing vice president at Lucas TVS.
It has applied to get benefits for this plant under the Rs 18,100-crore PLI scheme for advanced chemistry cells but lost out the bid to the likes of Ola Electric and Reliance New Energy Solar.
