Unlocking Clean Mobility through Hyper Local Production

Unlocking Clean Mobility through Hyper Localization Production

As the world moves toward sustainable mobility, the demand for more efficient production, dependable supply chains, and reliable sources of semiconductor components is on the rise. However, the challenges of global production, including its environmental impact and the vulnerabilities in supply chains, have highlighted the urgent need for innovative solutions to usher in a new era of cleaner mobility. From strengthening supply chains to reducing transportation emissions to meeting regulatory requirements, the shift to hyperlocal production is crucial. In the pursuit of more sustainable, environmentally responsible, and technologically advanced mobility solutions, IRP has implemented this approach as a strategic solution.

Stabilizing and Strengthening Supply Chains

Whether it’s geopolitical tensions or disruptions caused by unpredictable events like the COVID-19 pandemic, the automotive industry, like many others, has witnessed the disruptive effects of having a global supply chain. This can include inventory shortages, production delays, increased costs, and reputation damage among others.

These consequences emphasize the need for a more resilient supply chain that improves their ability to operate, and hyperlocal manufacturing serves as a key solution to solving these issues. Indeed, having the entire supply chain in close proximity to buyers and sellers helps to improve supply chain deliveries, distribute business operations systems and leverage centralized technology management benefits. Furthermore, this minimizes the dependency on various locations for sourcing materials and components, reducing the risk of disruptions from external factors such as geopolitical risks and natural disasters.

Combating Transportation Emissions

Accounting for approximately 20% of global CO₂ emissions, transportation is a major contributor to greenhouse gas emissions. Global manufacturing processes, which involve shipping components and products across long distances, significantly contribute to this carbon footprint. In the case of cargo ships, they account for approximately 3% of global greenhouse gas emissions, the equivalent of 1 billion tonnes of CO₂ per year. By minimizing component and end-product distances, hyperlocal manufacturing can dramatically reduce transportation emissions.

Meeting Regulatory Requirements

In an ongoing effort to reduce carbon emissions and combat climate change, many countries are promoting the use of EVs. To encourage domestic production, this is done through regulations, incentives, and subsidies. For instance, India’s government implemented the FAME Scheme Phase-II[1] and the PLI Schemes[2] to provide financial incentives to consumers, OEMs, and Tier 1s to manufacture locally. As a result, this facilitates and accelerates the hyperlocal EV manufacturing process.

Turning Our Vision Into Reality

Hyper localization is not just a strategy: It is a pivotal approach that can make clean mobility a reality. To unlock clean mobility through hyperlocal manufacturing, we have finalized the setup of mass-production capabilities and a robust supply chain through a system of sub-manufacturers and top suppliers in India. While 2022 saw EV sales in India hit a record 210% growth[3], crossing the million for the first time, having a robust supply chain and local production has become more apparent than ever.

Following a hyper localization production approach allows us to provide OEM and Tier 1 customers on the ground with efficient, cost-effective, and durable e-powertrain systems while also shortening product lead times and reducing transportation-related emissions. Moreover, complying with the FAME Scheme Phase-II and the PLI Schemes enables customers to benefit from government subsidies at the same time as accelerating EV adoption.

As we strive for a future of clean mobility, we must recognize that the journey does not end with EVs themselves and we must extend our commitment to sustainability in every step of the product life cycle.

Sources:

1. “Fame India Scheme”, India’s Ministry of Heavy Industries
2. “Production Linked Incentive Schemes for 14 key sectors aim to enhance India’s manufacturing capabilities and exports”, India’s Ministry of Commerce & Industry
3. “EV sales in India in 2022 record 210% growth, cross a million for the first time”, Ajit Dalvi, Auto Car Professional