The analytical company's research predicts this growth will occur despite the increasing availability of parts for vehicles with conventional internal combustion engines.
According to CRISIL, from Rs 4,300 crore last fiscal year to Rs 72,500 crore in fiscal 2027, the income from EV components is anticipated to increase at a CAGR of over 76%.
The battery industry is expected to generate up to 60% of this revenue, with the powertrain and electronics sectors accounting for 15% each. Predictions indicate that 90% of EV component supply will be allocated to the two-wheeler and passenger vehicle markets.
In the report, Naveen Vaidyanathan, director of CRISIL Ratings, said, "EV components like batteries, drivetrains, and electronics give auto component manufacturers a chance to make money from more than just ICE (Internal Combustion Engine) vehicles."
According to a CRISIL analysis of 220 firms, which collectively account for one-third of the auto components market, the transition to EVs will bring both opportunities and challenges for domestic makers of car components.
The report states that the body, chassis, suspension, electrical, brake, lighting, and seating categories account for roughly 75% of revenue for traditional car part manufacturers. These components are also present in EVs; therefore, their expansion should not pose a difficulty. With additional expenditures, businesses will be able to partially re-engineer products for EVs, notwithstanding the possibility that this is necessary.
The transition to an EV may present difficulties for the remaining 25% of auto component vendors who specialise in ICE engines and transmission components. Components such as starters, alternators, fuel injectors, radiators, gearboxes, clutches, pistons, cylinder blocks, and exhaust systems are needed for ICE vehicles but unnecessary for EVs.
CRISIL emphasised that because the two-wheeler change is anticipated to be more rapid, auto component manufacturers with greater exposure to this market will be at greater risk than those that produce PVs or CVs.
The report further states that the majority of suppliers of automotive parts serve several end markets. By offering EV components and broadening their selection of non-automotive and industrial products, firms are also striving to mitigate the risk associated with their models.
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