Rapid EV adoption adversely impact forging industry: AIFI

Mumbai: Increased adoption of electric vehicles will adversely impact the domestic forging and casting industry resulting in reduced capacity utilisation as the number of moving parts in such vehicles are minimal compared to traditional ones, according to AIFI.

The Association of Indian Forging Industry (AIFI) on Wednesday said the industry, which is also grappling with rising input prices, might even face the prospect of 60 per cent of the sectoral players shutting down unless the government focuses on encouraging hybrid vehicles rather than just electric ones.

Automobiles accounts for 70-80 per cent of the total domestic forging production demand and amid deceleration in the auto sector, the forging industry has seen an average slowdown of 50 per cent of total capacity, the association said. "The electric vehicle sector will have a significant impact on the forging industry since the demand for moveable parts used in vehicles will decrease, resulting in considerable unutilized forging capacity. "We anticipate that EVs will shut 60 per cent of the forging and casting industries in the next few years, resulting in unemployment and unit closures," AIFI President Vikas Bajaj said.

As per the association, as against 2,000 moving parts in a conventional drivetrain, an electric drivetrain contains only 20. A recent study by IVCA in collaboration with EY and Indus Law, electric vehicle registrations in India surged 168 per cent year-on-year to around 330k units in 2021. The study forecasts the domestic EV demand to mount to 9-million vehicles by 2027. "However, the forging industry will need to look into alternative options such as aluminium forging and expand into non-automotive areas such as infrastructure, defense, healthcare, and railways, where the government is also substantially investing," he added.