India's Dual Tech Odyssey: Smartphone Surge & EV Challenges

Niranjan Gidwani Feb 17, 2024

I continue to be an extremely avid student of life, for life.

I make it a point to keep my personal learning curve sharp and steep. Hence, from January this year, I decided to touch upon two or three random topics of my own interest and share snippets of information along with my own views.

In this article, I will focus upon and share some thoughts on two topics which are always in focus these days, Smartphones and EVs.

Let’s begin with smartphones and the exciting things happening in India.

Maybe not many are aware of this but India is now the second largest phone manufacturing country after China. Yes, from an also-ran to being the second largest. Between 2014 and 2022, a whopping two billion 'Made in India' smartphones were produced. The latest research from Counterpoint shows that ‘Made in India’ mobile phone shipments crossed the two-billion cumulative units mark, registering a 23 per cent compound annual growth rate (CAGR) between 2014 and 2022.

According to a research director of Counterpoint, in 2022, more than 98 per cent of shipments in the overall Indian market were ‘Made in India,’ compared to just 19 per cent when the current government took over in 2014. Interestingly, local value addition in India currently stands at an average of more than 15 per cent and rising.

Another interesting piece of information is that, in the financial year ending March 2023, Iphones have propelled the smartphones category into the top five most exported commodities from India. American smartphone imports from China dropped around 10 per cent in the first 11 months of the year, while imports from India increased five-fold.

Interestingly, as per IDC, at a global level, a staggering 22 per cent of smartphone shipments in 2023 were above $800, driven by the premiumisation trend - which is happening across all regions and brands.

On one side, technology firms seem to be laying off thousands or freezing hiring. On the other side, jobs are on a steep upswing in electronics manufacturing (EMS). Hiring is going to intensify in the next 12 to 24 months as the industry is likely to employ an extremely large number of people to meet the growing manufacturing demands in this sector. And Tamil Nadu seems to be the favourite. Tamil Nadu recently beat Uttar Pradesh and Karnataka to emerge as India’s largest electronics exporter. As the state pulls out all the stops to lure global and local manufacturers, it’s also upgrading its skill development programs.

Great initiative. Besides IT services, brand India now needs to consolidate and take its other brands and manufactured products to the world.

Let’s move to the world of EVs.

All of a sudden, from the information I have picked up, the EV market is still growing, but the growth seems to be facing some headwinds.

Hertz, which purchased 100,000 Teslas to great fanfare, began dumping one-third of its EV fleet, taking a $245 million charge against its earnings. In the US, consumers are picking up more hybrids and gasoline-powered cars. There surely seem to be key hurdles related to one key area - battery charging.

Charging issues also seem to exist in a potentially large market like India, at least as of now. More than 22.6 million vehicles, including scooters, were sold in India last year with EVs accounting for 6.3 per cent of total sales. That may not sound like much, but it is a nearly 50 per cent jump in EV's share of the market from a year earlier, according to government data.

Yet, India seems to have just a little over public 11,000 charging stations in working condition nationwide. The Confederation of Indian Industry estimates the vast country needs a minimum of 1.3 million stations by the end of the decade. The current government surely has both the ability and the will to make this happen.

Not all stations are compatible with EV scooters, a major hurdle in a country where some 80 per cent of EVs sold last year were either two-wheelers or auto-rickshaws used as taxis.

In comparison, China, at the end of 2022, had nearly 1.8 million public electric vehicle charging piles, an increase of 56.7 per cent compared to 2021.

As of 2022, there were over 136,500 public electric vehicle chargers in the United States, spread across nearly 53,800 charging locations.

Here comes the most crucial question plaguing some of us.

Only in the US, there are about 250 million light-duty passenger cars powered by ICEs. By the end of 2021, China had around 260 million ice vehicles, Europe around 250 million and India around the same number. Just in these four markets, the population of internal combustion vehicles is over a billion. Not to forget additional tens of millions of heavy-duty trucks, buses and other large vehicles on wheels that also use large combustion engines. Do also add all the global production of defence vehicles.

If we were to put the whole world's numbers together, the number of gasoline vehicles would run into several billion.

When more and more EVs ultimately come on the roads, what or who has the plan to deal with all these billions of internal combustion engine vehicles, and in what manner? In the case of all other products, we seem to find landfills to fill up.

To give a parallel example, just in the US, 2.6 million tons of returned clothes wound up in landfills in 2020. According to Earth.org, fashion is the third-most-polluting industry in the world after construction and food.

Sometime down the road, answers would be needed on what would be required to be done for all internal combustion engine vehicles getting off the road.