Maharashtra’s Auto Sector Gathers to Tackle EV Transition Challenges for MSMEs

Pune, 26th September 2024: Key stakeholders from Maharashtra’s automobile sector gathered in Chhatrapati Sambhajinagar on Thursday to discuss the risks and opportunities posed by the state’s shift from Internal Combustion Engine (ICE) vehicles to electric vehicles (EVs). The event highlighted the impact on Micro, Small, and Medium Enterprises (MSMEs), which dominate the industry.

Organized by WRI India in collaboration with the Marathwada Auto Cluster (MAC) and Laghu Udyog Bharati, the workshop brought together industry leaders, MSME owners, and workers’ associations to address the challenges of the EV transition. Maharashtra, a major hub of India’s automobile manufacturing sector, contributes 7% to the state’s Gross State Domestic Product (GSDP) and 15.3% of its industrial output. The state is also grappling with the environmental impact of road transport, which is the second-largest emitter of greenhouse gases in Maharashtra.

Ashish Garde, Director of MAC, delivered the inaugural address, urging MSMEs to prepare for the EV shift. “The transition to EVs is crucial, and MSMEs must prepare for this shift. Building the necessary EV ecosystem is vital, and OEMs can play a pivotal role by actively engaging with auto component manufacturers in the MSME sector,” he said.

Mihir Soundalgekar, Treasurer of the Chamber of Marathwada Industries & Agriculture (CMIA), introduced the concept of the micro-factory model for EV manufacturing and digital twin-based maintenance. “Under the micro-factory model, a single robotic cell can manufacture an entire vehicle. In addition to being cost-efficient, it reduces the carbon footprint by minimizing transportation emissions and waste through local production,” he noted, emphasizing the potential for environmental sustainability.

Ranjeet Bhelke, CEO of Kinetic Communications Ltd., highlighted the need for MSMEs to strengthen their testing and validation capabilities when collaborating with Original Equipment Manufacturers (OEMs), particularly tier 1 suppliers. “MSMEs must not only focus on sales but also build strong servicing teams to support the transition. OEMs also have a key role in educating consumers on the correct usage of EVs,” Bhelke said.

With EVs rising from just 0.4% to 7.6% of vehicles on Maharashtra’s roads between 2020 and 2023, the state is leading in EV adoption. However, as MSMEs make up 97% of the auto manufacturing sector and employ around 200,000 workers, the workshop stressed the need for a balanced and inclusive transition. Insights from the event are expected to guide the development of pathways to transform Maharashtra’s auto industry while safeguarding the livelihoods of smaller enterprises.