We live in a world in which the future of transportation is rapidly becoming electric. Electric vehicles offer some exciting benefits for consumers, as well as for businesses and the environment:
- They are quieter than gasoline vehicles, which means less noise pollution.
- Produce fewer emissions, meaning cleaner air.
- Have lower maintenance costs because they don’t require oil changes every few thousand km’s.
- They are more energy-efficient, meaning less fuel consumption per mile.
But what does this mean for cutting tool manufacturers? While electric vehicles may be an environmentally friendly choice, their impact on society goes far beyond the realm of clean air and quiet streets.
This blog post will examine the impact of electric vehicles on the cutting tools industry, the oil industry, and the machine tools industry. It will also explore some opportunities for cutting tool manufacturers in India to take advantage of this trend!
Why are electric vehicles the future?
We can expect the electric vehicle (E.V.) market to reach US$845 billion by 2026. But what does this mean for the cutting tool industry?
While E.V. sales have been increasing steadily, the market has yet to see a real boom. The primary reason is the high cost of lithium-ion batteries. Of course, battery storage capabilities and the charging time also play a significant role.
The fact remains that E.V.’s will not replace combustion cars any time soon. The technology required is still not there, but it’s getting closer and closer with every passing day.
E.V.’s have become cheaper and easier to produce, but it remains difficult for manufacturers to profit.
Electric vehicle scenario industry in India
India’s electric vehicle industry is growing. The central and state governments have launched schemes and incentives to promote electric mobility and implement regulations and standards. The country will benefit mainly by switching its transport from I.C. engines to electric motors. However, there are challenges like lack of charging infrastructure, high initial cost, and limited renewable energy sources. Still, e-commerce companies, car manufacturers, app-based transportation network companies, and mobility solution providers have entered the sector and are slowly building up electric vehicle capacity and visibility
If you’re looking for a sign that electric vehicles will soon take over the world, look no further than India. Sales of electric vehicles in India tripled recently to 14,800 units. There are growing signs of momentum in this critical market of 1.4 billion people.
Electric scooters
The demand for electric scooters is so high that impatient consumers are taking to social media platforms to harangue startups like Ola Electric about the waiting times for deliveries.
Luxury electric cars
Telsa wants to ramp up sales in India, and Mercedes-Benz is rolling out an electric version of its flagship S-Class sedan. BMW also plans to launch multiple plug-in models.
So much for the days when luxury cars were a status symbol almost exclusively owned by the super-wealthy. There are signs that India’s growing middle class is starting to aspire to the finer things in life, and the country’s luxury automakers are taking note.
General automotive industry in India
The adoption of electric vehicles is not limited to luxury brands alone. Almost all major vehicle manufacturers in India, such as Tata, Maruti, Hyundai, Mahindra, and 2- wheeler manufacturers like Bajaj and Hero Motors, offer electric versions.
Disruption in cutting tool manufacturing by electric vehicles
Electrification of Cars
Electric vehicles are poised to shake up the cutting tool industry significantly. It’s not just a matter of changing the parts that get manufactured—the whole industry structure will be impacted, from supply chain to business models.
The difference between electric and internal combustion engine vehicles is striking. In an ICE car, you have many moving parts: pistons, valves, crankshafts, engine blocks, exhaust headers… but that’s not necessary for an electric vehicle. You don’t even need an exhaust system.
What does this mean for cutting tools? There is less throughput in production facilities and maybe even a potential market contraction for the automotive cutting tool industry.
If electric vehicles take off, the ICE market will shrink significantly, leaving only a few cutting tool manufacturers profitable. Experts predict that the ‘net’ market volume will be negative. New applications for electric vehicles will not be enough to fill the gap left by reduced ICE demand.
According to a report titled ‘Breakthrough of electric vehicle threatens European car industry‘. A typical car with an internal combustion engine (ICE) has about 1400 parts on average. In comparison, an electric vehicle has 200 components—a reduction of 86 percent. As a result, the drive train manufacturers will experience much disruption.
In terms of cutting tool manufacturing, this could represent a significant disruption. Below is an infographic that explains the significant differences in electric vehicle components vs. the ICE and the potential for disruption in cutting tool manufacturing.
Electric buses and trucks
Electric buses have a range of about 130-150 km and a speed of 100 km/hour. These numbers make sense for local city buses. But, the biggest challenge is the high cost. Electric buses equivalent to the luxury Volvo buses cost 2-4 times higher than conventional equivalents.
We can expect the global electric bus fleet to increase from 600 000 in 2020 to 1.6 million in 2025 and 3.6 million in 2030 in the Stated Policies Scenario. Most electrification is limited to urban buses, driven by reducing air pollution. On the other hand, intercity buses run on longer routes and hence require a longer charging time. We can expect lesser electrification of such buses, at least in the near term.
Overall, we can expect a longer adoption time for electric buses. Meanwhile, it is logical that manufacturers will invest in making combustion engines and electric buses simultaneously. Such a scenario will prove beneficial for the cutting tool industry.
Electrification of medium and heavy-duty trucks
Electric truck usage is mainly for deliveries in urban areas, where short driving distances and overnight charging are possible. The electrification rate of trucks is the lowest of all vehicle segments, at least for the near term. In part because long-haul trucking requires advanced technologies for high power charging and large batteries.
While making electric cars is relatively easy, electrifying trucks is more complicated. Fuel economy standards aren’t strict enough to rely on electrification to achieve them. Other policy measures such as Zero-emissions vehicle directives are also less ambitious for trucks than cars.
The difficulty in electrifying medium and heavy-duty trucks is a sigh of relief for cutting tool manufacturers. The truck manufacturing industry represents a sizeable business for cutting tool manufacturers. The trucking industry growth is not only in the new vehicle business but also in spares and after-market parts. Cutting tool manufacturers can consider the trucking industry a massive opportunity in the near term and focus efforts on aligning their business to serve this industry.
If you want to make cutting tools for the future please contact us.
Electrification of two and three wheelers
At more than 20%, two/three-wheelers are the most electrified road transport segment. Growth in this segment is mainly in Asia, where two/three-wheelers are prevalent. Sustainable development scenario reports predict sales of electric two/three-wheelers will increase from almost 25 million in 2020 to 50 million in 2030. The massive jump in numbers would account for more than half of all sales.
In the case of two-wheelers, particularly scooters, the average daily distance is low. It is well within the available range, and the possibility of charging overnight at home makes it easier for adoption.
In the case of three-wheelers, the added benefit of electric vehicles is the lower running cost. The cost could be a big draw for commercial three-wheelers (especially passenger vehicles). Prices of electric three-wheelers will be competitive with those of conventional autorickshaws.
Two/three-wheelers are easy to electrify because they are lightweight. Short driving distances require relatively small batteries, raising fewer issues related to charging from power systems. On a total cost of ownership basis, electrification already makes economic sense in some regions.
Strategies adopted by cutting tool manufacturers about electric vehicles
The cutting tool industry has been on the edge of its seats since the adoption of electric vehicles (E.V.’s). They are aware that the designs of the old tools would not do well in this new environment and that they will have to innovate.
However, they are also aware that they cannot completely abandon the current industry. Hence, the industry leaders face a huge decision: do they go with a hybrid approach or go all-in on E.V.’s?
The demand in automotive will increase slightly, due to the launch of hybrid cars, where the use of cutting tools is even more than present vehicles. However, after about 8-10 years, it will be more E.V.’s, where cutting tool usage will be lower. It is pertinent to mention that demand for round tools will be more than indexable tools.
Mr. Ahuja (M.D., Dormer Pramet India)
Strong foothold for tools for the aerospace industry for exotic materials & composites. The demand for some of the tools is going to come down. The tools required for cast iron will be most affected. So, one can see slow demand for tools required for cylinder block, cylinder head, transmission housing.
Mr. Ramakant Reddy (M.D., LMT Tools India)
Components with low or no machining allowance would lead to lowered consumption of cutting tools. High strength material usage (High Strength/Weight ratio) will increase. This change in material usage would make machining tough, and eventually, we have to apply newer cutting tool materials. We may also face, totally new material to machine, which we have not handled all this while.
Mr. Jay Shah (M.D., Tungaloy India)
Opportunities for Indian cutting tool manufacturers in the electric vehicle era
Polycrystalline diamond tools and electric vehicles
Composites make up many parts in vehicles these days. Hence, cutting tool manufacturers can expect increased demand for (PCD) Poly Crystalline Diamond tools. Carbon fiber and aluminum usage have increased in today’s vehicles. Hence, PCD tools will continue to replace solid carbide in specific applications, especially non-ferrous and composite cutting.
It is well-known that PCD tools allow significantly higher cutting speeds than solid carbide tools. Higher cutting speeds are even more critical with modern machining centers. Higher spindle speeds and better software technology enable higher throughput than traditional machining centers. When properly applied, PCD tooling can also increase the average tool life compared to solid carbide tools, providing many opportunities for lights-out machining.
CBN Tools and electric vehicles
E.V.’s use much aluminum compared to cast iron. This trend will cut into ceramics and Cubic Boron Nitride (CBN) tooling usage. CBN tools allow a much higher cutting speed for cast iron and have gained a lot of market share in recent years. Hence with the concurrent production of I.C. engines, hybrids, and E.V.’s, cutting tool manufacturers can expect a much higher demand for carbide cutting tools.
3-D Printing and electric vehicles
It’s well-known that 3-D printing has the potential to disrupt almost every industry. However, one part of the manufacturing industry that we rarely discuss is its threat to cutting tool manufacturers.
The demand for cutting tools is high, and it’s projected to continue growing at an annual rate of 7% in the next five years. Manufacturing industries, including electronics, aerospace, and automotive, drive these tools’ demand. Hence, innovation in cutting tool manufacturing could be incredibly lucrative to serve various industries.
However, 3-D printing may change this landscape entirely. As the technology develops, 3-D printers will likely produce parts for a wide range of devices and machines—including those that rely on cutting tools. On the positive side for cutting tool manufacturers, the potential negative impact of additive manufacturing on the industry seems to be limited for the foreseeable future. It even presents some growth opportunities for cutting tool manufacturers in developing prototypes.
Carbide cutting tools will likely be the preferred choice for finishing. 3D printed parts emerge from the build chamber not quite complete. Critical surfaces still need to be machined; holes need to be reamed or bored. And even open tolerance features need to be brought to specifications. The value of these parts is also relatively high. Hence, some of them take hours or even days to print.
Even though 3D printing will accomplish what many in the industry have feared since the beginning, that is less demand for traditional manufacturing. It is more likely that subtractive and additive manufacturing will complement each other.
If you are curious as to how you can improve the life of your carbide cutting tools- please click here. It is a blog about how cobalt leaching affects tool life.
Changing demands of the electric vehicle industry
The automotive industry will increasingly require different, precise, and high-quality parts to meet changing demands in electric vehicles.
- The industry will demand gearboxes with reduced noise. This demand will require precise machining with tight tolerances.
- Components will have to be much more wear-resistant to respond to sudden loads when switching from the electric drive to the internal combustion engine at high speeds.
- Brakes will need to be sturdier because of the increased weight caused by the additional battery and a need for turbochargers.
- Finally, car manufacturers will have to develop new production and machining concepts to manufacture the increasing number of electric drives.
All of these demands point towards new tooling requirements. Moreover, demand for high precision and accuracy cutting tools will be even more. Thus, cutting tool manufacturers with sophisticated setups will be much more preferred.
Diversification in other industries with similar machining requirements
Nobody forecasts that the cutting tool market supplying internal combustion engines (ICE) will vanish entirely. Other sectors that need identical components as the ICE will keep a portion of the current cutting tools market afloat, such as
- Locomotives
- Heavy-commercial trucks
- Marine vessels
- Aircraft
- Generators
- Off-road equipment
- Farm equipment
- Military vehicles.
These sectors will not adopt electric drivetrains as fast as passenger vehicles due to the power required for operation and the long-distance travel requirements.
Parts needed for the electric vehicles
Some components will need to be produced for the electric vehicles, such as battery casings, single-speed gearboxes, charging ports. Also, the manufacturing of batteries themselves could present an opportunity for cutting tool manufacturers.
The current scenario of electric vehicles in India is still in its nascent stage as the country is far behind the global adoption of electric vehicles. Higher adoption will require a complete overhaul of the power sector and effective government policies. But the Indian electric vehicle market is expected to grow at a CAGR of over 30% in coming decades due to increasing concerns regarding the pollution levels, rising disposable incomes, and growing electricity generation capacity.
As the demand for electric vehicles increases, the demand for cutting tools will also increase. With more than seven decades of experience in manufacturing cutting tools, Indian manufacturers are well placed to take advantage of this opportunity. They need to start focusing on developing new cutting tools that can be used in manufacturing electric vehicles. They also need to focus on process automation and technology upgrades which will help them improve their performance and reduce their manufacturing costs.
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Dear Team,
Impressive post with great content.
Thank you for sharing with us.
Thank you very much for your appreciation!
I think that while electric vehicles will require the use of different tools, not to mention increased production of said tools, I don’t think cutting tools will necessarily go away. It’s just a matter of shifting priorities somewhat. Good insight here!
Thank you Mr. Fallquist for your comment. Yes, the cutting tools needed for IC engine manufacturing will not go away immediately. However, signs of reducing demand are visible. And yes, as you said correctly, its a matter of shifting priorities
It was quite interesting to learn about how PCD tools provide higher cutting speeds compared to other alternatives so they’ll be proven useful for electric vehicle manufacturing that requires a lot of composite parts. I imagine if you work for a manufacturing company that produces electronic bikes, it would be best to make sure you have top-quality PCD tooling so you can be assured of the results of your products. I’ll keep this in mind in case I ever need PCD tooling in the future.
Dear innovationfilter.com owner, You always provide useful information.
Thank you