Himadri Speciality plans to enter EV tyres business; eyes launch in 2 years

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Himadri Speciality Chemical Ltd plans to enter the electric vehicle (EV) tyres business, aiming to launch commercial EV tyres within 24 months, its chairman and managing director Anurag Choudhary told Moneycontrol in an interview. Himadri has roped in Boston Consulting Group (BCG) to evaluate the potential market share and capex strategies, Choudhary said.

Months after its strategic acquisition of Birla Tyres, the carbon products manufacturer is gearing up to join the ranks of major tyre producers, capitalising on the surging demand for EVs in the country. EV tyres differ from those used in petrol and diesel vehicles, as they are designed with minimal rolling resistance to reduce the energy required for movement. These tyres also generate less noise and have higher load-bearing capacities, ensuring safe support for EVs, which are typically heavier than traditional internal combustion engine (ICE) vehicles.

" The country is aiming to meet 50 percent of its electricity needs from renewable energy sources by 2030. As the adoption of electric vehicles surges, especially in the two-wheeler and three-wheeler categories, EV penetration in India is projected to exceed 40 percent by 2030. With significant changes in vehicle design, tyres must also evolve to meet these demands, with an increasing focus on reducing the overall carbon footprint," said Choudhary.

Last year, JK Tyre introduced low-resistance tyres specifically designed for EVs, while other leading manufacturers like MRF Ltd and CEAT have also shown interest in this segment.

Expansion plans

The carbon black industry must recalibrate its offerings to meet the needs of these new-age vehicles, Choudhary said, adding that Himadri is in the process of modernising, revamping and automating the Birla Tyres unit and the production [of specialty carbon black] will start in phased manner from next fiscal year.  Specialty carbon black is crucial for EV tyres as it enhances durability, improves electrical conductivity, and reduces rolling resistance, ensuring optimal performance and longer tyre life of EVs.

"We are pursuing organic growth through a brownfield expansion at our West Bengal facility, aiming to more than double our specialty carbon black capacity from the current 60,000 metric tonne per annum (MTPA) to 1,30,000 MTPA by investing Rs 220 crore," he added.

Green pivot

Himadri Speciality began its pivot to an energy transition strategy around 2020, aligning itself with the global shift towards sustainability. The company, traditionally known for its carbon black and coal tar pitch production, started diversifying into advanced materials crucial for the green energy sector.

The company is set to invest Rs 4,800 crore to foray into the manufacturing of Lithium-ion battery components. Its upcoming facility in Odisha will focus on producing Lithium Iron Phosphate (LFP), a cathode active material, which is a crucial component for EV batteries. This strategic move positions Himadri as the first Indian entity to enter this sector.