The global shortage of semiconductors or chips in the aftermath of the Covid-19 led pandemic has eased as per a report by Crisil. A development that led most automakers to cut down production significantly and postpone the launch of new models or to put them to production through 2020, 2021, 2022 and a good part of 2023 has finally eased to iron out any supply chain disruptions that may be there. 

Expected to address and improve predictive demand forecast, the better availability of chips should enable better production schedules. By FY2025-26, Crisil analysts are of the opinion that demand-supply dynamics should be more balance with additional manufacturing capacities getting commissioned. 

With the chips possessing distinct electrical properties that make them the cornerstone of all electronic equipment and devices, it is the auto industry that has come to use them for a variety of functions as automobiles turn increasingly software driven. While the computer and communication equipment (C&C) segment consumes roughly 63 percent of the chips produced, the auto industry consumes roughly 13 percent of them. The other industrial segments consume about 12 percent. 

With new developments such as autonomous and EVs, the use of semiconductors in automobiles is only slated to rise. With passenger vehicles the recipient of most technological innovations ahead of other segments such as two-wheelers, three-wheelers and commercial vehicles, it should not come as a surprise that they consume about 1,500 chips on average – the highest among all automobile types. 

As more advanced electronic features are incorporated, the use for chips increases. The electric passenger vehicles, for example, use almost twice as many chips as internal combustion engine (ICE) passenger vehicles do. The improving supply and slowing demand for computers and mobile phones is therefore looked upon as a blessing in disguise for automobiles and their manufacturers. 

Anuj Sethi, Senior Director, CRISIL Ratings, mentioned, “The chip shortage faced by Indian passenger vehicle makers is easing, with current availability at 85-90 percent of total requirement. The production loss on account of the chip shortage, which had halved to about 300,000 PVs on-year in fiscal 2023, is estimated to have further declined to under 200,000 PVs by the end of September 2023.”

Most passenger vehicle manufacturers are currently operating at near optimal capacity utilisation due to stronger-than-anticipated demand. New orders to be serviced remains high at about 700,000 units at the end of September 2023. 

The easing of chip shortage should help automakers honour new orders with better prediction and faster production. Global automobile demand, severely impacted by the Covid-19 pandemic, made a strong recovery in the latter part of FY2021-22. It caught automobile manufacturers off guard as they had not placed substantial orders for chips. 

The surge in demand for personal computers, laptops and mobile phones, driven by work from home, virtual learning and remote healthcare services, led to a significant chip procurement challenge for the automakers. 

Geographically, the chip ecosystem is skewed, with western nations dominating chip architecture, design, manufacturing equipment, specialised materials and chemicals. Semiconductor fabs1 on the other hand are concentrated in eastern nations, such as Taiwan and South Korea.

Given the criticality of chips in the defense and aerospace industries, the United States and the European Union have offered incentives of about USD 100 billion for localisation of semiconductor fabs. As a result, many global players are slated to spend about USD 360 billion towards setting up new facilities, which would be operational by 2025 and 2026. 

In the Indian context, demand for chips will continue to increase over the medium term, driven by the gradual rise in EV adoption and growing demand for advanced feature-laden ICE vehicles.

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Japanese technology company Pioneer Corporation has announced it will attend CES 2026 in Las Vegas from 6-9 January 2026. The company plans to showcase its recent accomplishments in devices and solutions for software-defined vehicles (SDVs) and motorcycles.

These solutions leverage Pioneer's expertise in in-vehicle acoustic environments, human-machine interface (HMI) and connectivity technologies.

The presentation will cover several areas:

• Integrated Sound Platform: This platform is scalable, allowing diverse automakers to install Pioneer's or other vendors’ sound solutions tailored to their models. The software-enabled hardware design allows for lighter parts and components, contributing to lighter vehicles and improved fuel economy, while optimising costs. Visitors can experience three types of sound systems (entry-level, premium, and luxury) in a demo vehicle.
• Spatial Audio System: An advanced audio system, adaptable to vehicles including older models, provides drivers and passengers with a high-quality spatial audio experience. This innovation is the culmination of Pioneer’s expertise in in-vehicle acoustics, coupled with technologies. Visitors will experience multi-channel spatial audio and a sense of presence in a demo vehicle.
• Entry-level Cockpit Domain Controller (CDC): A newly developed CDC is designed for budget-friendly vehicles, offering a cost-effective alternative for flexible display and control design. This CDC shares fundamental design with Pioneer’s existing IVI software without employing a hypervisor, enabling entry-level vehicles to benefit from cockpits.
• AI-enabled Camera Solutions: Next-generation automotive-grade AI-enabled camera platforms elevate driver safety by enhancing visibility and eliminating blind-spots and also deliver personalised driving experiences. Pioneer will showcase a demo vehicle equipped with ten AI-enabled cameras, designed for factory-installation by automakers, providing the driver with 360-degree surround view during driving, parking, and poor weather scenarios. The company will also showcase its drive recorder portfolio, which encompasses a connected smart camera featuring real-time driver monitoring, alerts and driving diagnostics, as well as digital mirrors, modular dashcams and other accessories available for factory installation and as add-ons to enterprise fleets.
• Connected Solutions for Motorcycles: Software-defined solutions for motorcycles will be unveiled, encompassing meter clusters, onboard camera devices, and other connected solutions. Live demonstrations will showcase services made possible by Pioneer Ride Connect, which integrates Bluetooth Low Energy (BLE) between smartphones and onboard devices, AI technology for enhancing the safety and entertainment of motorcyclists and unique HMIs that facilitate an intuitive user experience.

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JSW MG Motor India has announced that its popular MG Windsor electric vehicle (EV) has completed a journey from Leh to Kanyakumari, covering 3,757 kilometres in 83 hours and 43 minutes. The journey was undertaken by Mountain Goat, a group of motorsport professionals.

This time is the fastest for an EV to complete the route and has been recognised by the India Book of Records and Asia Book of Records. The company states this marks the Windsor as India’s First EV to undertake this journey.

The Windsor navigated through Ladakh’s high-altitude landscape to the southern coast, showing the car's reliability, range and performance under extreme conditions. The vehicle made 20 charging stops, demonstrating India’s growing fast-charging infrastructure.

The charging points were located using the e-Hub by MG app, which connects users to over 13,000 EV charging points across India through partnerships with 36 charge-point operators. This achievement supports the company's ‘EV Sahi Hai’ campaign.

Vinay Raina, Chief Commercial Officer, JSW MG Motor India, said, “Completing a diverse expedition from Leh to Kanyakumari using an EV in record time is a bold testament to India’s growing confidence in electric mobility and the infrastructure that powers it. This achievement also highlights MG Windsor’s reliability and performance across some of the most challenging terrains in the country. The future of transportation is clean mobility and JSW MG Motor India continues to play a leading role in this transition.”

Sanjay Bhola, Adjudicator, Asia Book of Records, and India Book of Records, said, “Heartiest congratulations to the entire team for this remarkable accomplishment and for setting a prestigious record with both India Book of Records and Asia Book of Records.”

The MG Windsor comes with a 52.9 kWh lithium-ion battery, delivering a certified range of up to 449 km per charge and supports fast charging. The car recently crossed the 50,000 sales milestone in India, the fastest time for an EV in the country.

Since its launch in September 2024, the MG Windsor has been India’s best-selling EV. It features an ‘AeroGlide’ design and ‘Aero Lounge’ seats reclinable to 135 degrees. The centre console includes a 15.6-inch GRANDVIEW Touch Display. The company has since introduced the MG Windsor PRO variant with an extended battery pack and the MG Windsor Inspire, a limited-edition anniversary special.

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BatteryPool, a start-up focussing on pay-as-you-go access to EV batteries, has raised INR 80 million in a Pre-Series A funding round led by Inflection Point Ventures. The round also included participation from Indian Angel Network (IAN), Chennai Angels, Keiretsu Forum and notable HNIs.

The start-up currently manages over 2,000 batteries across six cities. The funding will be used to scale its battery fleet 10x over the next 18 months and strengthen its nationwide footprint.

BatteryPool uses proprietary hardware and an IoT-connected battery management system to power a sachet-style, pay-as-you-go energy platform for EVs. The company offers a model that allows riders to pay in small daily, weekly, or monthly amounts, making EV usage more accessible.

Vikram Ramasubramanian, Inflection Point Ventures, said, “As an emerging economy that's adopting EVs, India holds immense potential that can be unlocked through innovative, flexible solutions. Where commercial operation of EVs is concerned, fast and efficient charging becomes vital because any delay directly leads to a loss of time and hence revenues. BatteryPool addresses this by providing seamless, pay-as-you-go access to charged batteries, helping riders and businesses be constantly mobile. In addition, the company monetizes batteries through their complete lifecycle, creating multiple revenue streams out of one single asset.”

Ashwin Shankar, Founder, BatteryPool, said, “The sachet model transformed how Indians consumed everything from mobile data to daily essentials, EVs are next. By bringing sachet-style, pay-as-you-go energy to batteries, we’ve made electric mobility affordable and accessible to the masses. As we move forward, we’re focused on strengthening the ecosystem, building battery access, improving the user experience, and supporting the everyday rider as the country transitions to electric mobility.”

BatteryPool was founded in 2020 by Ashwin Shankar, an Electrical Engineer who previously worked at Schlumberger and NASA.

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The Union Cabinet, Chaired by Prime Minister Narendra Modi, has approved a Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets with a financial outlay of INR 72.8 billion.

The initiative aims to establish 6,000 Metric Tonnes per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India. The government states this will enhance self-reliance and position India as a key player in the global REPM market.

REPMs are types of permanent magnets vital for electric vehicles, renewable energy, electronics, aerospace and defence applications. India’s demand for REPMs is met primarily through imports, but consumption is expected to double by 2030 from 2025.

The scheme will support the creation of integrated REPM facilities, covering the conversion of rare earth oxides to metals, metals to alloys and alloys to finished REPMs. This step supports the Atmanirbhar Bharat Abhiyan and India's Net Zero 2070 commitment.

The total financial outlay of INR 72.8 billion consists of INR 64.5 billion towards sales-linked Incentives on REPM for five years. While the remainder INR 7.5 billion towards capital outlay for setting up 6,000 MTPA of manufacturing facilities.

The total capacity will be allocated to five beneficiaries through a global competitive bidding process, with each receiving up to 1,200 MTPA of capacity.

The scheme duration is seven years from the award date, including a two-year gestation period for setting up the integrated facility and five years for incentive disbursement.

The government states this initiative is a step towards strengthening the domestic REPM manufacturing ecosystem and enhancing competitiveness in markets globally.

Shailesh Chandra, President, SIAM, “The Indian automobile industry welcomes the Government of India’s newly announced scheme to promote the domestic manufacturing of Rare Earth permanent magnets, with an allocated outlay of INR 72.8 billion. This initiative is a significant step toward building a resilient and stable supply chain, particularly for components and sub-assemblies essential for the production of electrified vehicles.  
The scheme is expected to accelerate adoption of clean mobility solutions and support India’s broader sustainability goals. By strengthening indigenous manufacturing capabilities, it will contribute to reducing carbon emissions and lowering dependence on crude oil imports, further enhancing the nation’s energy security.”

Vikrampati Singhania, President, ACMA, “ACMA wholeheartedly welcomes the Cabinet’s approval of the REPM Manufacturing Scheme. This is a strategic and forward-looking intervention that addresses one of the most critical gaps in the EV and advanced mobility ecosystem. Rare Earth Permanent Magnets are foundational to electric motors and high-efficiency systems, and the establishment of a domestic, integrated manufacturing base will significantly strengthen India’s technological competitiveness. This initiative will not only reduce import dependence but also provide long-term resilience to the automotive supply chain, encourage investments in advanced materials, and position India strongly in global value chains for EVs and clean energy. We commend the Government’s vision and remain fully committed to supporting the industry in leveraging this opportunity for innovation, value creation, and Atmanirbhar Bharat.”

Stephane Deblaise, CEO, Renault Group India, “The Government’s decision of investing INR 72.8 billion for India’s first integrated Rare Earth Permanent Magnet manufacturing scheme is a pivotal step in strengthening the nation’s self-reliance aspirations. This initiative reflects India’s strategic intent to strengthen its rare-earth refining capabilities and accelerate high-value manufacturing.  For the automobile sector, localizing rare earth magnets will boost growth for both auto OEMs and component manufacturers, support clean energy powertrains, reduce import dependence, deepen the domestic value chain and enhance long-term competitiveness. We welcome this vision and look forward to contributing to a robust, future-ready mobility landscape that supports India’s sustainable growth and its ambition to become a global automotive hub.”  

Jaideep Wadhwa, Director, Sterling Tools, "The Government scheme to invest nearly INR 75 billion in Sintered Rare Earth Permanent Magnet production is a very timely and welcome move.  This, along with the plans for semiconductor and cell manufacturing, reaffirms the country’s commitments to electrification. However, this one initiative, aimed at adding 6,000-tonne capacity over seven years, will not be a panacea for all REM availability issues. India must also promote technologies to reduce the overall dependence on rare earth magnets. A holistic solution must include development of magnet free motor technologies. Fortunately, great progress has been made in magnet free technologies in recent years. Indian OEs and Tier 1s need to work together to commercialise these technologies at the earliest."

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