ZF India Warns EV Growth Hinges on Power Electronics and Scale

ZF India Highlights Critical Challenges for Electric Vehicle Growth

ZF Group India president Akash Passey has highlighted power electronics, unpredictable demand, localization economics, and supplier integration as major challenges for India's electric vehicle industry. Speaking at the Autocar Professional EV Conclave 2026, Passey urged the industry to reconsider its expectations for domestic manufacturing scale and technological readiness. He contrasted India's acceptance of relatively modest manufacturing capacity shares with the approach of a neighboring country, where a facility may account for 80% of global capacity. Passey said Indian industry participants should not become satisfied too early, emphasizing that substantial work remains before the country can establish stronger capabilities across the electric vehicle value chain. His remarks also highlighted the need to align engineering capabilities, production volumes, supplier collaboration, and cost expectations.

Power Electronics Remains a Critical Capability Gap

Passey identified power electronics as a particularly weak area for India's electric vehicle ecosystem, warning that the industry must address this capability gap to remain competitive. Electric vehicles depend heavily on power electronics, making the technology important to developing and manufacturing the systems required for electrified powertrains. His comments emphasized that broader progress in electric mobility will require more than increasing vehicle production or announcing new manufacturing facilities. Domestic capabilities must also develop in technically demanding areas that support electric vehicle performance and system integration. Passey cautioned that failure to strengthen power electronics could undermine the industry's ambitions. However, his remarks did not specify particular components, investment requirements, production targets, or a timetable for closing the gap.

Unpredictable Demand Complicates EV Localization

Demand uncertainty presents another obstacle to expanding domestic electric vehicle manufacturing and localization. Passey explained that ZF wants to localize many EV-related products and systems, but current market conditions do not always provide a viable business case because volumes remain unpredictable. This creates a commercial challenge for suppliers considering whether to establish or expand local production capabilities. Localization decisions depend on sufficient visibility into demand to justify the associated commitments, while uncertain volumes make it harder to determine whether investments can be supported by future business. Passey's comments highlight the relationship between market scale and supply-chain development: improving localization requires not only technical readiness but also demand conditions that allow suppliers to assess the commercial feasibility of manufacturing locally.

EV Development Requires Earlier Supplier Involvement

Passey also called attention to changes in the relationship between automakers and suppliers as the industry transitions from internal combustion engine vehicles to electric vehicles. In conventional ICE programs, suppliers are typically brought into the process when requests for quotations arrive. Electric vehicle programs require suppliers to participate much earlier, beginning at the basic design stage. Passey described ZF as a system integrator and argued that the traditional role of a component manufacturer is no longer sufficient for the evolving market. This shift places greater importance on engineering collaboration, coordinated system development, project management, and reliable delivery. Suppliers must therefore engage with vehicle programs earlier and contribute to the development process rather than simply respond to component purchasing requirements.

Frugal Engineering and Value Are Essential for Indian Programs

Indian automotive programs introduce additional requirements around value and frugal engineering, according to Passey. Suppliers must develop solutions that meet the price points expected in the market while satisfying the technical and delivery requirements of the vehicle program. This makes cost-conscious engineering an important part of system development rather than a consideration limited to purchasing decisions. Partnerships, on-time delivery, and project management also become increasingly important as suppliers take on earlier and more integrated roles. The challenge is to combine engineering capability with commercial discipline while delivering products and systems suited to local market requirements. Passey's remarks did not identify specific cost targets or prescribe particular engineering methods, but they emphasized that value and affordability remain central considerations for Indian automotive development.

Vehicle Platforms Create Opportunities for Engineering Work

Passey identified vehicle platforms as an important source of engineering opportunities in India, noting that the country is creating more than 50 platforms in the passenger car segment. This activity provides a context for the engineering work required to develop vehicle systems and integrate supplier technologies into new programs. ZF has approximately 5,500 engineers across 12 technical centers in India, reflecting the company's engineering presence in the country. Passey clarified, however, that not all of these engineers work on electric vehicles. The distinction matters when assessing the available EV-specific engineering workforce: the company's overall engineering headcount should not be interpreted as the number of employees dedicated to electrification. His comments connect India's platform development activity with the need for capable suppliers and early engineering participation.

Industry Impact & Outlook

ZF Group India's assessment highlights how the country's electric vehicle ambitions depend on the combined development of technical capabilities, commercially viable localization, and closer cooperation between automakers and suppliers. Power electronics remains a specific capability gap, while unpredictable demand can discourage suppliers from committing to domestic production. Earlier supplier involvement and cost-conscious engineering could help automotive programs coordinate system development with local market requirements. India's creation of more than 50 passenger car platforms also points to opportunities for engineering participation, although the size of the opportunity for individual suppliers will depend on their capabilities and program requirements. For automakers and component manufacturers, the practical priority is to align engineering investment, supply-chain decisions, and production economics with credible demand and the evolving needs of electric vehicle programs.

Frequently Asked Questions

What challenges did ZF Group India identify for electric vehicle growth?
ZF Group India president Akash Passey identified power electronics, unpredictable demand, localization economics, and changing supplier responsibilities as major challenges for India's electric vehicle industry. He emphasized that technical readiness and commercially sustainable manufacturing must advance together. His remarks also highlighted the importance of early supplier involvement, project management, partnerships, and on-time delivery. These factors influence how suppliers participate in vehicle development and determine whether local production investments can be justified. Passey's assessment at the Autocar Professional EV Conclave 2026 stressed that the industry still has substantial work ahead to strengthen its capabilities.

Why is power electronics important to India's EV industry?
Power electronics is important because electric vehicles depend heavily on these technologies, and Passey described India's capabilities in this area as weak. He warned that failing to address the gap could undermine the industry's ability to achieve its ambitions. His comments indicate that expanding electric vehicle manufacturing alone is insufficient without strengthening the technical capabilities needed to support electrified vehicle systems. Passey did not identify specific components, investment amounts, or implementation deadlines. The central message was that improving power electronics capabilities is an important requirement for developing a more competitive domestic electric vehicle ecosystem.

Why does unpredictable demand make EV localization difficult?
Unpredictable electric vehicle volumes make it difficult for suppliers to justify investments in local manufacturing because the commercial case depends on expected demand. Passey explained that ZF wants to localize many EV-related products and systems, but uncertain volumes prevent some opportunities from making business sense today. Suppliers must evaluate whether anticipated production levels can support the commitments involved in establishing local capabilities. His remarks highlight the connection between demand visibility and localization decisions. He did not provide specific volume thresholds or investment figures, so the scale of the challenge varies according to the individual product, program, and business case.

How is supplier involvement changing in electric vehicle development?
Supplier involvement is moving earlier in the development process, from responding to requests for quotations in conventional internal combustion engine programs to participating at the basic design stage in electric vehicle programs. Passey explained that ZF sees itself as a system integrator rather than simply a component manufacturer. This approach places greater emphasis on collaborative engineering, coordinated development, project management, partnerships, and on-time delivery. Earlier participation allows suppliers to contribute during the initial design process instead of entering only when purchasing requirements are issued. His remarks reflect a broader change in the responsibilities expected of automotive suppliers as vehicle technologies and development processes evolve.

What role does frugal engineering play in Indian automotive programs?
Frugal engineering helps address the requirement to deliver automotive solutions that meet market price points while satisfying relevant technical and program requirements. Passey emphasized value and frugal engineering as additional expectations for Indian programs. He also highlighted partnerships, on-time delivery, and project management as important factors in successful supplier participation. These requirements mean that engineering solutions must account for commercial realities alongside technical development. Passey did not specify cost targets or particular engineering techniques. His comments establish affordability and value as important considerations for suppliers developing systems and components for India's automotive market.

How large is ZF's engineering presence in India?
ZF has approximately 5,500 engineers across 12 technical centers in India, according to Passey's remarks at the Autocar Professional EV Conclave 2026. He also noted that India is creating more than 50 platforms in the passenger car segment, presenting opportunities for engineering work. However, Passey clarified that not all of ZF's engineers work on electric vehicles. The total headcount therefore represents the company's broader engineering presence rather than its dedicated EV engineering workforce. His comments connect the country's vehicle platform development activity with opportunities for supplier participation, while distinguishing overall engineering capacity from resources specifically assigned to electrification.