setup especially in the powertrain and final assembly lines the final choice that an oem makes will ultimately hinge on its xev strategy and the investments needed it is however important to thoroughly assess the pros and cons related to both the options before deciding to commit to one of themstrategic option 1dedicated modular xev line this option suits the oems who have a future focus on evs as part of their product strategies as per estimates the threshold volume for deciding to invest in a dedicated xev set up is 50100k vehiclesannum however this will also depend on the projected volume growth for ev production if the volumes are relatively flat and hovering around 50kannum for the next few years it is prudent to produce on an ice line with some modifications and upgradations to adjust to ev production our estimates suggest that setting up a new dedicated line for ev will require investments to the tune of usd 2 billion to 25 billionanother suboption which can be considered is the micro factories as opposed to the gigafactories like that of tesla propagated by a uk based ev startup called arrival the concept harps on a distributed production network with small lowcost micro factories scaled to supply either 1000 buses or 10000 delivery vans annually to customers nearby unlike the traditional autoassembly plants with high upfront costs and time the micro factories cost significantly less usd 50 million and can be ready to start production in a few monthsthe concept offers a lot of promise for companies that are not very committed to the ev bandwagon and would like to follow a wait and watch strategy however the criticism about the concept lies around its inability to create jobs on a massive scale 200 jobs per 200000 sq feet and hence hitting roadblocks in terms of policy incentives across countries also with the recent supply chain disruptions the complexity of fulfillment of and from these micro factories to the demand points remains a major point to considerstrategic option 2mixed production in terms of the changes required to adjust the existing ice line to produce evs major investment areas are the battery and the electric motor area the lines and equipment used are the same with additional stations mainly for battery and traction unit assembly and dropping in the final assembly line for the powertrain assembly shop significant amount of change will be needed as most of the existing equipment will not be suitable for electric motor production and new equipment eg for power electronics assembly will be needed there is also a need for reskilling and training for handling new manufacturing processes like windingfor the battery the incumbent powertrain workforce cant be directly shifted to battery manufacturing and would need significant reskilling to handle high voltage components when production is done on the same line mixed production there will be variations in assembly time as ice vehicles require the same assembly time however for ev nonmatching parts