Five things EV entrepreneurs should know when buying critical components from China

As the market for electric vehicles grows, there are new entrepreneurs who want to enter the industry. This is a good sign for the market and also an opportunity for India’s manufacturing industry. However, untill the time India's EV component manufacturing industry becomes mature and self-reliant to produce the components locally, entrepreneurs will be sourcing from China and other countries. Products like lithium-ion cells, high power hub motors, controllers and chargers are still sourced from China.

BLDC motor from China
BLDC motor manufacturing at a small factory in China

While Chinese manufacturers are capable of producing high quality products, finding the right match can be challenging. Issues like quality fade, shipment delays, inconsistent production, among others, can become harsh reality if there are no checks implemented from the buyer’s side.

Here is the list of five things you should look out for when buying components or onboarding a new supplier:

1- Don’t trust pictures on Alibaba. Look for more details on the profile of the supplier. Do they have third party verification completed? Do they have enough quality certificates listed? Go to their website and see if its has an English version. Why is that important? That would be a strong indicator that the manufacturer sells internationally, which would mean higher chances of quality control. If possible, schedule a visit.

2- Gather complete business information. Things like the life of the company, what is their annual revenue, do they have an inhouse R&D team or enough engineers to make sure the product is made right. These are important to tell you if the owners are serious about improvement and growth.

3- Initial Quality Process Audit is important. If you are looking for a long term manufacturing partner to support your growth, its crucial to do a full quality audit before final onboarding. Do they maintain quality processes? If they do, is there a manual? How is the training done for employees? How do they manage incoming products for quality?.. and many such questions impact the quality of the final product you receive.

4- Quality fade is a serious issue. Chinese factories will send out the best products to you in the first container after that gradually deprecating the quality to increase margins. For example, the copper wire used in winding a BLDC motor can be of different grades and prices. It's easy to switch to a lower grade raw material in the long term.

5- Negotiate hard but know when to stop. Culturally, we love negotiating on prices. Indian market is also very price sensitive. But there is a popular term in Chinese manufacturing industry and that is “India Quality”. Many a times a manufacturer would agree to your price but would secretly cut on the quality. Ensure that you have an agreement on quality before reaching a final agreement on price.

Sometimes, small teams at startups are busy at what they do best and cannot have dedicated resources to manage multiple vendors and control the quality that is being shipped out to them. Maintaining full time staff within China is also a costly affair and may not be an optimal solution. Having an outsourced quality consultant assisting a project or quality checking large outgoing shipments can ensure you get to your goals, faster and without detours.

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Aurora Ventures is a professional team which can offer New Vendor Identification, Onboarding, Quality Audits and Factory Inspection services for your vendors in China.