India is set to emerge as the world’s fourth-largest electric car manufacturer by 2030, according to a recent report by Rhodium Group, a US-based think tank. The country’s electric vehicle (EV) production capacity is projected to surpass 2.5 million units annually, rising sharply from the current figure of 0.2 million.
This puts India behind only China, Europe, and the US in global EV manufacturing capabilities.
Domestic Supply to Exceed Demand
Despite this promising trajectory, the report cautions that India’s production could outpace domestic demand by 1.1 to 2.1 million units in the next five years.
This capacity surplus signals a need to expand into international markets. However, doing so will depend heavily on reducing manufacturing costs.
“India has a window to emerge as a global EV hub,” the report notes, “but only if it can keep costs competitive with Chinese manufacturers.”
Competitive Pressure from China
China dominates global EV manufacturing, controlling over 60% of the market. Chinese companies also benefit from low raw material costs, large-scale production, and government subsidies.
For India to rival China in export markets, it must focus on:
- Lowering input costs
- Enhancing battery production
- Boosting supply chain efficiency
- Scaling technology-driven solutions
Production Growth Backed by Indian Giants
Major Indian players like Tata Motors, Mahindra & Mahindra, and Maruti Suzuki are rapidly scaling their EV lines.
In May, Tata Motors announced plans to invest ₹15,000 crore in its EV division by 2030. Mahindra recently unveiled a new EV-only production line at its Pune plant.
These efforts align with the government’s FAME II and PLI schemes, designed to incentivise electric vehicle production and localise component manufacturing.
Export Potential and Policy Support
The Rhodium report highlights Southeast Asia, Africa, and Europe as potential export markets.
However, access to these regions will depend on India’s ability to:
- Meet global quality standards
- Maintain cost competitiveness
- Build EV charging networks
- Enter strategic trade agreements
India’s Ministry of Heavy Industries has acknowledged these challenges and is working on policy support to aid exports.
Battery Manufacturing Remains a Hurdle
Battery costs account for nearly 40% of an electric car’s total price. Currently, India imports most of its lithium-ion cells from China and South Korea.
The ACC Battery Storage PLI scheme, launched in 2022, aims to address this. Companies like Reliance New Energy and Ola Electric have begun work on gigafactories.
Still, experts say supply chain constraints and mineral dependency remain major bottlenecks.
Rhodium’s Call to Action
Rhodium’s analysis ends with a clear message:
India can lead the global EV shift, but only if it moves quickly, invests strategically, and focuses on cost-cutting innovation.
India’s path to becoming a global EV powerhouse is clearer than ever. But unless it tackles key economic and policy hurdles, the surplus production may become a missed opportunity.
The next five years will determine if India can move beyond domestic leadership to global EV influence.