EV manufacturers highlight a heavy dependence on Chinese imports for key resources and technical expertise
According to the Economic Survey 2024-25, electric vehicle (EV) policies must prioritise de-risking supply chains by promoting a self-reliant ecosystem, driven by increased R&D in advanced battery technologies such as sodium ion and solid state batteries.
To meet the industry's growing needs, future EV regulations should expand their scope. As EV demand rises, reliance on imported components such as DC motors, e-motor magnets, and other electrical equipment will also increase.
Leading EV manufacturers highlight a heavy dependence on Chinese imports for key resources and technical expertise. To mitigate these risks, policies such as the PLI Scheme for Advanced Chemistry Cell Manufacturing and the establishment of Khanji Bidesh India Limited (KABIL) have been introduced.
Domestic capacities are being built. For now, India sources 75% of lithium ion batteries from China, and it has near negligible production capacity for key components like polysilicon, ingots, and wafers. Moving forward, securing intellectual property in battery technology will be crucial. Additionally, promoting investment in battery recycling will further strengthen India’s EV ecosystem.
India has made significant progress in promoting renewable energy and strengthening domestic manufacturing through initiatives like the Production Linked Incentive (PLI) scheme. The domestic manufacturing efforts under the PLI scheme are expected to significantly support India's renewable energy targets by reducing costs, improving energy security, and boosting employment.
The report stated, “PLI Schemes can also reward the making of EV cells (Lithium-ion cells), as most manufacturing and value addition happens up to the cell-making stage. Furthermore, India must aim to establish technology transfer agreements with other nations that are also seeking to diversify their supply chains. Partnerships with other aspiring nations can help distribute the high costs of securing a comparative advantage in the global market.”