AdvantEdge's Kunal Khattar: India Can't Copy China's Playbook to Become an EV Hub

For decades, economic historians have lamented that India 'missed the bus' of the Third Industrial Revolution. While China spent the 1990s and 2000s transforming itself into the 'factory of the world' through low-cost, labour-intensive manufacturing, India leapfrogged straight to services and software. The result? A robust information-technology sector, but a hollowed out industrial base that left us dependent on imports for everything from toys to turbines.

But history rarely offers do-overs, unless a technological disruption resets the board completely.

The transition from internal combustion engines (ICE) to electric vehicles (EVs) and new age hard tech offers exactly that reset. It is a moment where mechanical legacy matters less than software integration, battery chemistry and frugal engineering—areas where India has a fighting chance. The question facing policymakers and chief executives today is not whether India can catch up to China’s legacy manufacturing, but whether it can leapfrog into becoming a global hub for new age hard tech.

Legacy automotive manufacturing was about engines, gearboxes and centuries of metallurgical proprietary knowledge held by German, Japanese and American giants. EVs are fundamentally different. They are 'computers on wheels'.

An EV has 40% fewer moving parts than an ICE vehicle but requires a significantly higher software integration. This plays directly into India’s strength. We are not trying to perfect the combustion engine a century later; we are entering a race where the starting pistol was fired only a decade ago.

The numbers back this ambition. While India’s EV market is nascent and was valued at approximately $4bn in 2024, it is projected to grow at a compound annual growth rate of 19%, potentially reaching nearly $18bn by 2032.

The India Way

To become a hub, India cannot simply copy the Chinese playbook. Beijing’s dominance was built on massive state-sponsored capital deployment, controlling the entire value chain—from lithium mines in Africa to battery gigafactories in Shenzhen.

India’s journey will look different in four ways with the first and foremost being a 'bottom-up' electrification. Unlike the US or China, where electrification started with premium electric cars (Tesla Model S or BYD), India’s revolution is happening in commercial light EVs. The focus is on two- and three-wheelers, which constitute 80% of India’s vehicle market. So, it makes sense that India is building the world’s most efficient, low-cost EV ecosystem. This 'frugal engineering' is exportable to the entire Global South—Africa, Latin America and Southeast Asia.

Secondly, our immediate win isn’t just in rolling out cars, but in becoming a global supplier of components. As global companies pursue a China Plus One strategy to derisk supply chains, India is positioned to become a hub for motors, controllers and battery-management systems. With the auto-component industry already positioned as an export champion, pivoting it to EV hard tech is the next logical step.

Then comes our unique leverage—software talent. Modern EVs rely heavily on battery analytics, range prediction and grid integration. And these are the domains where tech hubs like Bengaluru and Pune excel.

Lastly, commercial vehicles (CVs) constitute just 10% of the car park, but consume over 70% of the fuel, hence showing a higher operating leverage. India can prioritise electrifying CVs to not just reduce vehicular pollution and dependence on oil imports but to also deliver superior return on capital.

Reality Check

We must be realistic. Competing with China is not a battle of equals, yet. More critically, China controls the raw materials. India imports over 85% of its lithium-ion battery requirements from China.

To compete, India needs a strategy of strategic autonomy through alliances. We cannot mine our way to dominance overnight, so we must partner. The discovery of lithium reserves in Jammu and Kashmir is a start, but we need aggressive diplomatic alliances for critical minerals with nations like Australia and Chile, bypassing the Chinese monopoly where possible.

For India to leapfrog, the government’s production-linked incentive (PLI) schemes for advanced chemistry cells and auto components are crucial. These schemes, worth billions, are designed to force localisation. But money isn't enough.

To hit these targets and become a global hub, certain shifts must happen. Firstly, we must stop celebrating 'screwdriver technology' where we merely assemble imported Chinese kits. Real value is in owning critical intellectual property, including battery chemistry and drivetrain.

The other shift that needs to happen is tackling the charging infrastructure bottleneck head on. With only around 29,000 public charging stations, charging networks should be treated as critical national infrastructure, much like highways or 5G. A far more capital-efficient way to create a charging network is by creating an infrastructure for commercial EVs for captive demand.

The industry fears flip-flops in government policies. Subsidies like Faster Adoption and Manufacture of Electric Vehicles/PM Electric Drive Revolution in Innovative Vehicle Enhancement are great, but long-term tax road maps allow global original equipment manufacturers to commit the billions of dollars required for hard-tech factories.

A High-Stakes Bet

The shift to EVs is not just about changing engines; it is about cementing our place in the global value chain. If we anchor our production around this new age hard tech, leveraging our software prowess, scale in light vehicle mobility and a geopolitical tailwind, we won’t just be catching up. We will be charting a new course for the developing world. The 1990s belonged to Chinese manufacturing; the 2030s could well belong to Indian hard tech, if we are brave enough to take the wheel.

(The writer is founder, AdvantEdge Founders)