India’s EV Industry Shifts Focus to Homegrown Technology and Manufacturing
India’s electric vehicle (EV) industry is entering a new phase. After years of focusing on increasing EV adoption through subsidies and incentives, attention is now shifting towards building the technology that powers electric vehicles within the country. The government’s strategy aims to reduce import dependence while establishing India as a global hub for EV manufacturing and innovation.
This ambition is supported by nearly Rs 2.2 lakh crore (US$25.6 billion) in policy measures. These include the Rs 10,900 crore PM E-Drive Scheme, the Rs 25,938 crore Production Linked Incentive (PLI) Scheme for Automobile and Auto Components, and the Rs 18,100 crore PLI Scheme for Advanced Chemistry Cells (ACC). Together, these initiatives seek to strengthen domestic production of batteries, electric motors, power electronics and other critical EV components while encouraging indigenous innovation.
India’s EV Industry Enters Its Next Growth Phase
India’s EV market continues to expand rapidly, with industry estimates indicating that electric vehicle sales surpassed 2 million units in FY25. However, industry leaders believe the next stage of growth will depend less on vehicle sales and more on developing the technologies that power them.
“India’s ambition to become a global electric vehicle manufacturing hub will ultimately depend not only on vehicle assembly but on its ability to develop and manufacture core technologies domestically,” said Piyush Verma, Co-Founder and CTO of Naxatra Labs.
According to Verma, government initiatives such as the PM E-Drive Scheme, the ACC PLI and the Auto PLI represent a strategic shift away from import dependence towards indigenous capability.
“The next phase of growth will be determined by local capabilities in motors, power electronics, battery systems and embedded software,” he said.
Designing EV Technology for Indian Conditions
Rather than adapting imported technologies, Indian companies are increasingly designing products specifically for local operating conditions. Verma noted that electric vehicles operating in India face challenges that differ significantly from those in overseas markets.
An electric three-wheeler carrying heavy loads on uneven roads in temperatures exceeding 45 degrees Celsius requires a very different powertrain from one designed for urban environments elsewhere. Consequently, manufacturers are focusing on developing solutions tailored to Indian duty cycles.
“The real shift underway now is that Indian companies are designing core powertrain technology for Indian duty cycles, not adapting Chinese designs built for different markets,” Verma said.
At Naxatra Labs, motors and controllers are developed entirely in India for electric two-wheelers, three-wheelers, agricultural machinery and industrial applications. According to Verma, original equipment manufacturers (OEMs) are increasingly replacing imported powertrains with locally designed alternatives because they better suit Indian operating conditions.
Localisation Still Has a Long Way to Go
Despite this progress, industry experts believe localisation remains incomplete.
“The harder truth is that design localisation is only half the battle,” Verma said, pointing to continued dependence on imports for permanent magnets, semiconductor-grade power electronics and precision manufacturing equipment.
He believes the next stage should prioritise long-term investment, faster testing and certification infrastructure, and greater willingness among vehicle manufacturers to qualify domestic suppliers instead of relying on established import networks.
Sanyam Gandhi, Whole-time Director of electric public mobility company Chartered Speed, shares a similar view.
“India has made significant progress in electric vehicle adoption, but the next phase of growth will depend on how successfully we localise the EV value chain,” Gandhi said.
He added that developing domestic capabilities in electric motors, motor controllers, battery management systems and power electronics would reduce import dependence, strengthen supply chains and lower long-term costs.
“Localisation also means better service support, faster availability of spare parts and lower lifecycle costs, ultimately improving fleet reliability and operational efficiency,” Gandhi said.
He also noted that products engineered for India’s demanding operating environment are likely to be more competitive in global markets.
India Eyes Global EV Export Opportunities
Verma believes the same engineering discipline required for India’s challenging operating conditions can become a competitive advantage internationally.
“The same cost discipline and ruggedisation that Indian conditions force upon us make Indian powertrains genuinely competitive in Africa, Southeast Asia and Latin America,” he said.
However, scaling advanced EV technologies remains capital-intensive. Gandhi said manufacturers will require sustained investment in research and development, stronger testing infrastructure and long-term demand visibility. He also called for deeper collaboration among OEMs, component manufacturers, fleet operators, research institutions and policymakers to accelerate innovation.
Public transport is expected to play an equally important role.
“The long-term success of electric mobility will depend not only on the number of vehicles produced but also on the strength of the ecosystem that supports them,” Gandhi said. He added that reliable components, charging infrastructure, skilled manpower and after-sales support are essential for building affordable and scalable electric public transport systems.
Government initiatives such as PM e-Bus Sewa and PM E-Drive are already supporting electric buses, charging infrastructure and domestic manufacturing while encouraging greater local value addition throughout the EV supply chain.
Naveen Gupta, Founder of TrevMobility, said the next phase of India’s EV journey will depend on building a stronger domestic ecosystem.
“As India scales EV adoption, stronger collaboration between component manufacturers, OEMs, charging infrastructure providers and fleet operators will be critical. Building core technologies in India will not only strengthen supply chain resilience but also help create solutions that are better suited to Indian operating conditions and high-utilisation mobility use cases,” Gupta said.
With inputs from Reuters