Quick Highlights:India’s EV sales are projected to reach 22 million units by 2035 with over 50% penetration across vehicle segmentsTwo-wheelers dominate EV adoption, while premium electric cars with 500 km range gain momentumCritical mineral supply chains face geopolitical, pricing, and concentration risks, especially due to China’s dominanceIndia is pursuing overseas mining, domestic processing, recycling, and technology innovation to secure EV raw materialsIndia’s electric vehicle market is on track for exponential growth, with annual sales projected to reach 22 million units by 2035, according to a new report by KPMG Assurance and Consulting Services LLP. The report, titled “Securing the Supply Chain: Preparing for the Electric Vehicle Raw Material Challenge,” highlights both the scale of India’s EV opportunity and the critical supply chain vulnerabilities that could shape the country’s clean mobility transition.KPMG estimates that EV penetration will cross 50 per cent across most vehicle segments by 2035, driven by falling costs, improving technology, policy support, and expanding charging infrastructure. India’s EV sales reached approximately 1.5 million units in FY25, marking a sharp rise in penetration from just 0.7 per cent in 2020 to nearly 5.9 per cent in 2025. This rapid adoption underscores the momentum behind electric mobility as a cornerstone of India’s decarbonization strategy.The two-wheeler segment continues to dominate India’s EV landscape, accounting for nearly 80 to 85 per cent of total EV sales. Affordability, suitability for urban commuting, and lower operating costs have made electric scooters and motorcycles the preferred entry point for consumers. Meanwhile, the passenger vehicle segment is gaining traction, particularly at the premium end of the market. By mid-2025, electric cars offering driving ranges above 500 kilometers accounted for around 27 per cent of EV passenger vehicle sales, reflecting growing consumer confidence in performance and range.From a cost perspective, EVs already offer a total cost of ownership advantage over internal combustion engine vehicles in multiple categories, including two-wheelers, three-wheelers, and intracity buses. For four-wheelers, cost parity has been achieved in commercial applications such as fleet and ride-hailing services, and KPMG expects parity for personal vehicles before the end of the decade as battery costs continue to decline.Supporting this growth is a rapid expansion of public charging infrastructure. The number of charging stations in India has increased from roughly 5,000 in 2022 to more than 26,000 by early 2025. Government initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and the PM E-DRIVE program have played a central role in accelerating adoption. PM E-DRIVE, launched in September 2024 with an outlay of INR 10,900 crore, aims to strengthen demand incentives, charging networks, and domestic manufacturing.However, the report cautions that India’s EV ambitions face significant risks from global supply chain dependencies, particularly for critical minerals used in batteries and electric motors. On average, electric vehicles require nearly six times more mineral inputs than conventional vehicles, largely due to battery systems. Lithium, cobalt, nickel, graphite, and rare earth elements are essential components, yet their global supply is highly concentrated geographically.Lithium production is dominated by Australia, Chile, and Argentina, while cobalt and nickel supplies are concentrated in the Democratic Republic of Congo and Indonesia. China plays a particularly dominant role in processing, controlling 70 to 80 per cent of global lithium and cobalt refining, around 30 per cent of nickel processing, and nearly 90 per cent of rare earth element separation capacity. Recent export restrictions imposed by China on several critical minerals between late 2024 and early 2025 have heightened concerns about supply security and geopolitical risks.Price volatility further complicates the landscape. Over the past five years, lithium, cobalt, and nickel prices have fluctuated sharply due to geopolitical tensions, pandemic-related disruptions, and surging EV demand. Lithium prices surged nearly eightfold during FY22 before declining by more than 80 per cent since 2023, creating uncertainty for manufacturers and investors alike.India does possess mineral-bearing resources for lithium, cobalt, and nickel, but these remain largely unproven or underdeveloped. Lithium resources estimated at 5.9 million tonnes have been identified in Jammu and Kashmir, though they are currently classified as inferred. The country also has estimated mineral-bearing resources of 45 million tonnes of cobalt and 189 million tonnes of nickel. In the case of rare earth elements, India holds the world’s third-largest reserves after China and Brazil, yet contributes less than 1 per cent to global production due to limited mining and processing capacity.To address these challenges, the KPMG report outlines a four-pronged strategy for India that combines short-term supply security with medium- and long-term domestic capability building. In the near term, India is focusing on securing overseas mineral assets through government-to-government agreements and trade partnerships with mineral-rich countries. A dedicated company under the Ministry of Mines has been established to acquire overseas assets, with strategic collaborations underway with Argentina for lithium block development and with Australia’s Critical Mineral Office.Medium-term priorities include scaling domestic processing capabilities for battery-grade materials, expanding recycling infrastructure, and establishing mineral parks. Policy measures such as the National Critical Mineral Mission, launched in January 2025 with an allocation of INR 16,300 crore, are expected to catalyze public sector investments of around INR 18,000 crore between FY25 and FY31. Battery Waste Management Rules and a proposed INR 1,500 crore recycling incentive scheme aim to strengthen India’s circular economy for EV materials.Technological innovation is also reducing dependence on scarce resources. Lithium Iron Phosphate batteries have grown from under 10 per cent market share in 2020 to nearly 50 per cent by 2024, lowering reliance on cobalt and nickel. Sodium-ion batteries are emerging as a promising option for low-cost EVs and stationary storage, while solid-state batteries are expected to enter commercial production by 2027. Advances in magnet-free motor technologies are further reducing dependence on rare earth elements.Looking ahead, KPMG concludes that electric vehicles represent the most practical and scalable pathway for India’s clean mobility transition, outperforming hybrids and hydrogen fuel cell vehicles in terms of cost, infrastructure readiness, and emissions reduction. The EV transition is expected to drive a 20 to 30 per cent increase in renewable electricity generation by 2035, reinforcing the need for integrated planning across energy, mining, manufacturing, and recycling ecosystems.