India is poised to become a global leader in electric vehicle (EV) manufacturing, with its electric four-wheeler production capacity expected to surge tenfold by 2030. According to a new report by the Rhodium Group, India’s EV manufacturing capacity will rise from just 0.2 million units in 2024 to 25 lakh (2.5 million) units by 2030, making it the fourth-largest electric car producer globally, after China, Europe, and the United States.
India’s EV Manufacturing Boom to Outpace Domestic Demand
Rhodium Group’s Global Clean Investment Monitor highlights that India's manufacturing capacity is likely to exceed domestic demand by 11 to 21 lakh units within the next five years. The country’s projected electric car demand is estimated at 4 to 14 lakh units by 2030, up from 1 lakh in 2024. This implies significant EV export potential, especially as global markets seek alternatives to Chinese EVs.
EV Penetration in India: Between 7%–23% by 2030
India currently sells around 60 lakh cars annually, and electric vehicles are expected to account for 7% to 23% of total car sales by 2030. This underscores rapid growth from just 2% EV penetration in 2024. However, the supply-demand gap also emphasizes the need for cost competitiveness, especially when targeting export markets.
India’s EV Production Capacity: Global Comparison
By 2030, India’s EV production will trail only:
- China: 2.9 crore units
- European Union: 90 lakh units
- United States: 60 lakh units
India will surpass Japan and South Korea in anticipated capacity, emerging as the leading EV production hub outside the top three.
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Key Players in India’s EV Market
Tata Motors, MG Motor, and Mahindra currently dominate the Indian electric car space, holding a combined market share of nearly 90% (as per Vahan dashboard data from the previous financial year). These legacy automakers are expected to play a critical role in scaling domestic production and capturing global opportunities.
Policy-Driven Growth and Protectionism Fuel India’s EV Industry
India’s EV growth strategy relies on a unique blend of industrial policy, market incentives, and trade protectionism. Key initiatives include:
- High import duties (up to 100%) on fully built EVs
- Subsidies tied to localization targets
- Production-linked incentives (PLIs) for battery and EV components
- Expansion of charging infrastructure
While this has accelerated local EV production, it has also limited consumer choice and kept vehicle prices high.
India’s Rising Role in Global Battery Manufacturing
India is also becoming a prominent player in battery manufacturing, especially in modules and cells. The report notes:
- India is set to be the largest module producer outside of China, the US, and Europe
- Rapid growth is underway, though largely from announced or under-construction projects
- By 2030, India will outpace South Korea, Japan, and Malaysia in battery cell capacity, though still trailing behind China, the US, Europe, and Canada
Vietnam Outpaces India in EV Adoption
Despite India’s manufacturing boom, domestic EV adoption remains low. For comparison, Vietnam’s EV penetration rose from 3% in 2022 to 17% in 2024, driven largely by local automaker VinFast. India, on the other hand, still lags with a modest 2% penetration.
India’s EV Future Hinges on Cost Reduction and Global Competitiveness
India’s ambitious growth in electric four-wheeler manufacturing positions it as a global EV hub by 2030. However, to fully capitalize on this capacity, especially through EV exports, Indian manufacturers must focus on cost reduction, supply chain resilience, and continued government support.
