India's EV surge demands battery self-reliance: domestic manufacturing can cut costs, create jobs, and reduce import vulnerability, but success requires overcoming skill gaps, material constraints, and competition from subsidized global supply chains.
16 Nov 2025 | 3716 Views | By Pratik Kamdar, Neuron Energy
India’s electric vehicle revolution is well underway, but to sustain it, establishing a robust domestic battery manufacturing ecosystem is essential. While the country has recorded more than 4.4 million electric vehicles on its roads by August 2024, including around 950,000 in the first eight months of the year and a ...
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India’s electric vehicle revolution is well underway, but to sustain it, establishing a robust domestic battery manufacturing ecosystem is essential. While the country has recorded more than 4.4 million electric vehicles on its roads by August 2024, including around 950,000 in the first eight months of the year and a market penetration reaching 6.6%, the lion’s share of the battery value chain remains imported. To truly turn this tide, India must build home-grown manufacturers that can drive down costs, boost resilience and sharpen global competitiveness.
The Urgency Of Localisation
Battery cells and critical components currently account for nearly half the cost of an EV. Globally, much of this production is dominated by China, which controls a large proportion of materials, manufacturing and component supply. According to recent studies, despite ambitious aims, only about 13% of India’s battery-cell demand is projected to be met domestically by 2030. This heavy dependence on imports exposes India’s EV ambitions to supply-chain disruptions, cost volatility and external strategic pressures.
Why Home-Grown Manufacturing Matters
1. Cost competitiveness: Local production avoids the added burdens of import duties, logistics and currency risk. With scale and innovation, domestic manufacturers can bring down the cost per kWh and make EVs more affordable for Indian buyers. Studies suggest that India has the potential to reach large-scale domestic capacity—one forecast sees demand rising to 139 GWh by 2035 if localisation gathers pace.
2. Supply-chain resilience: Import dependence leaves the industry vulnerable. Past disruptions (pandemic, geopolitical tensions) have shown how fragile global supply chains can be. Having local cell, module and pack manufacturers strengthens resilience and ensures continuity of EV roll-out.
3. Value-chain capture and jobs: By building local manufacturing, India captures more of the value within its economy rather than shipping raw parts abroad. That translates into domestic R&D, skilled jobs, and innovation clusters. A recent assessment noted that unless high-value segments (cells, raw materials, equipment) are indigenised, India risks remaining dependent and undervalued.
4. Global export potential: With the right scale, quality and cost-structure, Indian-built battery cells could serve not only domestic demand but export markets too. That elevates India from a consumption market to a manufacturing hub.
Key Challenges to Overcome
Yet, despite strong intent, localisation has not matured at the pace envisioned. A recent industry assessment identified six structural hurdles: shortage of skilled labour across the battery value chain; absence of accredited testing and validation centres; heavy reliance on imported critical minerals; lack of a robust recycling ecosystem; stringent ESG compliance requirements in global markets; and high import dependence for key manufacturing equipment. Moreover, a global oversupply, especially from China, has increased price pressures and elevated execution risks for large-scale Indian projects.
Material sourcing remains another critical challenge. While the discovery of lithium is promising, India still lacks large-scale refining and processing capacity to turn raw deposits into usable inputs. The constraint extends beyond lithium — rare earth elements such as neodymium, dysprosium, and praseodymium, essential for high-performance EV motors, are almost entirely imported. Unless India strengthens its ecosystem across skills, materials, and manufacturing scale, domestic producers will struggle to compete on both cost and technology with global incumbents.
Building the Future, Not Just Assembling It
With India’s EV market projected to reach USD 113.99 billion by 2029, the focus must now shift from assembling vehicles to owning the technology that powers them. As adoption accelerates, particularly in the two- and three-wheeler segments, the battery remains the linchpin of cost, performance, and competitiveness. Continued dependence on imported cells will expose manufacturers to cost volatility, supply bottlenecks, and weaker global positioning.
Conversely, a home-grown battery manufacturing base can redefine the landscape. It offers control over production costs, fosters innovation suited to Indian conditions, and creates the foundation for export-led growth. This is the moment for India to transition from “Make in India” to “Innovate in India,” ensuring that the energy propelling its mobility revolution is not just assembled locally but powered by technology born and built in India.
Pratik Kamdar is the Co-Founder and CEO of Neuron Energy. Views expressed are the author's personal.