India Projected To Become Fourth-Largest EV Manufacturer By 2030: Report

(MENAFN- KNN India) New Delhi, Jun 21 (KNN) India is poised to become the world's fourth-largest manufacturer of electric four-wheelers by 2030, trailing only China, Europe, and the United States, according to new research by the New York-based think tank Rhodium Group.

The country's planned electric vehicle (EV) manufacturing capacity is projected to rise more than tenfold-from 0.2 million units in 2024 to 2.5 million units by 2030.

Despite this substantial increase, India's projected domestic demand for electric cars in 2030-estimated to range between 0.4 million and 1.4 million units-will fall significantly short of this manufacturing capacity.

As a result, India could see an oversupply of between 1.1 and 2.1 million units, underscoring the importance of accessing export markets.

However, Rhodium cautions that Indian manufacturers must reduce costs substantially to compete globally, particularly against China.

Rhodium estimates that total car sales in India could reach 6 million units by the end of the decade. Depending on the pace of policy implementation and battery cost reductions, the share of electric vehicles in overall four-wheeler sales could range from 7 per cent to 23 per cent.

The projected manufacturing capacity of 2.5 million units comprises 0.2 million currently in operation, 0.3 million ready for deployment, 1.3 million under construction, and 0.7 million newly announced.

“This aligns with India's 'Make in India for the world' strategy,” the report states, adding that production must become more cost-competitive to facilitate exports.

In 2024–25, domestic EV market leaders Tata Motors, MG Motor, and Mahindra collectively accounted for nearly 90 per cent of electric car sales, according to the government's Vahan dashboard.

Globally, India's projected EV production will remain behind China (29 million units), the European Union (9 million), and the US (6 million).

Nonetheless, it is expected to surpass Japan and South Korea, making India the top EV manufacturing country outside the three major regions.

While Japan and South Korea currently have larger operational capacities-1.1 million and 0.5 million units, respectively-their expansion plans are limited, with projected 2030 capacities of 1.4 million and 1.9 million units, respectively.

The report highlights India's distinctive EV strategy, which blends industrial policy with market incentives and a protectionist approach.

Consumer subsidies are linked to increasing local content requirements, while manufacturers benefit from incentives for advanced battery and component production. Efforts to expand EV charging infrastructure have also gained traction.

India continues to maintain high import tariffs-ranging from 70 per cent to 100 per cent-on fully built electric vehicles to safeguard domestic manufacturing.

While this has helped scale up local production, it has also limited consumer choice and kept retail prices high. Nearly all EV production in India currently serves domestic demand.

Despite modest EV penetration of just 2 per cent in 2024, the report contrasts India's pace with countries like Vietnam, where EV adoption surged from 3 per cent in 2022 to 17 per cent in 2024, driven by strong domestic production from automaker VinFast.

In the battery segment, India is emerging as a key player, particularly in module production. Rhodium notes that the country is on track to become the largest module producer outside China, the US, and Europe.

Although most of this capacity is still under construction or newly announced, the rapid build-out signals strong momentum-albeit with associated delivery risks.

By 2030, India's battery cell production capacity is expected to trail behind global leaders-China (4,818 GWh), the US (1,169 GWh), and Europe (997 GWh)-but ahead of South Korea, Malaysia, and Japan.

India and the rest of the world are collectively expected to contribute 567 GWh, though a detailed regional breakdown was not provided.

The report concludes that India's ambitious push in EV manufacturing and battery production reflects a critical opportunity to position itself as a global hub, provided it addresses cost and infrastructure constraints effectively.

(KNN Bureau)

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