India's electric vehicle (EV) market experienced significant growth in the past month, with total sales exceeding three lakh units across all vehicle types, marking a 63% year-on-year increase and representing about 12% of total auto sales, driven particularly by strong performance in electric passenger cars which saw a 106% surge compared to the previous year, signaling a maturing electric mobility story likely catalyzed by rising fuel prices. Despite the positive adoption trends and increasing domestic manufacturing efforts by companies like Tata and Mahindra, alongside foreign investment, India's EV manufacturing ecosystem remains heavily reliant on imported components, especially raw materials like battery cells, lithium, and semiconductors, primarily from China, which poses a strategic vulnerability as demand escalates and government initiatives like the ACC PLI scheme have faced challenges in meeting ambitious targets, while the development of crucial charging infrastructure also requires accelerated efforts through improved supply chain visibility and coordination.

India's electric vehicle (EV) market experienced significant growth in the past month, with total sales exceeding three lakh units across all vehicle types, marking a 63% year-on-year increase and representing about 12% of total auto sales, driven particularly by strong performance in electric passenger cars which saw a 106% surge compared to the previous year, signaling a maturing electric mobility story likely catalyzed by rising fuel prices. Despite the positive adoption trends and increasing domestic manufacturing efforts by companies like Tata and Mahindra, alongside foreign investment, India's EV manufacturing ecosystem remains heavily reliant on imported components, especially raw materials like battery cells, lithium, and semiconductors, primarily from China, which poses a strategic vulnerability as demand escalates and government initiatives like the ACC PLI scheme have faced challenges in meeting ambitious targets, while the development of crucial charging infrastructure also requires accelerated efforts through improved supply chain visibility and coordination.

India's electric vehicle (EV) market experienced significant growth in the past month, with total sales exceeding three lakh units across all vehicle types, marking a 63% year-on-year increase and representing about 12% of total auto sales, driven particularly by strong performance in electric passenger cars which saw a 106% surge compared to the previous year, signaling a maturing electric mobility story likely catalyzed by rising fuel prices. Despite the positive adoption trends and increasing domestic manufacturing efforts by companies like Tata and Mahindra, alongside foreign investment, India's EV manufacturing ecosystem remains heavily reliant on imported components, especially raw materials like battery cells, lithium, and semiconductors, primarily from China, which poses a strategic vulnerability as demand escalates and government initiatives like the ACC PLI scheme have faced challenges in meeting ambitious targets, while the development of crucial charging infrastructure also requires accelerated efforts through improved supply chain visibility and coordination.

Something curious happened at the beginning of this month. As vehicle sales data trickled in from across the country, it was evident that electric vehicles (EV) had a bumper month last month. Total sales crossed three lakh units across scooters, three-wheelers, cars and buses, which was a 63 per cent rise year-on-year. That amounted to about 12 per cent of the total auto sales cumulatively.

While two-wheelers have been growing steadily and electric three-wheelers are now dominant, it was the solid performance of electric passenger cars that warmed the cockles of stakeholders the most. The 31,000+ was not just an increase of 15% over the previous month (May itself was a new high), it was a whopping 106 per cent increase as far as June last year was concerned.

By all indications, not to discount the catalysing push that was the fuel price hike thanks to the chokehold of the Strait of Hormuz, India’s electric mobility story has come of age. But the question persists: What about its manufacturing ecosystem?

"With India recording 24 lakh EV sales last, including 84 per cent year-on-year growth in electric passenger vehicles, the conversation is rapidly shifting from vehicle adoption to building the infrastructure that can sustain this momentum,” said Sumit Kumar, founder and director, Headsup B2B, a supply chain platform that serves infra and renewable energy.

Kumar added, “At the same time, expanding this ecosystem requires overcoming procurement and supply chain challenges, from sourcing critical components to ensuring timely project execution.”

A lot needs to be done in that department, though. While Indian companies like Tatas and Mahindras are doing a roaring business and foreign marquee names like VinFast may have set up shop in the country (not to forget Suzuki also venturing forth), but the truth remains that a good chunk of India’s EV manufacturing ecosystem still depends on components import. And as demand surges, that dependence only seems to be increasing, despite all the government push through production-linked incentives in advanced cell chemistry (ACC). Motor and battery management systems are localising rapidly if some reports are to be believed, but raw materials still remain India’s Achilles’ heel — India is still heavily dependent on the People’s Republic next door for battery cells, lithium refining and semiconductor chips.

According to a recent PwC report, Indian manufacturers can help speed up the transition. “To begin with, OEMs will need to take strategic decisions to achieve a steady-state supply chain. This would entail balancing their insourcing plans and ecosystem-led collaboration,” said the report titled Winning the EV race through localisation: An India perspective. It also mentioned, “Our conversations with industry indicate evolving thinking on this dimension.”

However, the road is likely to be bumpy. “India’s push to reduce oil and gas import dependence through transport electrification risks creating a new strategic vulnerability: A heavy reliance on imported battery cells, largely from China,” said Charith Konda and Dhruv Garg in a report done for the Institute for Energy Economics and Financial Analysis.

In fact, the increasing demand for EVs may just be worsening it. “As battery demand surges from 28GWh in 2025 to a projected 272GWh by FY2030, that dependence is only set to deepen. Despite the government launching an ACC production-linked incentive (PLI) scheme in 2021 targeting 50GWh of domestic cell output by 2025, only 1.4GWh has been commissioned due to the scheme’s unrealistic targets and aggressive timelines,” Garg and Konda added.

While these challenges remain, it is evident that India’s road to electrification is fast resembling an expressway. But, how fast it can go will depend also on another crucial customer-facing barrier — the presence of charging infrastructure. “Technology-enabled procurement can significantly improve visibility, coordination, and speed across the value chain, helping accelerate charging infrastructure deployment and supporting India's transition to a cleaner, more resilient mobility ecosystem,” added Sumit.

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