Maruti Suzuki’s e-Vitara, its first electric SUV, has been unveiled and flagged off from a Gujarat plant. The car is expected to launch in India this September, with initial exports planned. The e-Vitara marks a significant step for Maruti, entering the EV market currently dominated by Tata and Mahindra. A report from the Rhodium Group suggests that India’s EV manufacturing capacity could hit 2.5 million units annually by 2030, a tenfold increase from its current 200,000 units. This could place India as the fourth-largest EV producer globally, after China, Europe, and the United States. The report highlights the importance of lowering production costs to compete internationally, especially with China.
The report forecasts EV demand in India between 400,000 and 1.4 million units by 2030, exceeding production capacity. This surplus will lead to significant exports, but only if Indian companies can reduce costs to compete with global players. The ‘Make in India for the World’ initiative is driving the EV sector, with companies like Tata Motors, MG Motor, and Mahindra controlling about 90% of the domestic market. To succeed globally, India needs to focus on cost, technological advancement, and large-scale production, which are areas where China holds an advantage. Therefore, Indian companies need to improve technology, scale up production and find ways to lower costs to be competitive.
India’s EV production could reach 2.5 million units by 2030, making it the fourth-largest EV manufacturer globally, surpassing Japan and South Korea. Japan’s current capacity is around 1.1 million units, and South Korea’s is approximately 500,000 units, with their future plans being slow. India is growing rapidly, with current production at 200,000 vehicles and an additional 300,000 capacity in the pipeline. Factories are also being built for 1.3 million units, and 700,000 more units are in the planning stages, demonstrating the rapid expansion of India’s EV sector.
India’s approach to promoting EVs includes government subsidies to reduce costs and domestic manufacturing mandates. Incentives support local battery and component manufacturing, along with improved charging infrastructure. High import duties (70-100%) on fully assembled foreign EVs encourage local production. This has resulted in almost all EVs in India being manufactured by local companies.
India is also advancing in battery manufacturing, emerging as a key player in both battery cell and module production. The nation’s battery cell manufacturing capacity could reach 567 GWh by 2030, placing it fourth globally, behind China, the US, and Europe, and ahead of nations like Korea, Japan, and Malaysia. However, the Rhodium report notes that this growth depends heavily on the timely completion of ongoing or announced projects.
EV adoption in India is relatively slow, with sales at just 2% in 2024. Contrastingly, Vietnam saw EV adoption increase from 3% in 2022 to 17% in 2024. To boost EV adoption in India, the government needs to ensure clear and consistent policies, and reduce vehicle costs. A positive user experience, including driving and charging, is critical to the success of the Indian EV industry.