Inside India's $25.6 Billion Push To Build Core EV Tech, Cut Imports

India's electric vehicle (EV) story is entering a new chapter.

For years, the focus was on getting more EVs on Indian roads through subsidies and incentives. Now, the government wants something bigger. It wants India to build the technology that powers those vehicles instead of importing it.

That ambition is backed by nearly Rs 2.2 lakh crore (US$25.6 billion) worth of policy support through schemes such as the Rs 10,900 crore PM E-Drive Scheme, the Rs 25,938 crore Production Linked Incentive (PLI) Scheme for Automobile and Auto Components, and the Rs 18,100 crore PLI Scheme for Advanced Chemistry Cells (ACC). Together, these programmes aim to strengthen domestic manufacturing of batteries, motors, electronics and other critical EV components while reducing India's dependence on imports.

India's EV Story: Next Phase Of Growth

India's EV market is growing rapidly, with industry estimates suggesting that electric vehicle sales crossed 2 million units in FY25. But experts say the next battle will not be about selling more EVs. It will be about owning the technology behind them.

"India's ambition to become a global electric vehicle manufacturing hub will ultimately depend not only on vehicle assembly but on its ability to develop and manufacture core technologies domestically," said Piyush Verma, Co-Founder and CTO of Naxatra Labs. According to Verma, government initiatives such as the PM E-Drive Scheme, the ACC PLI and the Auto PLI signal a strategic shift from import dependence to indigenous innovation.

"The next phase of growth will be determined by local capabilities in motors, power electronics, battery systems and embedded software," he said.

Building In India

Instead of adapting imported designs, Indian companies are now building products specifically for local conditions. Verma said an electric three-wheeler carrying heavy loads on broken roads in 45-degree heat has vastly different performance requirements from vehicles designed for Chinese cities.

"The real shift underway now is that Indian companies are designing core powertrain technology for Indian duty cycles, not adapting Chinese designs built for different markets," he said.

At Naxatra Labs, the company develops motors and controllers entirely in India for two-wheelers, three-wheelers, agricultural equipment and industrial applications. Verma said OEMs are increasingly replacing imported powertrains with locally designed alternatives because they better match Indian operating conditions.

Localisation Far From Complete

"The harder truth is that design localisation is only half the battle," Verma said. Critical areas such as magnet supply chains, semiconductor-grade power electronics and precision manufacturing equipment still require years of investment.

He believes the next phase should focus on patient capital, faster testing and certification infrastructure, and greater willingness among vehicle manufacturers to qualify Indian suppliers instead of relying on established import channels.

That view is echoed by Sanyam Gandhi, Whole-time Director of electric public mobility company Chartered Speed. "India has made significant progress in electric vehicle adoption, but the next phase of growth will depend on how successfully we localise the EV value chain," Gandhi said.

He added that indigenous capabilities in electric motors, motor controllers, battery management systems and power electronics would reduce import dependence, improve supply chain resilience and lower long-term costs.

"Localisation also means better service support, faster availability of spare parts and lower lifecycle costs, ultimately improving fleet reliability and operational efficiency," Gandhi said.

Homegrown innovation also makes Indian products more competitive globally. "Products designed and manufactured in India are better suited to our operating environment," Gandhi said, pointing to India's extreme weather, difficult roads and high vehicle utilisation.

India's Biggest Export Advantage

"The same cost discipline and ruggedisation that Indian conditions force upon us make Indian powertrains genuinely competitive in Africa, Southeast Asia and Latin America," said Verma.

Yet scaling advanced EV technologies remains capital-intensive. According to Gandhi, manufacturers need sustained investment in research and development, stronger testing infrastructure and long-term demand visibility. He also called for closer collaboration between OEMs, component manufacturers, fleet operators, research institutions and policymakers to accelerate innovation.

Public transport will also play a critical role.  "The long-term success of electric mobility will depend not only on the number of vehicles produced but also on the strength of the ecosystem that supports them," Gandhi said. Reliable components, charging infrastructure, skilled manpower and after-sales support, he added, are all essential for building affordable and scalable electric public transport.

Government policies have already created strong demand momentum. Schemes such as PM e-Bus Sewa and PM E-Drive are supporting electric buses, charging infrastructure and domestic manufacturing while encouraging higher local value addition across the supply chain.

According to Naveen Gupta, Founder TrevMobility, the next phase of growth will depend on building a robust domestic ecosystem around it. "As India scales EV adoption, stronger collaboration between component manufacturers, OEMs, charging infrastructure providers, and fleet operators will be critical. Building core technologies in India will not only strengthen supply chain resilience but also help create solutions that are better suited to Indian operating conditions and high-utilisation mobility use cases," added Gupta.