Maruti Suzuki has launched the e-Vitara, its pioneering all-electric SUV, with a launch ceremony in Gujarat, India. The vehicle is expected to launch in the Indian market this September, but initially will be exported. This model is significant, marking Maruti’s entry into the EV space, currently dominated by Tata and Mahindra. A research report by the Rhodium Group estimates that by 2030, India’s EV manufacturing capacity could reach 2.5 million units per year. This represents a tenfold increase from the existing capacity of 200,000 units. If achieved, India would become the fourth largest EV manufacturer globally, after China, Europe, and the United States. However, the report emphasizes that India must reduce production costs to compete effectively in the international market.
The report indicates that by 2030, demand for EVs in India could range between 400,000 and 1.4 million units, exceeding production capacity. This surplus will allow for significant exports, which can only be achieved if Indian companies decrease costs to compete with major manufacturers. The government’s ‘Make in India for the World’ initiative is helping to drive EV growth, with companies such as Tata Motors, MG Motor, and Mahindra accounting for about 90% of the domestic EV market. For India to succeed in the global market, competitiveness in terms of cost, technological advancements, and scale of production is critical. China already possesses an advantage in terms of lower costs and high-volume EV production. Therefore, Indian companies must improve their technology, scale up production, and adopt cost-effective measures to be competitive in the international arena.
By 2030, India’s EV production capacity may reach 2.5 million units, placing it as the fourth-largest EV manufacturer in the world, outpacing Japan and South Korea. Japan currently has a production capacity of about 1.1 million units, and South Korea around 500,000 units, with plans progressing slowly. India is currently experiencing rapid expansion, with a production of 200,000 vehicles, and an additional 300,000-unit capacity set to commence. Furthermore, manufacturing facilities are being built for 1.3 million units, and new projects for 700,000 units have been announced, underscoring the rapid growth of India’s EV sector.
India is promoting the EV sector through a multi-pronged strategy. The government provides subsidies for EV purchases, and mandates local manufacturing. Incentives are offered to boost local battery and component manufacturing and enhance charging infrastructure. High import duties, ranging from 70% to 100%, on fully assembled foreign EVs, create an environment favorable for domestic production. This policy has resulted in almost all electric vehicles in India being manufactured by domestic companies.
India is also experiencing rapid growth in battery manufacturing. The country has become a key player in the manufacturing of both battery cells and modules. Projections suggest that by 2030, India’s battery cell manufacturing capacity could reach 567 GWh. This would position India fourth globally, after China, the United States, and Europe, and ahead of Korea, Japan, and Malaysia. However, the Rhodium report cautions that much of this growth is tied to projects either under construction or announced, posing potential risks if these projects aren’t completed in a timely fashion.
EV adoption in India lags behind other countries. In Vietnam, EV sales saw a significant rise, from 3% in 2022 to 17% in 2024. In India, electric car sales were only at 2% in 2024. Therefore, if India wants to boost its EV market, it requires consistent government policies. Furthermore, there is a need for affordable and well-designed vehicles, as well as positive user experiences, to foster the growth of India’s EV industry.