With a heavy subsidy drive and adoption curve growth, very soon, Indian-made EVs with indigenous batteries, rare earth alternatives, and electrical components, will be a reality

As per Niti Aayog’s report, there will be over 6.5 million EVs on Indian roads in 2025. The demand for EVs has started going upwards of two million since 2024.

To transition the 18% of the country’s citizens relying on buses, metro, and rail—with ₹82,000 crore funding—the government introduced city electric bus operations under the National Electric Bus Program (NEBP). A fleet of 50,000 electric buses on the roads by 2027 is the goal. This initiative is on a Public Private Partnership (PPP) model and has brought together multiple State Transport Undertakings (STUs) and private operators. Under the Prime Minister’s E-drive revolution launched by the Ministry of Heavy Industries, a demand incentive will be given to those electric two-wheelers and electric three-wheelers registered for commercial purposes, privately-owned and corporate-owned at the time of purchase.

In addition to central subsidies—states have set aside dedicated budgets to improve EV transport, infrastructure and ridership. On the other hand, supportive policies and growing operational efficiencies have made legacy automakers like Tata Motors, MG Motors, Mahindra, Volvo in the four-wheeler segment, and Hero MotoCorp, Bajaj Auto in the two-wheeler segment, Piaggio, and Mahindra Electric in the three-wheeler cargo categories pivot to EV already.

In case of e-buses, the Gross Cost Contract (GCC) model, in which the supplier handles operation and maintenance of buses, promotes Make in India, reinforces industry commitment toward design, development, and manufacturing, says Mahesh Babu, CEO, Switch Mobility, a subsidiary of Ashok Leyland. “With the infrastructure typically captive and purpose-built, it further promotes independency,” he tells us. Switch Mobility has over 1,200 electric buses in operation and a confirmed order book exceeding 1,400 units.

In commercial and personal vehicles, the adoption curve is quite clear, with heavy penetration happening in two-, three-, and four-wheeler segments, says Tushar Bohra, Founder of EvyEnergy (Acquired), a charging company. “Among these, the two-wheeler sales have surged because the upfront cost is almost equal to its ICE counterpart, and the fuel cost slashes down to 1/5th of that. EV financing is also boosting the passenger vehicle segment,” he tells us.

For four-wheelers and heavy-duty, Jalaj Gupta, MD, Montra Electric, part of the Murugappa Group, gives us the status. “From urban delivery operators adopting our electric three-wheeler, Super Cargo, to fleet partners piloting our e-SCV, EViator and even heavy haulage customers running the Rhino, the market response has been encouraging. PM E-Drive, which now includes support for electric trucks, remain pivotal in accelerating the much-needed push for medium and heavy commercial EVs to gain scale.”

EVs: an owner’s pride?

Approximately one out of 100 people in India owns an electric vehicle. EV ownership is the most committed category of vehicle ownership. Mamta Ghosh, a teacher who has been doing city centre motoring in her Hero MotoCorp V1-Vida two-wheelers for the last few months, back and forth from Kasba, to Alipur and Salt Lake, says she bought the EV because it aligned with her personal values. “I used to drive to work on a bicycle. Though the display conks off on rainy days, so does the software, we are glad we upgraded and made the investment in an EV. It certainly needs a lot of attention and continuous learning to be an EV driver.”

EV owners are a separate tribe by themselves whose world constantly keeps evolving with ups and downs. WhatsApp, Reddit, and Telegram chats ring loud with their constant interaction about travel-readiness, road anxieties, and useful worldviews.

Early adopter and EV-logger Priyans M, Founder of ExpwithEVs, a research and media company, has turned his passion for EVs into his profession as well. Priyans owns an MG ZS and a TATA Tiago and has covered 81,000 km in both. He has catalogued his driving experiences along with the challenges he faced on his blog. According to Priyans, the market for EVs is maturing. “My MG gave me 400 kilometres initially; now, after four years, and driving over 70,000 km, it gives me 396 kilometres. The charging infra has certainly improved; from 1,500, now there are 10,000 charging stations,” he explains.

Consumer expectations are still benchmarked against ICE vehicles. To boost the transition, manufacturers need to move beyond SUVs and offer more variety in sedans, micro cars and utility vehicles.

Localisation is the key

Though the personal vehicles segment growth is still sluggish, manufacturers are bullish, banking on native tech expertise and workforce skill to gain scale. Building localisation, on par with ICE vehicles, is the much-needed decree to gain market share and handle issues on the EV value chain such as China’s import ban on battery cells and electronic components.

From powertrains, motor and battery control systems, chassis, and telematics, heavy capital expenditure is invested in building the core platforms in India. So far, according to the PwC report, through limited value addition on some components, OEMs have been able to drive only Tier-1 localisation. Tier2/3 is yet to be achieved.

This is because of the nature of the components. Though the PLI scheme aims to build 50 Wh battery cell manufacturing capacity with 60% value addition in the next five years, Indian manufacturers are still at the cell chemistry R&D stage and haven’t arrived at the exact composition that will balance performance and energy density requirements yet. Except for some start-ups in the motor manufacturing space, there is still a lot of Chinese dependence on electrical and electronic components, states the report.

Most brands view the situation not as a roadblock but as an opportunity to innovate, indigenise and build an ecosystem. “Localisation isn’t just a cost play for us, it’s about long-term strategic control over quality, supply chain, and performance,” Gupta asserts. Montra Electric is already exploring alternate motor technologies that eliminate the use of rare earths, he tells us.

“A structured national approach with a clear short-, mid-, and long-term roadmap and a strong push through public-private partnerships is essential to solving the rare-earth challenge and building a resilient and sustainable supply chain. While exploration is key, recycling will play an equally critical role, especially in the medium to long term,” notes Mahesh Babu.

The timing is right

Despite the challenges, whether it’s a passenger vehicle, delivery fleet or a heavy-haul application, the market is at a flex point right now when improved economic viability, environmental consciousness are accelerating the demand and the technology, manufacturing capacity and charging infrastructure are slowly scaling. Once the ecosystem matures, the market is expected to be mainstream in no time.

With a central warehouse and manufacturing plant in Chennai, Switch Mobility operates through 60+ appointed dealers across India and 120+ touchpoints. Montra Electric has a fully automated battery-pack facility for heavy commercial vehicles with an all-women workforce.

“With its expertise in software and embedded systems, India has the potential to become the second-largest EV market in the world with a significant contribution to the global market,” says Mahesh Babu.

Gupta cites a clear opportunity to steer ahead. “If policy coverage is extended to electric heavy commercial vehicles and electric tractors, it would unlock major opportunities in freight, heavy last-mile deliveries, and agriculture--segments where EVs already offer strong cost advantages.”

Clean mobility is a commitment

Solid-state batteries, synthetic fuel, and rare-earth alternative—the EV market is on a non-stop spin. But to stabilise and for buyers to make EVs their primary vehicle option, it needs some basic corrections.

“For better utilisation, the core economics of charging stations should change. The business model should move from cheap imported Chinese chargers and cloud-based app operations,” says Bohra.

“Home solar has the potential to catch up. In fact, many companies are already filing tenders, and there is viability gap funding for this project in India. Once limitations on body types of EVs multiply, the second-hand market will also take off, says Priyans.

Cost is a non-issue for buyers. “Once you decide to buy, you do it anyway. When you buy a horse, you buy a lagaan for it too,” Mamta explains metaphorically.

“Long-term EV adoption will rest more on vehicle economics,” Gupta shares his conviction. To gain an edge and permanent ridership, engineering products with a compelling operating advantage, high uptime, fast charging, advanced telematics, and robust warranties will make the choice strategic and worthwhile,” he concludes.