Mobility, Energy and Transportation
Driving Self-Reliance - Localizing EV Components in India
17 Jun 2025
Comparison
of EV and ICE componentsThe
auto component sector, a longstanding pillar of India’s manufacturing and
export strength, is navigating rapid transformation with the rise of EVs.
Traditional manufacturers are adapting quickly to evolving OEM demands as value
chains shift to support new technologies. Unlike ICE vehicles, EVs rely on a
different architecture, with high-cost components like the battery pack, BMS,
electric motor, and power electronics—most of which are still import-dependent.
While parts like the chassis and body tap into existing supply chains,
EV-specific technologies and infrastructure, such as charging systems, call for
new manufacturing capabilities and deeper domestic integration (Exhibit 1).
Exhibit 1: EV vs ICE components
Market
opportunity
In FY24,
EV components reached US$ 4B, reflecting their growing share in the auto
component market. By FY30, the total market is projected to hit US$ 206B, with
EVs contributing over 22%, and charging equipment alone comprising 10% (Exhibit
2). As EVs age and batteries approach the end of their 5–6-year shelf life, the
aftermarket for replacements is expected to grow, though current demand remains
low due to warranty coverage.
Exhibit
2: Auto component and EV-auto component
opportunity size
Yet
despite this opportunity, India continues to depend heavily on imports for key
components such as semiconductors, BMS, motors, and battery cells. This leaves
OEMs vulnerable to global supply disruptions and pricing volatility.
Localization is therefore a strategic necessity. Components such as BMS and
power electronics offer meaningful localization potential, while others like
battery cells and electric motors remain more constrained - though this may
shift with changing geopolitical dynamics, China+1 strategies, and targeted
investments (Exhibit 3).
Exhibit
3: List of all EV
components
Electric
motors, for instance, are largely import-dependent due to the lack of local
sources for rare earth magnets, with supplies mainly coming from China and
Japan. Similarly, power electronics - which involve technology-intensive
manufacturing and high capital investments - are currently sourced from China,
though localization efforts have begun, few examples of which are discussed
below. (Exhibit 4).
Exhibit
4: EV components localization potential
Meanwhile,
components like HVAC systems, control units, and lighting have achieved
moderate localization. Indian manufacturers are well-positioned in these
categories, although some subcomponents are still imported. Initiatives like
Valeo India's expansion of its facilities in Pune and Sanand are aimed at
boosting local production of BMS, lighting systems, thermal components, and
powertrains - signifying an encouraging step forward (Exhibit 5).
Exhibit
5: Investments and initiatives by players to
localize the supply chain
Nonetheless,
battery cells remain a major bottleneck. Despite rising investments, India's
reliance on imported battery cells underscores the additional efforts required
to build a resilient and self-reliant EV component ecosystem.
In
conclusion, while localization of EV components in India presents challenges - particularly
for high-tech elements like battery cells and power electronics - the
opportunity is undeniable. A concerted push by industry
stakeholders, supported by policy direction and strategic investments, can help
reduce external dependencies and build a more self-reliant, future-ready auto
component ecosystem.
For a deeper dive in
the EV component landscape in India, refer to the full report – Electrify30:
The Future of Mobility by Praxis Global Alliance