Critical EV parts may achieve significant localisation in India by 2030

Several critical components, including batteries, necessary for manufacturing electric vehicles (EVs) are anticipated to see substantial localisation in India by 2030, according to a Frost & Sullivan report. However, achieving 100% localisation in India is not feasible due to the scarcity of certain rare earth materials, limited lithium-ion mining, and low levels of electronics manufacturing.

India’s electric vehicle industry has made significant progress, bolstered by government subsidies, growing consumer acceptance, and increasing product launches. Factors such as an expanding product portfolio, enhanced charging infrastructure, better financing options, and a gradual reduction in battery prices are expected to further accelerate EV penetration across various segments in the coming years.

The auto components market for electric vehicles presents a vast opportunity. Production Linked Incentive (PLI) programmes for batteries are expected to boost battery manufacturing in India. Under this scheme, 67 applicants for the Component Champion Incentive scheme have been approved.

The new EV policy framework by the Indian government mandates that companies entering the EV manufacturing sector must establish facilities within three years and achieve a localisation threshold of 50% within five years.

Key components such as batteries are expected to reach a localisation level of 40-50% by 2030, up from 20-25% in 2023. Power and control wiring harnesses, along with connectors, could reach 60-70%, up from 15-35%, while AC charging inlet type-2 might achieve 70-80% localisation, rising from 35-50%.

Similarly, localisation in components like DC converters, MCBs, circuit breakers, electric safety devices (power electronics), electric compressors, and DC charging inlets could increase to 60-70% by 2030 from 0-30%, the report noted.

The main reason for the expected increase in the percentage of localisation is the fact that the majority of the global EV components suppliers have a presence in India and are looking forward to high volumes that will support the economies of scale. Therefore, global EV suppliers can leverage their expertise and support the Indian EV market, said Sathe.

As for two and three-wheelers are concerned India can develop its electric mobility ecosystem in about a decade but it will take longer time for India to develop capabilities in four-wheeler segment, it is pointed out.