India may be winning the EV localisation race by volume while still lagging in value localisation Although automakers have significantly increased domestic sourcing across a range of components, industry stakeholders say the most strategic parts of an electric vehicle, from battery cells and power electronics to semiconductors and rare-earth magnets, continue to be imported. The result is an ecosystem that is becoming increasingly efficient at assembling EVs without fully controlling the technologies that power them.
The distinction is important because batteries alone account for roughly 35-45 per cent of an electric vehicle's total cost, while power electronics, motors and semiconductors contribute a further significant share. Industry observers note that these are also the components that determine vehicle performance, energy efficiency and intellectual property ownership, making them strategically more important than many mechanical parts.
The concerns around localisation are backed by recent industry data. According to a 2026 report by the International Institute for Sustainable Development (IISD), net localisation remains below 20 per cent for several high-value EV components, including battery cells, motors, DC-DC converters and on-board chargers, despite the rapid expansion of EV manufacturing policies across states.
The IISD report noted that while localisation levels for components such as body structures, wiring harnesses and thermal systems have improved substantially, battery cells remain overwhelmingly import dependent. China continues to dominate global battery cell manufacturing with well over 70 per cent of worldwide capacity, creating a challenging competitive landscape for emerging manufacturing hubs such as India.
At the same time, India's flagship Rs 18,100 crore Advanced Chemistry Cell (ACC) PLI scheme has achieved only 1.4 GWh of commissioned battery manufacturing capacity against its 50 GWh target, equivalent to just 2.8 per cent of the intended capacity, industry estimates suggest. Industry experts argue that the gap highlights India's progress in vehicle assembly while underscoring continued dependence on imported battery cells, electronics and critical materials.
Not There Yet
India's EV localisation drive has advanced significantly in mechanical components such as chassis, brakes and wiring harnesses, but industry leaders argue that the technologies that define an EV's value, performance and competitiveness, including battery cells, semiconductors, power electronics and rare-earth magnets, remain heavily import dependent, raising questions about whether the country is localising the most strategic parts of the supply chain.
Avneet Singh Kohli, Founder, Autobest Emperio, said the industry is largely picking the “low hanging fruit” by localising structural and mechanical parts. “Localising chassis, suspension, wiring harnesses and brakes isn’t EV localisation, it’s just transferring India's traditional ICE manufacturing strengths over to electric vehicles,” Kohli said. He added that the components that actually define an EV, including traction motors, advanced power electronics, battery cells and vehicle control units, remain heavily import-dependent. “You don't win the EV race by being the best at making metal brackets and wires; you win it by owning the powertrain and battery chemistry,” he said.
Localisation Numbers May Not Tell The Full Story
Industry executives also said headline localisation percentages can be misleading if they are calculated by part count, volume or weight rather than value and technology control. Some say that 50 to 60 per cent of an EV’s financial value is still imported, adding that localisation today often reflects assembly self-reliance rather than true manufacturing self-reliance. “An automaker might proudly claim 80 per cent localisation, but they are often calculating this by part count, volume or weight,” Kohli said.
Bharath Rao, Co-Founder and CEO, Emobi, said India has made meaningful progress in localising vehicle components such as chassis, body, wiring harnesses, brakes and mechanical assemblies, supported by the country’s established automotive supplier ecosystem. However, he said the next phase must focus on the components that define EV technology, performance and cost. “True self-reliance should therefore be measured through value addition, intellectual property, engineering capability and control over critical technologies, rather than only the number of locally sourced parts,” Rao said. Rao added that localisation by component count can be misleading because a vehicle may have a high number of locally manufactured parts while a small number of imported components account for a large share of its cost and technological value.
Kaustubh Dhonde, Founder and CEO, AutoNXT, said India has made strong progress in localising conventional automotive components, which has helped accelerate EV production and reduce manufacturing costs. However, he said long-term competitiveness will depend on high-value and technology-intensive components. “Localising low-complexity components is an important first step, but long-term competitiveness will depend on developing capabilities in the technologies that define the EV itself,” Dhonde said.
Abiram Menon, Co-founder and CEO, Magron Novus, said India is localising the hardware aspects of EVs but has not yet reached the layer that defines value. “Body frames, brakes, wiring, plastic components and assembling are important aspects, but batteries, power electronics, semiconductors, computer-based processes and magnets define performance, cost, safety and strategic autonomy,” Menon said.
Assembly Base Or Manufacturing Hub?
The industry’s concern is that India could become a high-volume EV assembly base without becoming a true manufacturing leader. Stakeholders said domestic capabilities in battery cells, semiconductors, rare-earth magnets, power electronics and motor technologies will be critical if India wants to move beyond assembly.
Kohli said India will not become a global manufacturing hub without ownership of core technologies. “Without owning the core technology, India will not be a global manufacturing hub, it will simply be a high volume assembly shop for Chinese, Taiwanese and South Korean intellectual property,” he said.
India can emerge as a major EV assembly and export base without fully localising every component, but achieving long-term manufacturing leadership would be difficult without capabilities in critical areas. “A global manufacturing hub must contribute more than low-cost assembly. It must own important parts of the technology, engineering and product-development process,” Rao said.
India can become a major EV production and export base in the near term, but long-term leadership will require deeper participation across the value chain. “A sustainable EV ecosystem requires more than vehicle assembly—it requires participation across the value chain,” Dhonde said. Menon echoed the same concern, saying India can become a major EV assembly base but not a true global manufacturing hub without domestic capabilities in cells, semiconductors and magnets. “These are the strategic cornerstones of the electric vehicle industry,” Menon said.
Battery Materials And Critical Components Remain The Big Hurdle
While stakeholders differ on the sequencing of India’s localisation journey, most agree that the country needs deeper capabilities in batteries, electronics, materials and component manufacturing to move from assembly to leadership.
Kohli said the absence of a deep upstream materials supply chain is the biggest hurdle. He said even cell manufacturing facilities backed by the Rs 18,100 crore Advanced Chemistry Cell PLI scheme still rely on imported cathode materials, anode materials, binders and battery-grade lithium, nickel and cobalt. “The single biggest hurdle is mastering and scaling chemical processing and active materials manufacturing,” Kohli said.
Rao identified the absence of sufficient commercial scale and long-term demand certainty as a major challenge for companies investing in critical EV technologies. “Companies will make these investments only when they have confidence that demand will be large, predictable and sustained,” Rao said.
Dhonde said the bigger challenge is building an integrated EV value chain that combines advanced manufacturing, technology development and critical component production. “The transition will be driven not by assembling EVs at scale, but by owning and developing the technologies that power them,” Dhonde said.
Menon said India has entrepreneurs, demand and technical expertise, but needs patient capital, research, suppliers, processes and policy support to become a leader. “To progress from assembler to leader, India will need IP, manufacturing expertise and scale in the technology integral to electric vehicles,” Menon said.
Beyond Sales, The Ownership Ecosystem Also Matters
As the EV market expands, industry stakeholders also said India’s EV ecosystem will need to focus not only on production but also on long-term reliability, charging infrastructure and after-sales support.
Surendar Nath, Executive Director, ETO Motors, said the industry’s focus is shifting from vehicle sales to long-term operational reliability as EV adoption scales. “Building a dependable ecosystem requires equal attention to charging infrastructure, service networks, battery performance, technician training and digital monitoring systems,” Nath said. While EVs generally have fewer moving parts than conventional vehicles, they require specialised diagnostic capabilities, skilled technicians and robust after-sales networks. “As the number of EVs on the road increases, service readiness will become as important as vehicle availability,” Nath said.
The next phase of India’s EV journey, therefore, may depend on two parallel shifts, first is moving localisation deeper into batteries, semiconductors, electronics and materials, and second is building a reliable ownership ecosystem around charging, servicing and battery health. Without that, India may scale EV assembly, but still fall short of becoming a true EV manufacturing and technology hub.