India’s electric vehicle story is often narrated through demand curves, charging stations and headline sales numbers. That lens misses where the most decisive transformation is now unfolding. The next wave of Indian EV innovation will not be driven primarily by flashy product launches or imported technology stacks. It will come from precision local manufacturing that quietly rewires how vehicles are designed, built and scaled for Indian realities. As EV adoption accelerates, localisation is no longer a policy checkbox or cost play. It is becoming the core innovation engine of the sector.
Strategic localisation
Local manufacturing has long been part of India’s automotive DNA, but EVs raise the stakes considerably. Electric platforms compress development cycles and integrate hardware and software far more tightly than internal combustion vehicles. This makes proximity between OEMs and suppliers critical. Near shore development enables faster new product introduction, sharper engineering feedback loops and greater control over quality cost and delivery. Logistics optimisation and just in time inventory matter even more when power electronics and battery systems dominate vehicle value.
Recent global shocks have reinforced this logic. Pandemic disruptions and geopolitical tensions exposed the fragility of extended supply chains. For EVs, dependence on imported components translates directly into vulnerability. Precision localisation allows Indian manufacturers to de risk supply while tailoring products to domestic usage patterns such as heat, dust, voltage fluctuations and stop start driving cycles.
Policy backbone
Government policy has moved decisively to anchor this shift. What began with Make in India in 2014 has evolved into a more structured manufacturing roadmap. The phased manufacturing plan tied to FAME II incentives nudged OEMs towards deeper localisation. Production Linked Incentive schemes for automotive, advanced chemistry cells and electronics manufacturing added scale and predictability.
Ambition underpins this policy push. India is targeting EV penetration of 30 percent for private cars, 70 percent for commercial vehicles, 40 percent for buses and 80 percent for two and three wheelers by 2030. This implies close to 80 million electric vehicles on the road and an expectation of largely domestic production. Recent budgets have reinforced intent through customs duty exemptions on capital equipment for lithium ion battery manufacturing. Infrastructure commitments are equally strong, with plans to add roughly 72,000 chargers by FY26 and over Rs 1,000 crore sanctioned in 2025 to boost accessibility and localisation.
Manufacturing economics
Understanding where localisation creates maximum value requires a close look at the EV bill of materials. Batteries alone account for roughly 30 to 40 percent of vehicle cost. A significant portion of this is tied to raw materials such as lithium and other rare earths, areas where India has limited control. Yet battery cells themselves represent around three quarters of battery cost and are currently imported.
This is where manufacturing precision matters. India’s projected lithium cell demand of 100 to 260 GWh by 2030 dwarfs current capacity. The government PLI program aims to build 50 GWh of cell manufacturing with substantial domestic value addition within five years. Achieving this will require process excellence, yield optimisation and tight quality control rather than commodity scale alone. The payoff is enormous. Cell localisation reshapes cost structures, accelerates learning curves and creates a foundation for chemistry innovation suited to Indian conditions.
Electronics edge
Beyond batteries, electronics and electrical systems form the second major value pool. EV related electronic components contribute roughly 15 to 20 percent of vehicle cost, spanning motors, power electronics, vehicle architecture and infotainment. In two and three wheelers especially, the electric motor sits at the heart of performance differentiation.
India has emerged as a fertile ground for motor innovation, particularly in brushless DC technology. Startups and established tier one suppliers are investing in local motor design, controller integration and thermal management. Precision manufacturing here is not about replicating global designs. It is about tuning efficiency, durability and cost for dense urban usage and price sensitive markets. Similar opportunities exist across inverters, onboard chargers and vehicle control units where software hardware co design thrives on local iteration.
Scale advantage
Sales momentum underscores why this manufacturing shift matters now. EV sales rose nearly 17 percent in FY25 to almost two million units. Electric passenger vehicles crossed the 100,000 mark, two wheelers surged past 1.15 million units and three wheelers approached 700,000 units. Despite softer global demand, Indian automakers are lining up close to a dozen new electric passenger vehicles in 2025, many positioned in higher segments.
Scale transforms manufacturing from a defensive strategy into an innovation flywheel. As volumes grow, local suppliers gain confidence to invest in automation, testing infrastructure and advanced materials. OEMs gain leverage to co develop components rather than source catalog parts. Over time, precision manufacturing capabilities spill beyond EVs into electronics, energy storage and mobility services.
India’s EV future will not be won solely in showrooms or policy corridors. It will be forged on factory floors where engineering depth meets local context. Precision local manufacturing is no longer just supporting the EV transition. It is shaping how India will define electric mobility on its own terms.
