Why our EV push needs China’s edge

The Indian government has set an ambitious goal for electric vehicle (EV) adoption, targeting EVs to make up 30% of all passenger vehicles by 2030. Currently, EV adoption in India remains significantly low, accounting for only 2.5% of all the cars sold in 2024. Comparatively, electric cars represent 9% of total car sales in the Southeast Asian market and 6% in Brazil. Given India’s low adoption rate of EVs, achieving the 2030 target will be a challenge. Despite the low demand, the government tried to promote EV manufacturing in India through a scheme that offers import duty reduction if automakers invest a minimum of $500 million in an EV production facility in India and meet domestic value addition (DVA) criteria.

Amid this domestic push, the Indian government has taken a clear stance against the entry of Chinese foreign firms, most notably China’s EV giant BYD. BYD initially proposed a $1 billion investment to build a manufacturing plant in partnership with an Indian firm, which was rejected by the government on the grounds of the “nation’s strategic interests”. Recently, BYD faced impediments in obtaining work visas for its executives travelling to India. This was likely a response to the Chinese government’s rejection of visas for an Indian delegation planning to visit Shenzhen for a meeting with BYD car dealers.

Instead of prolonging this feud, India could utilise Chinese expertise in EVs, batteries and charging infrastructure to accelerate innovation and boost EV adoption. The challenges in the Indian EV sector offer scope for cooperation between Indian and Chinese EV-makers.

Besides policy ambition, increasing EV adoption requires investments in infrastructure, technology and manufacturing capacity. One of the reasons for the slower adoption is range anxiety among buyers. This can be addressed by scaling up charging infrastructure and battery swap networks.

Currently, India has approximately 26,367 public EV charging stations, with a charging station-to-EV ratio of 1:235. This limited infrastructure, coupled with slow charging speeds, impacts buyers’ decisions. Other reasons driving consumer preference for traditional combustion engine vehicles include higher costs, safety concerns with battery technology and limited models. The affordability of EVs is hindered by elevated input costs, a direct consequence of relying on imported components. 

While the government tried to address the challenge of imported components through the ‘Scheme for Promotion of Manufacturing of Electric Passenger Cars in India’ (SPMEPCI), its stringent requirements have dissuaded EV manufacturers from applying for import duty reduction benefits. Many believe that the investment to set up the plant outweighs the core benefit of reduced import duty. 

In contrast, state governments have introduced more comprehensive EV policies, offering land subsidies, tax waivers and labour incentives with faster approvals. Tamil Nadu, for instance, provides EPF support for local hiring. 

China’s EV industry has matured rapidly, offering valuable expertise in areas like battery technology, vehicle design and manufacturing efficiency. Selective collaboration — especially through joint ventures, setting up charging infrastructure or component partnerships — could help Indian firms address the challenges in EV adoption.

In any case, Indian automakers remain reliant on Chinese imports of batteries and other smaller components. Of the total battery imports in 2023–24, 75% came from China. Companies with top-selling EVs in
India, such as Tata and MG,
also depend on Chinese technology. MG Motor India, on the other hand, is a joint venture between JSW and China’s SAIC Motor, though the JV faced significant scrutiny in the beginning. As a result, SAIC has
now decided to refrain from committing further capital to the Indian market.

Facilitating partnerships between tech-intensive component manufacturers and Indian firms to establish local plants could reduce imports and enable technology transfer in manufacturing. Companies like Ford and Tesla are partnering with CATL to set up battery plants in the US, while Toyota is jointly producing EVs with BYD.

India’s reluctance to accept Chinese investments has pushed companies to explore Asian and European markets. Meanwhile, China’s charging infrastructure is rapidly advancing, driven by private-sector innovation. BYD is building fast-charging stations, while CATL and Geely are establishing battery swap networks. Collaborating with these firms could help India adopt technologies and expand its own EV infrastructure.

The NITI Aayog recently recommended easing investment screenings for Chinese firms to avoid deal delays, signalling that strategic caution need not mean isolation, especially in commercially driven sectors like EVs. A balanced approach would be to foster partnerships that strengthen domestic capacity, as seen in the JSW-SAIC joint venture. Over time, such manufacturing collaborations can expand the base of domestic component suppliers, create new opportunities for MSMEs, and substantially improve India’s technological capabilities in the clean mobility sector.

(The writer is a research analyst with the Indo-Pacific Studies programme, the Takshashila Institution)