India's $25.6 Billion Bet: Building Core EV Tech at Home

India's electric vehicle (EV) journey is entering a new phase. For years, the focus was on boosting EV adoption through subsidies and incentives. Now, the government is pushing to develop the technology that powers these vehicles domestically, reducing reliance on imports.

This ambition is backed by nearly Rs 2.2 lakh crore (US$25.6 billion) in policy support through schemes such as the Rs 10,900 crore PM E-Drive Scheme, the Rs 25,938 crore Production Linked Incentive (PLI) Scheme for Automobile and Auto Components, and the Rs 18,100 crore PLI Scheme for Advanced Chemistry Cells (ACC). These programmes aim to strengthen domestic manufacturing of batteries, motors, electronics and other critical EV components.

India's EV market is growing rapidly, with industry estimates suggesting that electric vehicle sales crossed 2 million units in FY25. Experts say the next challenge is not selling more EVs, but owning the technology behind them.

“India's ambition to become a global electric vehicle manufacturing hub will ultimately depend not only on vehicle assembly but on its ability to develop and manufacture core technologies domestically,” said Piyush Verma, Co-Founder and CTO of Naxatra Labs. He noted that government initiatives signal a strategic shift from import dependence to indigenous innovation. “The next phase of growth will be determined by local capabilities in motors, power electronics, battery systems and embedded software,” he added.

Indian companies are now building products specifically for local conditions. Verma explained that an electric three-wheeler carrying heavy loads on broken roads in 45-degree heat has different performance requirements from vehicles designed for Chinese cities. “The real shift underway now is that Indian companies are designing core powertrain technology for Indian duty cycles, not adapting Chinese designs built for different markets,” he said.

At Naxatra Labs, the company develops motors and controllers entirely in India for two-wheelers, three-wheelers, agricultural equipment and industrial applications. Verma said original equipment manufacturers (OEMs) are increasingly replacing imported powertrains with locally designed alternatives because they better match Indian operating conditions.

However, localisation is far from complete. “The harder truth is that design localisation is only half the battle,” Verma said. Critical areas such as magnet supply chains, semiconductor-grade power electronics and precision manufacturing equipment still require years of investment. He believes the next phase should focus on patient capital, faster testing and certification infrastructure, and greater willingness among vehicle manufacturers to qualify Indian suppliers instead of relying on established import channels.

Sanyam Gandhi, Whole-time Director of electric public mobility company Chartered Speed, echoed this view. “India has made significant progress in electric vehicle adoption, but the next phase of growth will depend on how successfully we localise the EV value chain,” he said. He added that indigenous capabilities in electric motors, motor controllers, battery management systems and power electronics would reduce import dependence, improve supply chain resilience and lower long-term costs. “Localisation also means better service support, faster availability of spare parts and lower lifecycle costs, ultimately improving fleet reliability and operational efficiency,” Gandhi said.

Homegrown innovation also makes Indian products more competitive globally. “Products designed and manufactured in India are better suited to our operating environment,” Gandhi said, pointing to India's extreme weather, difficult roads and high vehicle utilisation.