Indian EV market likely to see large-scale Chinese invasion, claims study


A study by the Global Trade Research Initiative (GTRI) stated that the Indian government’s push for electric vehicles may result in large-scale entry

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A study by the Global Trade Research Initiative (GTRI) stated that the Indian government’s push for electric vehicles may result in large-scale entry of Chinese companies into the country’s domestic market. (REUTERS)

The Indian government has been pushing hard for electric mobility over the last few years. As part of its commitment towards carbon neutrality, the Indian government has been encouraging the automakers to thrive for electric vehicles, which will help reduce the country’s vehicular emissions. However, this push to boost the domestic manufacturing of electric vehicles may result in large-scale entry of Chinese automakers into the Indian domestic market, claimed a report by the think tank Global Trade Research Initiative (GTRI).

The findings come at a time when the global automobile industry is witnessing a massive rise in Chinese auto companies, which are aggressively thriving to grab the electric vehicle markets across different continents with their affordable offerings, aided by substantial support from the Chinese government. Speaking about the projection, GTRI has said that China’s automotive industry, buoyed by substantial state support, has grown rapidly in electric vehicle technology, making it a major exporter of EVs and related components.

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The report also stated that the renewed policy push to make India a hub for electric vehicle manufacturing and efforts of the private sector will result in a sharp increase in dependence on auto component imports from China. Interestingly, India’s auto component imports were $20.3 billion in 2022-23 and about 30 per cent of it came from China. As electric vehicles are getting greater focus in India, the auto component imports from China may increase further because it has a greater hold over the EV components’ global supply chain, the report said.

Currently, China has 75 per cent of the world’s battery production capacity and battery packs account for 40 per cent of the total sticker price of an electric vehicle. China also accounts for more than 50 per cent of global electric vehicle production and exports to markets around the world. While making projections about the Indian electric mobility scenario, the report said that in the next few years, every third electric vehicle and many passenger and commercial vehicles on Indian roads could be those made by Chinese auto companies. These could be directly by the Chinese OEMs or through joint ventures with Indian companies.

The report also stated that entry to the Indian market could provide a major relief to Chinese companies, as their exports to the European Union and the United States are declining owing to anti-subsidy probes and increased trade restrictions over the export of subsidised cars and EV batteries. Interestingly, this projection comes on the heels of the introduction of JSW MG Motor India, a joint venture between China’s SAIC and Indian conglomerate JSW Group. Forming the JV, the two companies announced that under the JSW MG Motor India, there will be an investment of 5,000 crore in India to enhance the production capacity locally. Also, the company aims to launch one new car in India every three to six months starting in September 2024.

First Published Date: 24 Mar 2024, 17:20 PM IST

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