Collaboration with Chinese Companies can Enhance India’s Clean Mobility Landscape

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The Indian Government has set an ambitious goal for the adoption of Electric Vehicles, targeting EVs to make up 30% of all passenger vehicles by the year 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 in 2024, and 6% in Brazil. With the low adoption rate of EVs in India, achieving the 2030 target will prove to be a challenge. Besides the policy ambition, increasing EV adoption requires investments in infrastructure, technology and manufacturing capacity. One of the reasons for the slower adoption, for instance, is range anxiety amongst buyers. This can be solved through scaling up charging infrastructure and battery swap networks to increase buyer confidence.

Currently, India has approximately 26,367 public EV charging stations, with the ratio of charging stations to EVs being 1:235. This limited infrastructure, coupled with slow charging speeds, impacts buyers’ decisions. Furthermore, the current demand for EVs in India is driven by subsidised costs rather than consumer preference.

Encouraging Local Production, Cautiously:

The government also 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 manufacturing facility in India, and subsequently meet domestic value addition criteria.

Amid this push for domestic EV growth, 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 to invest $1 billion to build a manufacturing plant in India which was rejected by the government on grounds of ‘nation’s strategic interests’. Recently, BYD also faced impediments in obtaining work visas for its executives travelling to India. Similarly, an Indian contingent’s visit to Shenzhen for a meeting with BYD car dealers also saw visa rejections from the Chinese government.

Instead of extending this feud, India can utilise Chinese expertise in EVs and charging infrastructure to accelerate innovation and adoption of EVs. The challenges in the Indian EV sector offer scope for cooperation between Indian and Chinese EV makers as well as component manufacturers. Partnership with Chinese EV and component manufacturers can help Indian firms in adopting smart manufacturing techniques and eventually lowering costs of EVs.

In any case, Indian EVs are reliant on Chinese imports of batteries and other smaller components as well. From the total imports of batteries in 2023-24, 75% of them were from China. Companies with top-selling EVs in India, like Tata and MG, are also reliant on Chinese technology. Tata Motors’ EVs include lithium-ion cells from Gotion and EVE, both Chinese manufacturers. MG Motors India, on the other hand, is an example of a Joint venture between JSW and the Chinese SAIC Motor, but the JV also faced significant scrutiny in the beginning. Consequently, SAIC has now decided to refrain from committing further capital in the Indian market. Enabling partnerships between tech-intensive component manufacturers and Indian companies to establish local plants could lead to reduced imports and technology transfer in manufacturing processes. Companies like Ford and Tesla are also partnering with CATL for setting up battery manufacturing plants in the US, whereas Toyota is also jointly producing EVs with BYD.

Due to India’s reluctance to accept investments from Chinese manufacturers, these companies are seeking alternatives in Asian and European markets. Additionally, the charging infrastructure in China is also significantly advancing, through technological innovation led by the private sector. BYD is working towards setting up fast charging stations, whereas other companies like CATL and Geely are establishing battery swap networks. Huawei has also developed a solution to reduce the impact of superchargers on the power grid. Collaborating with these companies can help India in adopting technologies and best practices for expanding its own charging infrastructure.

Recently, NITI Aayog also recommended easing investment screenings for Chinese companies to avoid delays in deals. This reflects a growing recognition that strategic caution need not translate to isolation especially in less critical sectors like EVs. A balanced approach would be to foster partnerships that can also enhance domestic capacity like the JSW Joint Venture. Manufacturing plants can also develop an ecosystem of domestic component suppliers in the long term, opening up opportunities for MSMEs.