Indian EV Component Market to Soar Beyond Rs 150,000 Crore by 2030
The Indian market for components of e-two-wheelers is forecasted to surpass Rs 1,00,000 crore by 2030, with e-passenger vehicle components expected to generate an additional revenue potential of at least Rs 50,000 crore, according to credit rating agency ICRA. The demand for EV batteries within India for domestic sales is estimated to exceed 15 GWh by 2025 and surpass 60 GWh by 2030.
Shamsher Dewan, senior VP and group head, corporate ratings ICRA, said, “Auto ancillaries have started investing in EV components to capitalize on this opportunity, and companies have entered into collaborations/joint ventures in cases of technological impediment”. ICRA expects at least Rs 25,000 crore of capex for EV components in the next three to four years, “for capacity building, technology and product enhancements and about 45-50% of this, would be towards battery cells”, he said.
In FY2024, India saw its EV penetration rise to nearly 5%, primarily fueled by the adoption of electric two-wheelers, alongside contributions from e-three-wheelers and electric buses. Currently, only about 30-40% of the EV supply chain is localized, as per the ICRA report.
Chassis components that demand minimal technological upgrades are presently manufactured locally. There has been notable localization progress in traction motors, control units, and battery management systems over time. However, advanced chemistry batteries, which constitute the most crucial and expensive component, comprising around 35-40% of the vehicle price, are imported. This presents an opportunity for local component companies as EV manufacturers focus on localization. ICRA anticipates that EVs will represent approximately 25% of domestic two-wheeler sales and 15% of passenger vehicle sales by 2030, indicating significant market potential for EV components.