In the last few years, the Indian government has been rapidly promoting electric mobility. As part of its goal of carbon neutrality, the Indian government is encouraging automakers to adopt electric vehicles. Which will help in reducing emissions from vehicles in the country. However, a report by think tank Global Trade Research Initiative (GTRI) claims that this effort to promote domestic manufacturing of electric vehicles could lead to large-scale entry of Chinese automakers into the Indian domestic market. .
These findings come at a time when Chinese auto companies dominate the global automobile industry. Which are aggressively trying to capture the electric vehicle markets in different continents with their affordable products, which have substantial support from the Chinese government. Talking about the projections, GTRI said that China’s automobile industry, driven by substantial support from the government, has developed rapidly in electric vehicle technology. Due to which it has become a major exporter of EV and related components.
The report also said that renewed policy efforts and private sector efforts to make India an electric vehicle manufacturing hub will lead to a sharp increase in dependence on vehicle components imported from China. . It is noteworthy that India’s auto component imports in 2022-23 were $20.3 billion and about 30 percent of this came from China. The report said that as electric vehicles are being given more attention in India, vehicle component imports from China may increase further. Because it has more control over the global supply chain of EV components.
Currently, China has 75 percent of the world’s battery production capacity and battery packs account for 40 percent of the total price of an electric vehicle. China accounts for more than 50 percent of global electric vehicle production and exports to markets around the world. Estimating the Indian electric mobility scenario, the report said that in the next few years, every third electric vehicle and many passenger and commercial vehicles plying on Indian roads could be made by Chinese auto companies. These could be directly by Chinese OEMs or through joint ventures with Indian companies.
The report also said that entry into the Indian market could provide a major relief to Chinese companies, as their exports to the EU and the US are declining. This is due to anti-subsidy investigations and increased trade restrictions on exports of subsidized cars and EV batteries. Interestingly, this estimate comes after the arrival of JSW MG Motor India, a joint venture between China’s SAIC and Indian conglomerate JSW Group.
These two companies, who have formed a joint venture, have announced that under JSW MG Motor India, an investment of Rs 5,000 crore will be made to increase production capacity locally in India. Also, the company aims to launch a new car in India every three to six months starting from September 2024.
