# India: The Emerging Hub for Electric Vehicle Exports


*Suzuki eVX electric crossover could become one of India’s most significant automotive exports.*

## The Rise of India as an Electric Vehicle Exporter

In recent developments, major automotive players such as Jaguar Land Rover (JLR), Suzuki, Tata Motors, and potentially Ford are gearing up to export electric vehicles (EVs) from India, often referred to as the low-cost vehicle manufacturing hub of the world.

Earlier this month, Tata Motors announced plans to collaborate with its subsidiary, JLR, to produce electric cars at a facility in Gujarat, India, aimed at global exports. These new models, set to debut next year, will be based on JLR’s EMA EV platform, which will also support smaller Range Rover models, including an electric version of the Evoque.

## Ford’s Strategic Shift

In a significant move, Ford has decided to revive production at its Chennai plant, which had previously been shut down. Instead of focusing on the Indian market, the company plans to export vehicles from this facility, with local reports suggesting that these will likely be electric models destined for Europe.

## Vinfast’s New Factory

Not far from Chennai, Vietnamese automaker Vinfast has commenced construction on a new factory dedicated to producing EVs, further underscoring the region’s growing importance in the electric vehicle landscape.

## Suzuki’s Ambitious Plans

Suzuki, the market leader in India, is set to unveil its first EV in January, which will be exported to both Europe and Japan. This model, previewed by the eVX concept, marks Suzuki’s entry into the EV market in the UK and Europe.

## India’s Vision for EV Leadership

As global automotive markets express concern over China’s dominance in the EV sector, India is positioning itself as a more favorable competitor. The Indian government has set ambitious goals, with Minister of Road Transport and Highways, Nitin Gadkari, asserting that India will become the largest exporter of lithium-ion batteries within five years. To support this vision, the government has introduced incentive schemes to encourage companies to establish battery cell manufacturing operations.

Tata is already making strides with its new battery company, Agratas, which is also building a cell facility in Somerset, England, aimed at supplying JLR.

## Historical Context of India’s Automotive Exports

Historically, India has served as an export hub for various manufacturers, including Ford, Suzuki, and Jeep. However, the country has struggled to establish a consistent vehicle export pipeline to the UK and Europe. Despite this, India’s competitive manufacturing costs could be a decisive factor in reducing EV prices.

Currently, the UK imposes a standard 10% duty on vehicles imported from India, similar to that from China. However, ongoing negotiations for a free trade agreement could potentially eliminate these tariffs, making Indian exports more attractive.

## The Current State of India’s EV Market

As the world’s most populous nation and the third-largest vehicle market, India has the potential to reshape the automotive industry. The country is motivated to transition away from internal combustion engines due to poor urban air quality and a heavy reliance on imported oil.

However, India’s journey to match China’s EV success is still in its infancy. In 2022, India sold only 82,105 EVs, accounting for about 2% of the total market, compared to China’s impressive 5.34 million EVs, which made up a quarter of its total vehicle sales. Tata Motors dominates the Indian EV market, selling around two-thirds of all EVs, with a lineup that includes five electric models.

## Challenges Ahead

Despite Tata’s leadership, the company’s EV sales experienced a decline in the quarter ending June, following the cessation of government purchase incentives. India’s path to becoming a significant player in the global EV market is hindered by its reliance on a limited number of manufacturers, primarily Maruti Suzuki, which holds a 40% market share with its affordable, low-tech internal combustion engine models.

The lack of a cohesive national strategy, unlike China’s comprehensive five-year plans for EV development, also poses challenges. China’s government has successfully fostered a robust local battery industry, controlling much of the supply chain for essential materials.

## Success in Two-Wheelers

India has seen more success in the electrification of its two-wheeler market, which is the largest in the world. In 2022, approximately 10% of India’s 17 million two-wheeler sales were electric, with Ola Electric Mobility leading the charge. In July alone, electric two-wheeler sales surged by 96%, reaching 107,016 units.

With their practicality and battery-swapping capabilities, electric two-wheelers are becoming integral to Indian urban life. Predictions suggest they could account for 90% of total two-wheeler sales by 2030, while electric cars may only reach 20%.

## Conclusion: A Future of Possibilities

While India’s electric car market may never rival China’s in volume, it presents a promising and cost-effective manufacturing hub for global automakers like Ford and Suzuki. By focusing on entry-level electric vehicles, India can bridge the current cost gap and meet emissions targets, paving the way for a more sustainable automotive future.