India is racing toward becoming the world’s fourth-largest electric car manufacturer by 2030, with production capacity soaring tenfold. But according to the Rhodium Group, unless India slashes costs, it won’t stand a chance against China in global EV exports. Can India ‘Make for the World’ without pricing itself out.
India is on track to become the fourth-largest electric vehicle (EV) manufacturer in the world by 2030, with its electric four-wheeler production capacity projected to increase from 200,000 to a staggering 2.5 million units annually. That’s a tenfold surge, positioning India just behind global giants China, the European Union, and the United States, according to a new study by the New York-based Rhodium Group.
However, there’s a catch. Rhodium warns that India’s EV production capacity could outpace domestic demand by 1.1 to 2.1 million units over the next five years. If India aims to export the excess, it must significantly reduce manufacturing costs to remain competitive with Chinese EV exports, the report cautions.
The report projects that India’s domestic EV demand will grow from 100,000 units in 2024 to between 400,000 and 1.4 million units by 2030, depending on policy implementation and battery affordability. With overall car sales in India projected at 6 million by the end of the decade, EVs could account for 7 to 23 percent of the market.
“This far exceeds India’s projected 2030 EV demand (which likely reaches anywhere from 430,000 to 1.4 million vehicles depending on the pace of policy and battery costs), suggesting the potential for future exports. This push aligns with the government’s strategy to ‘Make in India for the world’, but Indian companies will need to drive down costs if they want to compete with exports from China,” Rhodium stated in its latest Global Clean Investment Monitor report.
Tata Motors, MG Motor, and Mahindra are currently leading the Indian EV market with nearly 90% market share, according to the government’s Vahan portal.
When compared globally, India’s anticipated 2.5 million production capacity will fall short of China’s massive 29 million units, the EU’s 9 million, and the US’s 6 million. Yet, India is set to outpace Japan and South Korea, emerging as the top EV manufacturer outside the big three.
While Japan and South Korea currently have operational capacities of 1.1 million and 500,000 units respectively, their future capacity expansions remain limited. By 2030, Japan is expected to produce up to 1.4 million EVs and South Korea around 1.9 million, trailing behind India’s forecasted capacity.
India’s approach to EV development stands out globally. It combines protectionist trade policies with consumer incentives and subsidies for local manufacturing. Tariffs on fully built imported EVs remain steep—between 70 to 100 percent—creating a protective bubble for domestic players but limiting consumer options and keeping prices high.
“Nearly 100% of India’s EV production currently serves the domestic market,” Rhodium highlighted. “To grow globally, India will have to shift its strategy.”
The report also addressed battery production, stating that India is fast emerging as a serious player. It has shown “meaningful activity” in both battery cells and modules, and is poised to become the largest module producer outside of China, the US, and Europe.
However, most of this momentum is recent. Much of India’s projected battery growth relies on projects that are still under construction or just announced, adding risk to the timeline.
Still, India is expected to outpace South Korea, Japan, Malaysia, and other smaller producers in battery cell capacity by 2030—ranking just behind China, the EU, the US, and Canada.
While India’s rise in the EV sector is promising, the race is far from over. Rhodium’s analysis makes one thing clear: unless India slashes costs and ensures timely execution, its goal to be a global EV hub could be derailed by the fierce competition from China.
