GTRI: Push for EVs may lead to big entry of Chinese firms

New Delhi: Govt's push to boost domestic manufacturing of electric vehicles (EVs) may lead to large-scale entry of Chinese auto firms in the local market, a report by think tank GTRI said on Sunday.

China's automotive industry, buoyed by substantial state support, has grown rapidly in electric vehicle technology, making it a leading exporter of EVs and related components, the Global Trade Research Initiative (GTRI) said.

The renewed policy push to make India a hub for e-vehicle manufacturing and efforts of the private sector will lead to a sharp increase in dependence on auto component imports from China, the report said.

India's auto component imports were $20.3 billion in 2022-23 of which 30% came from China. As the EVs are getting greater focus in the country, the auto component imports from China may increase further because it has a greater hold over the EV components' global supply chain. According to estimates, China has 75% of the world's battery production capacity and battery accounts for 40% of the cost of an EV. It also accounts for over 50% of global EV production and exports.

The report said that in the "next few years, every third electric vehicle and many passenger and commercial vehicles on Indian roads could be those made by Chinese firms in India alone or through joint venture with Indian firms".

GTRI founder Ajay Srivastava said that Indian market entry provides a much-needed relief to Chinese firms. "China's EV exports to the EU and the US are declining due to anti-subsidy probes and increased trade restrictions," he said.

Stay informed with the latest business news, updates on bank holidays and public holidays.

Boost your business with AI. Join this course by GrowFast and unlock the power of artificial intelligence. Sign up now!