EVs: Hard To Feed, Hated By Rivals, Waiting For Green Light

In a bid to smoothen the shift, Finance Minister Nirmala Sitharaman announced the setting up of a National Manufacturing Mission to help EV auto companies and ancillary units. “The Mission will lead efforts to make India a global manufacturing hub, strengthening capabilities in the cleantech space, particularly solar cells and the EV ecosystem,” she said in her budget speech.

Taking cognizance of India’s limitations in producing critical minerals, crucial for the production of EV batteries, Economic Survey 2025 also stressed on the need to reduce import dependence. “The import intensity of EV production, especially from countries with whom India has persistent and large trade deficits (read ‘China’), is very high. This needs to be considered while incentivising the sector,” it said.

The bullish announcements sent auto and EV tech stocks into overdrive for a few days. Soon after, though, deeper issues such as import tariffs throttled both growth and adoption.

US’ India Rhetoric And Demands On Tariff Reduction

Against this backdrop, President Donald Trump’s claims that India has “agreed to slash tariffs” on US goods is causing disquiet in North Block and consternation in the auto sector. India is studying the repercussions of lowering import duties, while protecting domestic manufacturers. Canada, China and Mexico—facing similar claims from the US and President Trump—have reacted vehemently.

If we talk EVs alone, the US is seeking zero tariffs on imports as part of a trade agreement. With import duties of 110 per cent, India is hesitant to write off levies. After all, EVs are at a nascent stage, and domestic firms (and long-time players) such as Mahindra, (Maruti) Suzuki, Hyundai, Toyota and Honda have invested heavily on EV tech. “Their interests need to be protected, and that is a big headache,” an official admitted. EVs and BEVs (Battery EVs) are counted in India as electric vehicles.

Making the headache more intense is Tesla CEO and Trump confidante Elon Musk, repeatedly stating that India’s auto tariffs are amongst the highest in the world. Years back, tariffs are what prevented Tesla from entering the Indian market. Today, given his entrenched position in the White House, Musk is pushing harder. The grapevine also reveals that Tesla plans to launch its line-up in India soon.

The bold headlines on Tesla and the EV market have made domestic manufacturers fidgety. “We have been reliably told that Tesla and/or further EV imports will enjoy an 85-per cent reduction in duties. This will rewrite the ground rules in the EV space, which will be unfair and unfortunate,” the Chairman of a top auto firm said. He called this “an issue mired in flux” and asked not to be named.

After Heady Start, EV Growth Is Slithering Each Year

As if these debates and standoff are not enough, EV sales have also been causing worries, with growth sliding for the second straight year. In 2024, India’s EV segment reported 19-per cent growth over 2023, with 1,06,966 units sold. Growth numbers were 89 per cent in 2023 and 224 per cent in 2022. Yes, the base is larger now, but the sharp slippage in sales is still cause for concern.

EVs accounted for a fraction of total vehicle sales in 2024, industry watcher Autopunditz says. This growth was driven by new model launches, including Tata Punch, Tata Curvv and MG’s Windsor. Auto firms are worried about sales of older variants, which are slipping and leaving showrooms only when sold at a heavy discount (to maintain sales momentum and achieve targets).

In brand terms, there were three auto firms that did fairly well, with Tata Motors leading the chart and enjoying a 62 per cent marketshare. But Tata Motors still lost 12-per cent share to MG Motors, which expanded its sales by 13 per cent on the back of aggressive pricing of the new Windsor. Mahindra’s EV sales increased too, but only on the back of discounts.

The average sales price for EVs in India is Rs 14.1 lakh, steep in a sector that has been ruled by ICE (internal combustion engines). A large part of this high price tag is the cost of the battery, which makes upfront EV costs 1.5-2X higher than a comparable ICE vehicle. For the inquisitive, batteries account for 30-40 per cent of an EV’s BOM (bill of materials).

Real-World Performance: How ‘Fun’ Is An EV?

According to auto enthusiast Shreyans Jain, anyone who says EVs aren’t fun is “inherently biased” or hasn’t experienced one. “The instant torque is addictive and EVs easily outpace ICE cars costing twice as much. Handling is sharp with stiffened suspensions and a low centre of gravity. The drive can (also) be serene and quiet when you are cruising — that is fun in its own way,” he says.

That’s nice. What about highways and charging the battery? A real-life example comes from Praruaa, who travelled across six states in southern-central India, 3,700 km in a Volvo XC40 Recharge. The route he opted for has a better recharging network than most, but he still had to plan carefully. He took detours of 40-50 km to reach charging stations; there were none on many sections of the route.

“Bharat Petroleum, Indian Oil and Hindustan Petroleum outlets have 25-30KW DC chargers, but they are always offline. They may have installed chargers only to boost numbers; they are not maintained,” Praruaa says, adding that Statiq’s charger network is the best, with the lowest rates. He admits to often sitting at charging stations late into the night, after dropping his wife and mother at the hotel.

The cost of travelling on the highway by an EV is a story in itself. The XC40 cost between Rs 3 and Rs 8 per km, averaging Rs 5 per km, more than a diesel or petrol vehicle. The same journey in a Petrol Hybrid would have cost half the amount. “If the rate per kWh is brought below Rs 20, the cost-saving over traditional fuels is significant. Else, only home-charging is a justifiable solution,” he adds.

Praruaa’s charging travails suggest that for now, EVs are not much fun to travel in on India’s highways.

EVs Are Clean When They Run; Are They Clean To Make?

The ‘Is It Clean’ question needs to be asked to determine whether EVs, sold as ‘green’, are indeed that colour through and through. Apparently, they are not. EVs are great when they run, but what goes into producing them is a tangent; while lower emissions are commendable, the environmental impact of battery production remains a matter of contention.

Battery manufacturing and charging are what turns the scales on the ‘green’ angle. Batteries contain minerals like lithium, cobalt and nickel. India does not have enough lithium to produce batteries, and it procures ready batteries from China. Mining these minerals has a negative environmental fallout and that makes EV manufacturing very energy-intensive; ‘un-green’ if you will.

Charging batteries is unclean too, for it relies on power. In India, 47.29 per cent of power comes from burning coal, says NITI Aayog. This emits sulphur di-oxide, nitrogen oxides and particulate matter into the atmosphere. As former Baywatch girl Alexandra Paul quips: “Electric Cars aren’t pollution-free. They have to get their energy from somewhere.” That somewhere is where fumes feed the ‘green’.

Soliloquy: Let me leave you with another thought, one that has pushed many EV purchase decisions to sudden death. EVs are the only vehicle resale option in which the seller pays taxes, an afterthought to make up for levy benefits enjoyed at the time of purchase. The result is a nixed duo — the buyer, not knowing whether he has bought a diamond or a lemon (as happens with any used car), drives off with crossed fingers; the seller pays taxes for supporting sustainability and trying to save the planet.

(The writer is a veteran journalist and communications specialist. Views expressed are personal)