India’s electric vehicle (EV) components market is poised for significant growth in 2024, driven by strong government initiatives, growing consumer demand for cleaner transport solutions, and the expansion of EV production capacities by major automotive manufacturers. As the nation moves toward achieving its ambitious target of electrifying 30% of its vehicle fleet by 2030, the demand for essential EV components is expected to surge, opening up new opportunities for local suppliers and international players alike.
Market Drivers and Government Policies
One of the most prominent drivers of the EV components market in India is the government’s push toward sustainable mobility. Under its FAME (Faster Adoption and Manufacturing of Electric Vehicles) II scheme, the government has allocated substantial funds to incentivize EV production, charging infrastructure development, and the localization of EV components. Tax exemptions and subsidies have further fueled the demand for EVs, encouraging automakers to invest heavily in producing key components such as batteries, electric motors, power electronics, and charging systems.
Rising Demand for EV Batteries
At the core of EV manufacturing lies the battery, which is expected to account for a significant share of the market in 2024. Lithium-ion batteries, in particular, are in high demand due to their efficiency and longer life cycle. Indian firms are increasingly setting up battery manufacturing plants or collaborating with global companies to meet the growing demand. With government plans to establish giga-factories for battery production, this segment is set to see rapid expansion.
Power Electronics and Electric Motors
The electric motor and power electronics segments are also witnessing growth, as these are crucial components for the overall performance and efficiency of electric vehicles. As EVs require specialized motors and power management systems, manufacturers are ramping up efforts to localize production. This will reduce dependence on imports, which has been a major hurdle for cost-effective EV manufacturing in India.
Supply Chain Development and Challenges
One of the biggest challenges for the Indian EV components market in 2024 is the establishment of a robust supply chain. While many local companies are emerging as potential suppliers, the market still relies heavily on imports for certain high-tech components, especially from China and other Southeast Asian countries. Developing a domestic supply chain for critical components, such as semiconductors and advanced electronics, remains a top priority for the Indian government and the private sector.
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Outlook for 2024
The Indian electric vehicle components market is set to experience steady growth in 2024, with an increasing focus on indigenization, technological advancement, and investments in infrastructure. The market will benefit from a combination of policy support, private sector innovation, and collaboration with global players. While challenges around supply chain and cost reduction remain, India is well-positioned to become a key player in the global EV landscape in the coming years.