India's EV Sales May Hit Over 30 Million Units by 2032: Report

India's electric vehicle (EV) component market is likely to expand more than sevenfold to ₹3.02 lakh crore by 2032 from an estimated ₹41,000 crore in 2025, on the back of rising EV adoption and increasing demand for advanced powertrain technologies, according to a report by the India Energy Storage Alliance (IESA). The EV market could expand 12-fold over the next seven years, with annual sales projected to reach 30.4 million units by 2032 under the high-growth National EV (NEV) scenario.

The prediction, published in the India Electric Vehicle & Components Market Overview Report, is based on a business-as-usual scenario and implies a compound annual growth rate (CAGR) of around 38 per cent between 2025 and 2032.

The report said the market expansion will be supported by higher electric vehicle sales, growing battery demand and wider adoption of electric motors, inverters and other power electronics across vehicle segments.

According to the report, continued reliance on imported technologies could limit the domestic value captured from India's expanding EV market unless local manufacturing capacity increases substantially.

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Battery packs accounted for the largest share of the EV component market in 2025 at around 52 per cent. Motors contributed 22 per cent, followed by inverters at 12 per cent, battery management systems (BMS) at 11 per cent and DC-DC converters at 3 per cent.

Battery packs remain the most expensive component in an electric vehicle and play a critical role in determining driving range, performance and vehicle pricing. As a result, several manufacturers have increased investments in battery technology, pack assembly and vertical integration. However, the report expects the contribution of motors, inverters and battery management systems to rise as electric powertrains become more sophisticated.

Despite the strong growth outlook, the report highlighted India's limited localisation across several high-value EV components.

Battery pack localisation was estimated at just 10-20 per cent in 2025, while localisation stood at around 22 per cent for inverters, 25 per cent for DC-DC converters, 28 per cent for battery management systems and 35 per cent for traction motors.

India also remains heavily dependent on imports for battery cells, power semiconductors and rare earth-based components, which are among the most critical inputs for batteries, electric motors and power electronics.

It added that batteries and power electronics account for nearly 50-60 per cent of an electric vehicle's total cost. Limited domestic production could therefore influence vehicle pricing, supplier profitability and manufacturers' ability to manage supply chain disruptions, while also exposing the industry to fluctuations in global raw material prices and trade policies.

Several domestic suppliers, including Bharat Forge, Bosch India, Uno Minda and Tata AutoComp, are expanding their presence in electric powertrain technologies such as e-axles, battery systems and power electronics. 

However, the report noted that manufacturing scale and technological capabilities remain uneven across the supplier ecosystem.

Companies that establish local manufacturing capacity in power electronics and integrated electric drivetrains before demand accelerates are likely to be best positioned to benefit from the additional ₹2.61 lakh crore market opportunity, it said.

The report projected that India sold around 2.6 million EVs in 2025, with two-wheelers and three-wheelers accounting for more than 90 per cent of total sales.

Under the business-as-usual scenario, annual EV sales are projected to rise to 17.2 million units by 2032. Under a higher-growth scenario aligned with national electrification targets, annual sales could reach 30.4 million units over the same period.

Battery demand is also expected to increase sharply, rising from about 19 GWh in 2025 to 229 GWh under the base scenario and 362 GWh under the higher-growth scenario by 2032.

The report said the pace of expansion will depend on further reductions in battery costs, charging infrastructure development, government policy support and continued investment in domestic manufacturing, with the strength of India's component ecosystem determining how much of the economic value created by the EV transition remains within the country.