Can Indian EV makers maintain their lead in a race against Chinese players?

NEW DELHI – China makes

more than 70 per cent of the world’s electric cars

and some of its top brands such as BYD, Xpeng and Geely are common sights on roads across the world, from South-east Asia to South America and Europe.

But not in India, the world’s third-largest automobile market, where the Chinese electric car-making juggernaut has hit a regulatory speed bump, thanks to New Delhi’s heightened scrutiny of Chinese investments.

In April 2020, New Delhi announced that investments from countries sharing a land border with India, which includes China, would require prior government approval. The stated goal was to curb “opportunistic takeovers” of Indian companies during the Covid-19 pandemic.

A fatal border clash between the two arch-rivals later in June 2020 further intensified India’s regulation of Chinese investments.

This controlled regime has allowed indigenous car manufacturers to steal a march on Chinese carmakers, with two leading Indian brands – Tata Motors and Mahindra & Mahindra – accounting for around 58 per cent of the 160,628 electric cars sold in the country between January and November 2025.

But Chinese brands or those formed in partnership with companies from China, including JSW MG Motor, BYD and Volvo, are catching up fast

as ties between New Delhi and Beijing improve.

This could pave the way for stiff competition between Chinese electric mobility heavyweights and locally dominant Indian carmakers, which currently enjoy a crucial head start. Sales of Chinese electric vehicles (EVs), known for their innovative features, could zoom ahead if priced affordably for the Indian market.

In 2019, Chinese brands did not account for a single electric car sale in India. But they now have an estimated 33 per cent share of the market by volume.

Seeking new markets

Exporting electric cars has become crucial for Chinese carmakers as the domestic market in China saturates, forcing them to look for markets elsewhere.

China’s EV makers spent more on factories abroad than at home for the first time in 2024, even though their global expansion efforts have met with resistance, not just in India but also in the United States, the world’s second-largest automobile market.

EV sales have, meanwhile, been accelerating in India, currently comprising about 5 per cent of all passenger vehicles sold, compared with 2.6 per cent in the financial year ending March 2025. India’s passenger vehicle sales touched 4.34 million units in the 2024-25 fiscal year.

The Indian government wants EVs to make up 30 per cent of total passenger vehicle sales by the end of March 2030. Moving away from fossil fuels to electricity has emerged as a key transport and health priority for India, where cities battle chronic air pollution caused in large part by emissions from cars, motorcycles, lorries and buses.

Amid this ongoing shift away from cars with internal combustion engines, Indian carmakers are worried about their long-term ability to retain their lead over cash-rich Chinese manufacturers, including those owned by the state or others backed by heavy state subsidies.

Tata Motors and Mahindra & Mahindra did not respond to queries, but the latter’s executive director for auto and farm sectors, Mr Rajesh Jejurikar, told The Times of India in November 2025 that Indian carmakers are open to competing with Chinese brands, provided they “compete on equal terms” and adhere to India’s localisation norms.

Mr Shailesh Chandra, managing director and chief executive of Tata Motors Passenger Vehicles Limited, told the media on Dec 23 that foreign EV players who seek to exploit the domestic market must “invest into localisation, invest into employment creation and so on”.

Industry experts reckon relaxed restrictions on Chinese electric carmakers in the country could see them give Indian carmakers a run for their money.

“If Indian car manufacturers are not value competitive or are not technologically advanced and have big gap in terms of meeting consumer expectations, then they may go through a tough time,” said Mr Puneet Gupta, director for the India & Asean Automotive Market with S&P Global Mobility.

Growing automobile hub

But he told The Straits Times that allowing investments from China into India while ensuring they develop the wider ecosystem around electric mobility, including charging facilities, recycling of batteries and manufacturing of cells, would be beneficial for the country in the long run.

“With the Chinese coming in, two things will happen. One is that EV manufacturing will pick up pace and, secondly, technology transfer can happen quickly,” he added.

India’s flourishing mobile phone manufacturing industry is already dominated by Chinese firms that are increasingly making their products in India and even exporting devices from the country.

The Indian government remains keen to protect the automotive industry, which plays a key role in the economy. It has an annual turnover of about US$240 billion (S$308.3 billion) and accounts for around 30 million jobs, including more than four million direct ones.

An important manufacturing and export base for foreign carmakers such as Toyota and Hyundai, India also aims to become a global manufacturing hub for electric vehicles.

Given these strategic priorities, experts believe Indian government regulation of Chinese investments will continue in some form or other.

“The Chinese have used the EV market as an instrument of its state policy. So why shouldn’t India protect its automotive market and manufacturers as a state policy?” said Mr Kushan Mitra, a senior automotive journalist.

Making inroads

No Chinese carmaker currently operates a fully owned manufacturing plant in India. BYD hopes to set up its first factory in the country but has not announced a definite timeline.

In 2023, a proposal by BYD and a local Indian partner for a US$1 billion EV and battery plant was not approved by the Indian government due to regulatory concerns.

The Shenzhen-headquartered firm currently either imports fully built cars from China or assembles them in India using imported kits.

Its India sales have grown despite high import tariffs, jumping by nearly 80 per cent in 2025 compared with the previous year as more models are cleared by the Indian government for the domestic market.

Other Chinese car manufacturers, including Xpeng, Geely and Chery, are also keen to enter the Indian market.

The current Chinese-origin top seller in India is JSW MG Motor, a joint venture between India’s JSW Group and China’s SAIC Motor. It sold 47,574 EVs between January and November 2025, the second-highest figure for any firm after India’s Tata Motors and ahead of Mahindra & Mahindra.

But Indian electric carmakers can put up a good fight. Even though they continue to be reliant on Chinese cell imports, they have introduced design and technological innovations, including “coast-to-coast” display screens across the dashboard and panoramic sunroofs, establishing themselves as players to reckon with and gaining what could turn out to be a loyal customer base.

“Weirdly enough, the protection that Indian carmakers got as a result of what happened in 2020 allowed them to learn from what the Chinese are doing, benchmark themselves and get more aggressive,” Mr Mitra told ST.

In October 2025, China filed a complaint against India at the World Trade Organization, alleging that its electric vehicle and battery subsidy schemes violate global trade rules by favouring domestic products over imports and sidelining Chinese carmakers seeking access to India’s EV market.

Strong growth, more options

The market for electric cars in India is also growing rapidly, with many launches lined up in 2026, including one from the country’s largest automobile manufacturer, Maruti Suzuki, which is known for its mass offerings.

Other players, including Toyota, Kia and Hyundai, also have electric models slated for release in 2026. The American Tesla and VinFast from Vietnam also entered the Indian market in 2025.

Chinese carmakers could find it difficult to establish a stronghold in such a crowded market with entrenched players, especially without any government clearance to set up mass manufacturing facilities in India.

Mr Mitra said: “They probably could be allowed eventually, but by then, will it be too little, too late for them?”