India’s auto and EV sector has moved decisively beyond the question of adoption. Electric mobility is no longer experimental, investments are underway, and manufacturing capacity is being built across the country. As the Union Budget approaches, the more relevant question for the industry is whether policy support can keep pace with the realities of execution.
The current phase of EV growth is less about incentives and more about scale. Plants are being commissioned, localization plans are moving from intent to implementation, and domestic suppliers are beginning to integrate into the value chain. At the same time, manufacturers are encountering challenges that only emerge once volumes rise: stabilizing production, maintaining quality, and managing capital-intensive operations.
Manufacturing Is the Real Test Now
EV registrations crossed 2.3 million units in 2025, accounting for close to eight percent of total vehicle registrations. This signals that electric mobility has entered the mainstream. What follows adoption, however, is manufacturing reality.
Battery and vehicle manufacturing are complex, long-cycle businesses. As production scales, issues such as yield optimisation, safety validation, and operational consistency become critical. These are not challenges that can be solved through demand-side measures alone. They require execution-focused policy support.
Battery Demand Highlights the Scale Ahead
The urgency of this transition is underscored by battery demand projections. According to ICRA, India’s lithium-ion battery market is expected to grow at a compound annual rate of 35–40 per cent through 2030, driven by electric mobility and energy storage. Annual battery demand is projected to rise sharply over the next decade.
This growth places significant pressure on domestic manufacturing. If facilities take longer to stabilise, the industry risks extended dependence on imports, exposing manufacturers to currency volatility and supply-chain disruptions. Budgetary measures that help manufacturing capacity reach steady-state production faster can therefore have a meaningful impact.
Capital and Execution Certainty Matter
Access to long-term capital remains one of the most critical requirements for manufacturers. Battery manufacturing involves high upfront investment and long payback periods. Financing structures that offer longer tenures and lower costs can materially reduce risk and support faster capacity ramp-up.
Equally important is execution certainty. Schemes such as the Advanced Chemistry Cell Production Linked Incentive have laid the groundwork for domestic manufacturing, but their effectiveness depends on clarity around timelines, compliance requirements, and disbursal mechanisms. Predictability enables better planning and more confident investment decisions.
Infrastructure, Approvals, and Skills
Manufacturing timelines are often shaped by non-technical constraints. Delays in land acquisition, power connectivity, environmental clearances, and product testing can slow projects significantly. Streamlining approvals and strengthening industrial infrastructure can reduce these bottlenecks and accelerate time-to-production.
Workforce readiness is another key factor. As battery manufacturing becomes more sophisticated, demand for trained technicians, quality engineers, and safety specialists is increasing. Industry-aligned skilling initiatives can improve productivity and reduce early-stage inefficiencies.
A Pragmatic Budget Ask
From a manufacturing standpoint, the industry is not expecting sweeping announcements in Budget 2026. What it needs is continuity, predictability, and support that reduces execution risk. Measures that strengthen capital access, infrastructure readiness, approvals, skilling, and recycling will help the auto and EV sector translate momentum into durable manufacturing capability.
The opportunity now is to ensure that India’s EV transition is built on stable factories and resilient supply chains, not just strong adoption numbers.
By Pratik Kamdar, Co-Founder & CEO, Neuron Energy
