India’s automotive sector is undergoing a transformative phase as demand for energy-efficient internal combustion engine (ICE) vehicles and electric vehicles (EVs) rises, alongside the growing need for sustainable transportation solutions. However, industry stakeholders face mounting challenges from escalating costs of critical components and minerals.
According to GlobalData, a leading intelligence and productivity platform, the Indian traction battery market is expected to witness robust growth over the next five years. Estimates indicate that the advanced xEV battery market in India is projected to expand at a compound annual growth rate (CAGR) of 25.7% between 2026 and 2030.
Gorantala Sravan Kumar, Associate Project Manager – Automotive at GlobalData, said, “The government’s push for electric mobility, coupled with increasing consumer awareness and demand for sustainable transportation, is expected to drive growth in the Indian traction battery market.”
Recent figures from the Society of Indian Automobile Manufacturers (SIAM) reflect a notable shift in market dynamics. Passenger vehicle production surged 25.5% year-on-year in 2025, but the industry is navigating a “clean environment” premium, with prices for exhaust-cleansing and battery-grade minerals rising sharply. Platinum, rhodium, and palladium have seen significant hikes, with platinum alone increasing 110% in 2025 compared to the previous year.
The traction battery segment, a key component for EVs, has faced similar pricing pressures. Cobalt oxide prices soared 209% year-on-year, refined cobalt increased 146%, and lithium carbonate—vital for rechargeable power cells—rose by 10%.
Sravan Kumar highlighted the importance of supply chain strategies, stating, “Stakeholders in the industry need to focus on securing a stable and low-cost supply of essential minerals and components. Collaborative efforts between the government and industry players to develop local supply chains and reduce dependency on imports will be crucial for sustaining the momentum of the EV transition.”
He added, “The Indian automotive component industry is at a crossroads, balancing short-term cost pressures with long-term structural transformation. Rising commodity and semiconductor costs have begun to erode margins, particularly for EV producers whose exposure is concentrated in batteries and high-tech components. Auto component makers and OEMs that act decisively to control material costs, optimize designs, and enhance supply chain resilience may emerge with stronger competitive positioning in the market of 2026 and beyond.”
