The electric vehicle sector in the country is not growing as fast as it should. Due to which, not only are Chinese companies rapidly entering this sector, but the dependence on Indian companies is also increasing. That is why economic research institute Global Trade Research Initiative (GTRI) said on Friday that the government should allow the domestic electric vehicle (EV) sector to grow naturally without relying on incentives, so that the country does not become an EV colony for China. Let us also tell you what GTRI has said.
There are challenges like no other in India.
GTRI said India faces challenges in adopting electric vehicles on a large scale, which other countries do not face. GTRI said these challenges include 80 per cent of electricity being generated from fossil fuels such as coal, frequent power outages and reliance on imports of components needed to manufacture electric vehicles in the country, such as batteries and critical minerals.
GTRI said that considering these challenges, India has an opportunity to allow its EV sector to grow naturally rather than entering the field with large incentives or relying on Chinese imports. By allowing market forces to drive the growth of the sector, India can avoid becoming an EV colony for China and carve its way into the global EV landscape.
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Transfer of production to ASEAN countries
The research institute said there is an earthquake in the global EV market, due to which the United States, the European Union and Canada have imposed high tariffs and restrictions on the import of EVs and their parts from China. These sectors account for about half of China’s global EV exports and in a strategic shift, China is shifting its production to ASEAN countries and setting its sights on India.
GTRI founder Ajay Srivastava said these production units will continue to rely heavily on imports from China, because 70 to 80 percent of components, including batteries, come from there. Thailand, the first country to allow Chinese companies to produce locally, is already facing challenges from rising imports and complaints of poor sales from established manufacturers. He said there is also a risk of China placing additional electric vehicles in India, because its access to developed markets will be difficult.
