Securing the supply chain: Preparing for the electric vehicle raw material challenge

India’s electric vehicle (EV) journey has evolved from cautious early adoption to rapid acceleration, driven by strong government support, favorable economics, rapid infrastructure development, technological progress, and changing consumer preferences. This transition is not just essential, it is inevitable for India’s sustainability goals.

However, the path is complex. A critical underpinning of EV growth is the supply chain for raw materials, especially lithium, cobalt, nickel, manganese, and rare earth elements, that enable battery production and motor manufacturing. India currently depends heavily on imports of these critical minerals. Global reserves and processing capabilities for these materials are highly concentrated, with top three producing nations controlling over 70 per cent of global production. Processing operations are even more concentrated, with China dominating across the value chain. This geographic concentration exposes economies to geopolitical risks, supply chain disruptions and price volatility. To mitigate these risks, countries worldwide are pursuing strategies centered on supply chain diversification, recycling, and material innovation. Countries such as U.S. and EU are focusing on expanding local mining operations, building refining and processing facilities, and incentivising investments through policy frameworks such as tax credits and subsidies. On the international front, strategic partnerships are being forged with resource-rich countries outside traditional supply hubs to diversify sourcing.

For India, EVs represent the most cost-effective and scalable solution to meet its climate targets. To achieve its EV ambitions, India must adopt a multi-pronged strategy combining short-term measures for supply security with medium- and long-term initiatives aimed at developing domestic capabilities and fostering technological leadership.

India is already pursuing trade agreements with mineral-rich nations, fast-tracking import approvals, and acquiring overseas assets such as collaborations with Argentina for lithium and Australia for critical minerals. Domestically, exploration and development of deposits is supported by policy frameworks. Government schemes like Production Linked Incentive programme are catalysing investments in advanced chemistry cells and battery components, while circular economy measures such as Battery Waste Management Rules and pilot recycling projects are reinforcing sustainability. Despite challenges around raw material availability and supply chain vulnerabilities, India’s EV transition offers a key opportunity to reduce emissions, strengthen energy security, and become a key leader in clean mobility.

The next decade will be decisive. Success will depend on India’s ability to integrate supply chains, scale manufacturing, and encourage innovation-making electric mobility the cornerstone of India’s sustainable growth story.