How India is pioneering a sustainable, self-reliant EV battery ecosystem

India’s electric vehicle market is no longer a future idea. It is a sales figure. The country registered 25.5 lakh EVs in FY2025-26, about 8.5% of all new vehicles. The first half of FY2026-27 moved faster still: 17.89 lakh units between April and September, with EV penetration touching 12%, according to JMK Research. As the country works toward its 2030 adoption goals, attention is shifting from the vehicle to the part that drives much of its cost and range: the battery cell.

Lithium-ion batteries power most of these vehicles. Their cost and performance matter, but so do the materials inside them, the electricity used to make them and what happens once they leave the vehicle. These questions now matter more than the number of gigafactories announced. India has built EV demand quickly. The harder test is whether it can make cells, secure materials and recover them at a pace that keeps up with sales.

From assembly to cells

For years, India’s EV conversation was about vehicle assembly and charging. Battery manufacturing is now just as central to it.

The Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, with an outlay of INR 18,100 crore for 50 GWh of capacity, was meant to drive this shift. Progress has been slower than planned. A JMK Research and IEEFA review found that only 1.4 GWh, about 2.8% of the target, had been commissioned by October 2025, all of it by Ola Electric, and no incentives had been paid out. Ola has since scaled its own plan down from 20 GWh to about 5 GWh by FY2029.

Outside the scheme, there is movement. Exide commissioned the 6 GWh first phase of its cell plant near Bengaluru in September 2026, starting with lithium iron phosphate (LFP) cells. Amara Raja and Tata’s Agratas are building plants of their own. Still, India’s cell output was only around 1 GWh at the end of 2025, and most packs made in the country still use imported cells.

Making cells at home matters for more than pride. India imported over USD 3 billion worth of lithium-ion batteries in FY2025, with China supplying about three-quarters, according to IEEFA. Without domestic cell production, it estimates that bill could pass USD 23 billion a year by FY2030.

The materials question

Lithium, cobalt and nickel go into many lithium-ion batteries, and India has little ready access to them. China refines about 74% of the world’s lithium and 80% of its cobalt, and produces 98% of LFP cathode material. India’s own lithium refining capacity is effectively zero. That leaves buyers exposed to price and supply shocks.

This is one reason Indian battery makers have leaned toward LFP, a lithium-ion chemistry that uses no nickel or cobalt. It is also cheaper: BloombergNEF’s 2025 survey put average LFP pack prices at USD 81/kWh, against USD 128/kWh for NMC packs. Sodium-ion is being studied too, for some uses, since sodium is easier to source.

India will still import several battery materials for years. The National Critical Mineral Mission, approved in January 2025 with a government outlay of INR 16,300 crore, supports exploration, overseas mining assets and processing at home. The realistic aim is to spread the risk across more sources and do more of the processing within India.

Cleaner power, cleaner cells

A battery made on a coal-heavy grid carries that carbon with it. Coal still produced about 70% of India’s electricity in 2025, even though coal power output fell 3.4% that year, the first drop in five years. Renewables are catching up. By July 2026, India had 164.6 GW of solar capacity, and non-fossil sources had crossed 300 GW, more than half of total installed capacity.

For cell plants, captive or open-access green power is the most direct way to cut the carbon in each cell. A cleaner grid also makes every kilometre an EV drives cleaner. Bidirectional charging, where a vehicle can send power back to the grid, is still at an early stage in India. As solar’s share grows, though, parked EV batteries could help soak up the midday surplus.

Closing the loop

Every EV sold also raises a harder question: what happens to the battery after its life in a vehicle?

A battery retired from an EV often still holds 70% to 80% of its original capacity. It may no longer suit a scooter or a car, but it can store solar power or provide backup. This second life gets more out of the materials and energy already spent on it.

Eventually, the cells must be recycled. Hydrometallurgical processes can recover lithium, cobalt, nickel and manganese at high purity, and the rules are now pushing the industry this way. Under the Battery Waste Management Rules, 2022, producers must ensure 90% material recovery from EV batteries from FY2026-27. New EV batteries must also contain at least 5% domestically recycled material from FY2027-28, rising to 20% by FY2030-31.

Money is following. In September 2025, the Union Cabinet approved an INR 1,500 crore incentive scheme to build at least 270,000 tonnes of annual recycling capacity for battery scrap and e-waste, expected to yield about 40,000 tonnes of critical minerals a year. Some battery makers are also setting up recycling arms of their own, MaxVolt ReEarth among them, so that used packs have a route back into new supply.

Timing matters. Batteries in today’s EVs will reach end of life in large numbers within the next decade, and collection built now can turn that wave into feedstock. For a country with almost no lithium refining, an old battery may be the closest thing it has to a domestic mine.

What comes next

India’s battery industry is still taking shape, and it will rely on others for several raw materials for some time.

What has changed is that manufacturing, renewable power, new chemistries and recycling are now being planned as parts of one system. If cell plants come online on time and run on clean power, and recycling targets are enforced, India can cut its import bill and give local makers more control over how batteries are sourced, made and recovered. If not, the country risks selling millions of EVs that run on someone else’s supply chain.