Will the conflicting signals of Trump affect India’s growing EV Car Market

Will the conflicting signals of Trump affect India’s growing EV Car Market

By Shubh Arora

New Delhi, March 10

U.S. President Donald Trump’s recent decision revoking a 2021 executive order signed by his predecessor Joe Biden that had sought to ensure half of all new vehicles sold in the US by 2030 to be electric vehicles (EVs), is bound to create shock waves around the world.

What signal does Trump’s message send out to automakers around the world and more specifically to car manufacturers in India given the big push the Modi government has been giving claiming that 50 per cent of all vehicles sold by 2030 must be EVs.

The Indian government’s push for EVs was further reinforced by the landmark Auto Expo 2025 at Pragati Maidan which saw most of the car companies display a whole range of new electric cars.From the total of 43,21,033cars sold in the Indian car market in 2024, 110308 were EVS while 100370 were hybrid cars that combine petrol and an electric mix engine but so far these comprise only four per cent of the market.

One of the most popular EV models on display at the Auto Expo was the MG Windsor EV which in a short while after its launch has outsold rival models in the EV passenger segment including the Tata, Mahindra and Citroen segments.From the 28 vehicle launches planned for 2025, 18 are electric.

Global sales of EVs were expected to touch around 15.1 million in 2025 according to S&P Global Mobility. But Trump’s statement has created an air of uncertainty admit auto dealers. Since car production has become a global activity, how will imposition of tariffs affect the industry? South Asian car manufacturers including shares of Japanese automakers and South Korean battery makers declined following Trump’s statement. This will have a direct bearing on us as Japanese and South Korean cars enjoy premium status in India and also because components for EV batteries are imported here.

Car makers have adopted a wait-and-see-position with automakers accepting that in the coming months, they need to proceed with more caution. It must be highlighted that the 39 new car models launched in 2024 were using a mixture of technologies. Fourteen models were powertrain electric vehicles, 23 new petrol and diesel models launched were using Internal Combustion Engine while hybridsincluding the petrol and electric mix engine are also gaining popularity.

SUVs are the latest craze in the subcontinent, and 20 new models of SUVs were launched in 2024. Auto manufacturers believe SUVs are the future and these cars are also offering various engine options.

Following the global trend, prior to Trump’s statement, car companies, including India, were working towards reducing their carbon footprint by focusing on EVs. Maruti launched its first electric car called E Vitara at the Auto Expo 2025 with a cost price of between Rs20-25 lakhs. It has two BYD- sourced battery packs- 49kwh and 61kwh AWD Variant, and is expected to deliver upwards of 500 km on global test cycles.

Hyundai’s Creta EV is another landmark launch and is being pitted as a direct competitor to E-Vitara. Mahindra also showcased two new EV models including BE 6E and the XEV both of which are SUV models while the Tata group, not to be left behind, showcased the Harrier EV.

While there is no doubt that EVs will help fight the pollution battle, these cars will bite into the pocket of the consumers since they are far more expensive with even the cheapest EV car costing around Rs 6.9 lakhs. On top of this, EV batteries have a lifeline of between 6 to 8 years and are expensive to replace. To cite an example, the cost of replacing a Tata Nexon EV’s battery will cost the consumer between Rs 5 to 5.5 lakh.

The heart of an EV is its lithium-ion battery but this mineral is difficult to mine and its extraction process can take between 10 to 24 months. Presently, lithium is being imported from Australia and Argentina.Some of the components of these batteries are imported and automakers are scared that Trump’s imposition of tariffs might see the price of these batteries rise further. At present, India is known to import a large number of components and also EV batteries from China.

There are safety concerns around battery technology. In October 2024,an EV went up in flames in Bengaluru but nobody knows the exact reason. EVs are known to have caught fire in the west also and both Ford Motors and General Motors lost billions of dollars having had to recall their EVs because of rare manufacturing defects in the lithium-ion battery cells.

An exponential increase in EV cars will require a proportionate increase in power supply to recharge these batteries. Climate change has seen temperatures surge across the Indian subcontinent which has led to an increase in power demand especially during the summer months. The India Energy and Climate Centre has predicted that India can experience significant power shortages for both households and industry between 20 to 40 gigawatts from 2027 onwards. This in turn will makecharging these batteries an expensive proposition.

As per the Indian government’s vision, EV charging stations must be installed every three km in cities and every 35 km on both sides of highways. But they have not spelt out how they hope to achieve this. Nor have they informed EV drivers how much they will be expected to pay to recharge batteries given that the government is predicting that sales of EVs will touch over a billion cars by the end of this decade.

There are environmental costs attached to EV batteries which are known to have a high carbon imprint and are also known to cause environmental degradation and deforestation and removal of topsoil.

Toxic fumes are released during the mining process and because this is a water-intensive activity. In 2016, hundreds of protestors threw dead fish taken out of the waters of the Liqui river onto the streets of Tagong in Tibet denouncing the toxic chemical leaks at the Ganzizhou Ronga Lithium Mine which had resulted in polluting the local ecosystem. The other problem is disposing of these batteries especially if they are left in landfills where the harmful materials in these batteries can seep into the soil and water polluting them. There is no effective process to reverse the cobalt contamination of the soil which is known to be polluting for both plants, organisms and humans.

Manoj Gupta, an entrepreneur running a gift item business in Karol Bagh, New Delhi has deferred the idea of buying a new EV for two reasons. He is afraid that there will be a spike in the cost of the car once US tariffs kick in. The reason why I had wanted to buy an EV was because of lower running costs and because it was of the tax benefits but I remain a little sceptical about charging the vehicle. I can do it at home from an AC socket but that is a slow process and will take almost 24 hours. The company installs wall box chargers for free which is a faster process but it will still take six hours for the battery to reach an 80 per cent charge,’ Gupta pointed out.

Range anxiety is another widespread concern because of the huge difference between the promised and real mileages especially with cars loaded with luggage. An official from Mercedes-Benz Research and Development, India, admits, Range anxiety has been considered one of the biggest hindrances to EV adoption.

But the good news for EV cars is that EV battery components that had earlier to face major customs duties have been totally scrapped in the Union Budget 2025. This will help foreign EV makers especially those in the US Tesla, and China to sell their EV battery materials here. Among the many car makers eyeing India’s emerging market is Tesla owned by Elon Musk. It seems ironical that while we are slashing custom duties, Trump has imposed tariffs on several countries including China and India.