The Indian automotive industry is going through a transformative phase, driven by the growing demand for energy-efficient internal combustion engine (ICE) vehicles and electric vehicles (EV), and the need for sustainable transportation solutions. However, this transition is not without challenges, as the industry faces rising costs of essential components and minerals. Despite these challenges, the Indian traction battery market is poised to grow in the next five years, says GlobalData, a leading intelligence and productivity platform.
According to GlobalData estimates, the Indian advanced xEV battery market is expected to expand at a compound annual growth rate (CAGR) of 25.7% during the period 2026-2030.
Gorantala Sravan Kumar, Associate Project Manager – Automotive in GlobalData, comments: “The government’s push for electric mobility, coupled with growing consumer awareness and demand for sustainable transportation, is expected to drive growth in the Indian traction battery market.”
Recent data from the Society of Indian Automobile Manufacturers (SIAM) highlights a significant change in market dynamics. While passenger vehicle production rose 25.5% year-on-year in 2025, the industry faces a “clean environment” premium, with rapidly rising costs for exhaust gas cleaning and battery-grade minerals. Platinum, rhodium and palladium prices have seen unprecedented increases, with platinum alone rising 110% in 2025 compared to the previous year.
The market for traction batteries, a critical component for electric vehicles, is witnessing a similar trend. The price of cobalt oxide increased by 209% year-on-year and that of refined cobalt by 146%. Lithium carbonate, essential for rechargeable power cells, has also seen a 10% increase.
Sravan Kumar continues: “Industry stakeholders must focus on ensuring a stable, low-cost supply of essential minerals and components. Collaborative efforts between government and industry players to develop local supply chains and reduce dependence on imports will be crucial to maintain the momentum of the transition to electric vehicles.”
Sravan Kumar concludes: “The Indian automotive components industry is at a crossroads, balancing near-term cost pressures with long-term structural transformation. Rising raw material and semiconductor costs have already begun to erode margins, especially for electric vehicle producers, whose cost exposure is concentrated in batteries and high-tech components.
“While macroeconomic conditions and geopolitical dynamics remain uncertain, and challenges in component sourcing and rising costs, automotive component manufacturers and OEMs that act decisively to control material costs, optimize designs and improve supply chain resilience may emerge with stronger competitive positioning in the 2026 market and beyond.”