The Indian automotive industry is facing challenges as demand rises for energy-efficient internal combustion engine vehicles and electric vehicles. Despite rising costs of essential components and minerals, the Indian traction battery market is expected to grow over the next five years. GlobalData estimates a 25.7% CAGR for the Indian advanced xEV battery market from 2026-2030.

Government support for electric mobility and consumer demand for sustainable transportation are expected to drive growth in the Indian traction battery market. Passenger vehicle production has surged by 25.5% year-on-year in 2025, but costs of exhaust-cleansing and battery-grade minerals are rising rapidly. Platinum prices alone increased by 110% in 2025 compared to the previous year.

The traction battery market, crucial for EVs, is experiencing price surges for essential minerals like cobalt oxide and lithium carbonate. Stakeholders in the industry need to focus on securing a stable and low-cost supply of these components. Collaborative efforts to develop local supply chains and reduce dependency on imports will be essential for the EV transition’s momentum.

The Indian Automotive Component industry is facing short-term cost pressures amidst long-term structural transformation. Rising commodity and semiconductor costs are eroding margins, particularly for EV producers. To maintain competitive positioning, auto component makers and OEMs must control material costs, optimize designs, and enhance supply chain resilience in the face of uncertain macroeconomic conditions and geopolitical dynamics.

Read more at Yahoo Finance: India automotive traction battery market to see growth