Vehicle makers specify the cell chemistry and format, buy cells or packs from suppliers (mostly Chinese today), and qualify new local suppliers over 12-24 months. A few build or tie up with captive cell plants (Ola, Tata with Agratas, Hyundai with Exide).
Why it matters
EVs are about 8% of new cars and 11% of new two-wheelers (Business Today, Oct 2026), and the battery is the single most expensive part of an EV. Local cells cut currency and supply risk, and count toward the local-content rules in EV incentive schemes.
Where the value pool sits
Vehicle makers don't earn the cell margin but keep the savings. Captive cells are a cost lever for whoever ramps first; others will buy from Exide, Amara Raja, Agratas or importers.
Key drivers
EV share gains in two-wheelers, three-wheelers and cars
Local-content rules in EV incentive schemes
Captive cell supply as a cost and margin lever
Potential bottlenecks
Qualification of a new cell supplier takes 12-24 months
Chinese LFP cells remain cheaper
Rare-earth magnets for motors are a separate import choke point (see the rare-earth policy)