AS INDIA RACES to electrify its transportation sector, experts are urging the government and industry to reconsider the nation’s growing reliance on electric vehicles (EVs). With global supply chains especially for rare earth magnets under stress, stakeholders warn that a diversified, multi-fuel strategy is essential for long-term sustainability and energy security.
“India cannot afford to bet solely on EVs, especially given our infrastructure limitations, energy mix and geopolitical dependencies,” said Ravindra Patki, Managing Partner at Vector Consulting Group. “A multi-fuel strategy including ethanol, hydrogen, CNG, hybrids, and more efficient internal combustion engines is the only way to ensure both economic and environmental resilience,” he added.
Rare earth magnets: The silent choke point
While EVs are marketed as clean alternatives, their green promise is undermined by upstream challenges, particularly the sourcing of rare earth magnets used in motors. These magnets, essential for high-efficiency EVs, are largely processed in China, which controls over 95 per cent of the global supply chain. China’s demographic and geographic advantages such as vast, sparsely populated regions near Mongolia, allow it to run such operations with minimal public resistance. In contrast, democracies like India and the US face significant hurdles, from environmental concerns to regulatory delays. “The problem isn’t just industrial, it’s geopolitical and environmental,” Patki noted and said, “even countries that mine rare earths often rely on China for processing.” India’s own efforts, such as lithium exploration in Jammu, have already sparked public opposition, underscoring the difficulty of building a domestic critical minerals ecosystem.
EVs: clean or coal-powered?
Another inconvenient truth: most EVs in India run on coal-based electricity. With nearly 80 per cent of the country’s power still generated from coal, the environmental benefits of EVs are not as straightforward as they appear. Add to that the ecological toll of lithium and rare earth mining, and the green image of EVs becomes more complex. “EVs may reduce tailpipe emissions, but their upstream impact from mining to coal-based charging is significant,” said Patki. “We must ask: are we betting on the right technology for India’s context?”
China’s lead, India’s crossroads
China’s head start in EVs is stark. Automakers like BYD and Chery have surged ahead, buoyed by government support and secure access to critical materials. Indian OEMs, by comparison, are struggling to catch up. “Until 2019, India and China were at similar levels of EV adoption. Now, China is far ahead,” Patki observed. “We need to stop playing catch-up on their terms and instead play to our own strengths like ethanol, CNG, and hybrids.” India already has key assets: a robust ethanol and sugar production network, ICE engineering expertise, and a growing CNG infrastructure. With strategic investment and policy support, these could fuel an unique Indian mobility model.
Industry myopia
Patki warns that Indian automakers risk falling into a strategic trap focusing too narrowly on EVs at the cost of broader innovation. “Too many auto component players are chasing short-term gains, without recognising the deeper divergence between EV and ICE platforms,” he said. The message isn’t to abandon EVs, but to approach them with realism.
India can still lead on its own terms. Bilateral deals, like those pursued by the US, can help secure key materials. Meanwhile, investments in ethanol, hydrogen, and hybrid tech can open a new path to sustainable mobility. “The future of mobility is not one-size-fits-all,” Patki asserted. “In a country as diverse as India, geographically, economically, and socially, a multi-fuel strategy isn’t just smart. It’s inevitable,” he ended.
