Economic Survey 2025 Calls For Higher R&D Spending In Advanced Battery Tech To Boost EV Ecosystem

Economic Survey 2025 Calls For Higher R&D Spending In Advanced Battery Tech To Boost EV Ecosystem

SUMMARY

The Economic Survey 2024-25 called for increased R&D in advanced battery technologies such as Sodium–ion and Solid-state batteries to strengthen India's EV ecosystem

Going forward, policies for electric vehicles must focus on de-risking supply chains and securing intellectual property

The survey said that in the interim, the government should reward EV cell (lithium-ion cell) manufacturers

The Economic Survey 2024-25 has called for increased spending on R&D in advanced battery technologies such as Sodium–ion and Solid-state batteries to strengthen the electric vehicle ecosystem in the country.

Government initiatives like FAME, PLI for auto components and the scheme for promotion of manufacturing electric passenger cars in India (SPMEPCI) demonstrate India’s awareness to build domestic supply chains, the survey noted.

However, it suggested that going forward, policies for electric vehicles must focus on de-risking supply chains by promoting a more self-reliant ecosystem powered by increased R&D in advanced battery technologies. “Securing intellectual property in this domain can prove invaluable,” the survey said.

In the interim, the government should reward companies manufacturing EV cells (Lithium-ion) as most manufacturing and value addition happens up to the cell-making stage.

While the government has been pushing for greater adoption of EVs in the country, India still relies heavily on imports from China for EV production, the survey warned.

“The import intensity of e-vehicle production – especially from countries with whom India has persistent and large trade deficits is very high,” the Economic Survey 2025 said.

India still relies on China for 75% of its lithium-ion battery demand. While China’s dominance in the global EV supply chain has helped India meet its short-term goals, “indigenising the technology and raw materials for electric mobility,” is crucial to sustaining the growth momentum, according to the Economic Survey 2025.

Amid the Centre’s push to increase EV adoption in India, the union cabinet approved the ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme’ with an outlay of INR 10,900 Cr for two years in September 2024.

PM E-Drive, which will effectively replace the FAME subsidy scheme, will provide subsidies and demand incentives worth INR 3,679 Cr for electric two-wheelers (E2Ws), three-wheelers (E3Ws), ambulances, trucks and other emerging EVs.

Under the scheme, the Ministry of Heavy Industries will also launch e-vouchers for EV buyers to avail demand incentives.