India’s EV demand is investable now, but supply-chain independence is a 2030s story: Bernstein
India’s electric-vehicle industry is scaling rapidly, with EV sales exceeding 2.5 million vehicles in FY26.
India’s electric-vehicle industry is scaling rapidly, with EV sales exceeding 2.5 million vehicles in FY26. But the supply chain remains heavily dependent on Chinese imports: battery cells are 100% imported, with about 75% coming from China, while more than 90% of the rare-earth magnets used in motors come from China. Most Indian original-equipment manufacturers remain primarily assemblers.
Bernstein’s core view is that India’s EV demand story is “investable now,” but supply-chain independence is a slower 2030s story. The market may be underestimating how long it will take to build a domestic supply chain. India is more likely to follow a hybrid path—domestic assembly combined with friend-shored minerals and intermediate goods—rather than China’s model of full vertical integration.
The report rates Sona Comstar, a motor and drivetrain beneficiary, as well as Bajaj Auto, Mahindra & Mahindra and Maruti Suzuki, Outperform. It identifies a key threshold for the bullish case: cell production capacity exceeding 20 GWh by the end of FY28. Capacity below 10 GWh would indicate that execution continues to fall short of expectations.
Bernstein says the EV demand story is investable now, while supply-chain independence may not arrive until the 2030s. The central challenge is execution rather than announcements, and the gap between policy intent and delivery is the decisive issue for India’s EV supply chain.
The report sees potential upside for Sona Comstar, which is developing rare-earth-free motors, along with Bajaj Auto, Mahindra & Mahindra and Maruti Suzuki, all rated Outperform. It flags import-dependent battery-cell, rare-earth-magnet and OEM businesses as downside exposures, saying the market has not fully priced the risk of supply-chain execution.
Key catalysts are whether announced cell projects for FY27-FY29 start production on schedule; whether cell capacity reaches the critical FY28 threshold of more than 20 GWh or remains below 10 GWh; the beginning of meaningful rare-earth-magnet revenue in FY28; and the beginning of meaningful revenue from midstream materials—including cathodes, anodes and electrolytes—in FY29.
Bernstein’s core view is that India’s EV demand story is “investable now,” but supply-chain independence is a slower 2030s story. The market may be underestimating how long it will take to build a domestic supply chain. India is more likely to follow a hybrid path—domestic assembly combined with friend-shored minerals and intermediate goods—rather than China’s model of full vertical integration.
The report rates Sona Comstar, a motor and drivetrain beneficiary, as well as Bajaj Auto, Mahindra & Mahindra and Maruti Suzuki, Outperform. It identifies a key threshold for the bullish case: cell production capacity exceeding 20 GWh by the end of FY28. Capacity below 10 GWh would indicate that execution continues to fall short of expectations.
Bernstein says the EV demand story is investable now, while supply-chain independence may not arrive until the 2030s. The central challenge is execution rather than announcements, and the gap between policy intent and delivery is the decisive issue for India’s EV supply chain.
The report sees potential upside for Sona Comstar, which is developing rare-earth-free motors, along with Bajaj Auto, Mahindra & Mahindra and Maruti Suzuki, all rated Outperform. It flags import-dependent battery-cell, rare-earth-magnet and OEM businesses as downside exposures, saying the market has not fully priced the risk of supply-chain execution.
Key catalysts are whether announced cell projects for FY27-FY29 start production on schedule; whether cell capacity reaches the critical FY28 threshold of more than 20 GWh or remains below 10 GWh; the beginning of meaningful rare-earth-magnet revenue in FY28; and the beginning of meaningful revenue from midstream materials—including cathodes, anodes and electrolytes—in FY29.