The move comes as EV cost advantages over conventional petrol and diesel vehicles continue to narrow.
A quiet policy change in China could push up electric vehicle prices in India, as Beijing moves to reduce export tax rebates on lithium-ion batteries, a key component for EV manufacturing.
China has decided to slash the export tax rebate on lithium-ion batteries from 9% to 6% starting 1 April, with plans to phase it out entirely. The move is expected to raise landed battery costs for Indian manufacturers, many of whom rely heavily on Chinese suppliers such as CATL and BYD. Batteries account for over a third of an EV’s total cost, making any price increase a direct pressure point for manufacturers.
Industry executives said the impact could begin reflecting in the market within weeks, prompting companies to rush inventory purchases before the rebate reduction takes effect. Any sustained increase in battery prices may force EV makers to pass on costs to consumers, particularly in the two-wheeler and passenger car segments.
According to BloombergNEF, average battery prices in China are around $84 per kWh, though lithium iron phosphate cell import prices for India are estimated at $50–55 per kWh. Meanwhile, lithium carbonate prices have surged sharply this year, driven by tighter supply and mine closures.
Analysts note that the impact may vary across manufacturers. Larger OEMs with long-term supply contracts may see limited short-term disruption, while smaller players dependent on spot imports could be more exposed. The policy shift also highlights India’s continued reliance on battery imports despite ongoing efforts to build domestic capacity.
