Dragon in the driving seat: As China becomes the epicentre of the electric age, India feels the tremors

Economic Times

2 days ago

Here's something you should do. Open Google and type Shanghai Auto Show. Then feast on the future of the automobile.
No, that is not an exaggeration. From Jetour G900 to Jetour F700 to Xiaomi SU7 Ultra to BYD Denza Z to Chery iCar V23 to Zeekr Mix to SongSan Summer to BAIC ArcFox 77 o to JAC Motors Define-S, it was the shape of the future on display.
Among these, the Xiaomi SU7 Ultra was a fourseater car that had destroyed the Nurburgring (a racing circuit in Germany where the world's fastest cars set a time for bragging rights) lap record, bettering Rimac Nevera, a hypercar, and the Porsche Taycan Turbo GT.As tech magazine Wired put it, the autoshow was a warning to the West. Auto journalists from Motortrend , a US magazine, called it 'a mindmelting mass of color and noise, hardware and software wrought as cars and trucks and SUVs that at times defy comprehension and categorization'.
The West dominated the era of fossil fuel-chugging cars. China is now defining the electric era in automobiles as its undisputed epicentre. Once clunky, fossil fuel-guzzling machines, cars are now smart and connected. They are akin to an electronic device rather than a mechanical one, and this transformation is most vividly playing out in China.
Even as Tesla, the world's preeminent EV automaker, announced its plans to open its showroom in the Maker Maxity Mall at the Bandra Kurla Complex in Mumbai on July 15, India—the world's third largest auto market —would be feeling the heat more from the heft of the Chinese EVs in the coming days.THE RED CHARGE
India's electric passenger vehicle (PV) market, though still nascent at 2.6% of total vehicle sales in 2024, is charging up.
Tata still leads with an approximately 35% EV market share in the first half of this year, but the game is evolving fast. Buoyed by the success of the Windsor EV, MG Motor India commands nearly 30% of the EV market.
Tata Motors has been the leader of the EV pack for a while, but JSW MG Motor India is snapping at its heels. Its Windsor EV, a minivan, an MPV in the era of SUVs, has become a runaway hit with buyers.Critically, in India, the Chinese have become smart in positioning, and in finding niches that rivals have moved away from.
While Indian OEMs continue to prioritise SUVs—54% of all car sales in 2024—Chinese automakers are cleverly targeting under-served segments. MG's Comet (starting at ₹6.17 lakh) and Windsor EVs are gaining ground. It is pertinent that nonSUVs—including compact city cars, MUVs and sedans—together account for 46% of India's auto sales. 'Our ABC philosophy—A–segment price, B–segment size, C–segment space—is exactly what the urban consumer wants,' says Anurag Mehrotra, MD of JSW MG Motor India. 'We look for gaps in the market and align our offerings accordingly,' he adds.MG and BYD have adopted a premium, tech forward strategy, targeting urban elites with advanced driver assistance systems (ADAS) , 450+ km range, and sharp designs across body types. Tata and Mahindra are primarily focusing on SUVs like the Nexon EV and XUV400 (under ₹15 lakh).It helps that brands like MG and BYD use modular EV platforms like BYD's e-Platform 3.0 to quickly adapt to different market segments. Offering AI powered infotainment, sleek interiors, fast charging capabilities and strong connectivity features, Chinese EVs outclass even premium western rivals—often at a fraction of the cost. Vehicles like the MG ZS EV and BYD Seal aren't just electric, they are software-defined devices catering to India's increasingly tech-savvy buyers.'Chinese companies play the volume and pricing game,' says Rajeev Chaba, veteran auto executive and former chairman of JSW MG Motor. 'They are agile, fast to market and quick to respond to customer needs.'BYD is building a premium electric niche, say its dealers. Its ATTO 3, Seal and newly launched Sealion 7 ( ₹30-55 lakh) are positioned as luxury-tech powerhouses—offering compelling alternatives to western brands atone-fourth the cost. Operating in a more premium price range, they aim to sell 15,000 units in 2025.
WAY OF THE FUTURE
The Chinese are doing this in India with what is essentially last year's tech. What should make India—and even western carmakers—worry is that China's march up the Indian EV table is happening even as they are prepping even better cars back home. The Shanghai Auto Show 2025 underscored China's global ambitions as well as tech prowess. With 1,400 cars from 26 countries and over 1 million attendees, the show revealed just how far Chinese EV tech has advanced. From ultra-fast chargers to flying cars and in-car theatres, the event showed how far ahead China is.A sample. BYD's 1,000 kW chargers deliver 259 miles in just 5 minutes. CATL has gone even further: 323 miles in 5 minutes at 1,300 kW. Next-gen models with eye-popping power and tech include BYD Denza Z (1,000 hp), Xiaomi SU7 Ultra (1,526 hp), and Jetour G900 (with water propulsion).Then there are breakthroughs in autonomous driving like level-3 self-driving by Xpeng and Zeekr, as well as steer-by-wire and brake-by-wire tech from Nio, IM Motors and Changan.Interiors stand out in Nio ET9 while Huawei AITO M9's in-car projector is unlike anything seen in an automobile. There are affordable EVs too—Xpeng's M03 Mona ($16,800-22,000) and Chery's iCar V23 ($13,000) show China's commitment to mass-market accessibility.As if all this wasn't enough, flying cars—Xpeng's electric vertical take-off and landing (eVTOL) concepts and CATL's urban air mobility plans—revealed China's long-term ambitions.
Meanwhile, the western brands looked conservative by comparison. Even high-end players like Volkswagen and Toyota focused on catch-up features, while Chinese models led in innovation, speed-to-market and customer delight. China's dominance in the EV space is no accident. Decades of government policy, fierce domestic competition (supercharged by Tesla's early presence) and a national obsession with technology have helped Chinese automakers surge ahead. Today, China controls 85% of the world's battery manufacturing capacity, giving it an unmatched cost and tech advantage.At its core, China's automotive rise was a carefully cooked recipe with the following ingredients:
1. Government foresight : Subsidies, charging infrastructure and export incentives fuelled an EV-first ecosystem.
2. Scale and speed : China moved fast—from concept to showroom in under 24 months.
3. Vertical integration : Battery, software and car production happen under one roof.
4. Global vision: From budget hatchbacks to luxury SUVs to eVTOLs, China builds for every customer segment globally.Add to this the alleged instances of corporate espionage on western automotive firms, and the dish is ready.So much so that while earlier innovation flowed from West to East, now it's the reverse. Chinese automakers are setting global standards in EV design, software, battery tech and autonomous driving. 'In many ways, the West is now playing catch-up,' says Ravi Bhatia, president of auto market researcher Jato Dynamics. 'China isn't just innovating faster, it is commercialising at scale.'
ROADBLOCK CALLED GEOPOLITICS
It would be a relief to Indian and western automakers in the country that geopolitical tensions and India's FDI restrictions have complicated Chinese OEM expansion. If the Chinese were less antagonistic and more conciliatory—like the Japanese in the 1980s—this would be an easy story of success, akin to what Suzuki did with Maruti in the 1980s.Thankfully for other automakers, they are not, and as a result Chinese OEMs face FDI restrictions, due to which they have challenges like 110% import duties on cars built elsewhere.MG's tie-up with JSW and BYD's alliance with MEIL (Megha Engineering & Infrastructures Ltd) are efforts to localise and sidestep such regulatory barriers. MG has invested ₹4,000 crore to expand Indian capacity to 300,000 units. BYD, with ₹1,600 crore invested, eyes India as an export hub for South Asia.Their portfolios remain narrow—MG has three EVs, BYD has four. For now. As and when they do bring their latest to India, aided by partnerships with Indian companies, it would become tougher for Indian automakers. MG has 380 dealerships across 170 cities, aiming for 520 by the end of 2025, while BYD is expanding from 24 to 63 outlets, focusing on high-end metro buyers and B2B.
With a slew of western names with Chinese connections, like Leapmotor (via Stellantis) and Geely (through Volvo), entering the fray, the Indian EV market is entering its most competitive phase yet. As Bhatia puts it, 'Chinese EV makers are leapfrogging. EV's 2.6% share in India is just the beginning. The real battle lies in who defines what a car will be in the next decade.'
WATCH OUT Players like Tata Motors and Maruti Suzuki face a stark choice: rapidly localise battery and EV production under India's production-linked incentive (PLI) schemes or risk falling behind.'Maruti Suzuki's delayed EV launch with the Grand Vitara, unveiled at the latest auto show, reflects a cautious approach amid India's sluggish EV adoption. Swift action is critical to regain momentum in this niche but growing market,' says Bhatia.They also have to invest in innovation and hire non-traditional talent to reimagine the automobile the way the Chinese have done. What might also help is looking at the market beyond SUVs.While Indian auto companies benefit from strong brand loyalty and a vocal for local appeal, Chinese brands are slowly overcoming scepticism with reliability, tech, value and a variety of body types. That gap will increase if extraordinary effort doesn't go in.They are clearly trying. Tata's Acti.ev and Mahindra's Inglo platforms have cut costs and sped up production. Mahindra is investing ₹12,000 crore by 2027 to ramp up EV and battery manufacturing. It also recently launched BE 6e and XEV 9e in the ₹22-30 lakh price range. Both Mahindra and Tata have lined up several premium electric PV launches for 2025. Tata Motors' premium electric SUV Avinya is expected towards the end of the year.But the broader story is clear: China has redefined what a car can be and what global consumers expect. For Indian and western players alike, the lesson is clear: adapt, localise and innovate even more—or be left behind in the rear-view mirror of a fast-moving Chinese EV.