On World EV Day, the India Energy Storage Alliance (IESA) urged the government to accelerate battery manufacturing incentives and smart grid upgrades. Following record EV sales of 327,901 units in July 2026, the industry warns that infrastructure must evolve quickly to support the surge in electric vehicle adoption and energy storage needs.
The India Energy Storage Alliance (IESA), an industry body, has called on the government to fast-track support for the domestic battery and energy storage sector. The appeal, made on World EV Day, highlights the growing urgency to build a self-reliant supply chain as India’s electric vehicle (EV) market enters a phase of rapid mass adoption.
Data from the industry shows that India’s EV sales hit a record 327,901 units in July 2026, marking a 66% increase compared to the previous year. While this growth signals changing consumer preferences, industry leaders warn that rising vehicle numbers are outpacing the current power and storage infrastructure. Projections suggest that India will require 888 GWh of energy storage capacity by 2035-36 to successfully integrate renewable energy and support the growing fleet of electric vehicles.
To bridge this gap, IESA is pushing for prioritized incentives for the manufacturing of battery components such as cathodes, anodes, and separators. Currently, the domestic EV and storage industry relies heavily on imported technology. Industry experts argue that without localization, this dependency exposes the sector to global supply chain disruptions, which can drive up costs for manufacturers and consumers alike.
Beyond manufacturing, the alliance has stressed the need for smart grid infrastructure. As more EVs connect to the power grid, the system requires real-time intelligence to manage sudden load spikes and variable energy sources like solar and wind. Without these digital upgrades, the grid could face stability issues, potentially hindering the government's decarbonization targets. While Battery Energy Storage System (BESS) capacity has expanded from 0.78 GWh in December 2025 to 8.7 GWh by June 2026, the scale of the required infrastructure remains vast.
Investors and sector observers should note that the industry faces several hurdles. There are concerns regarding the financial viability of some large-scale storage projects, with some tenders suffering from intense price competition that may deter established players. Additionally, there remains a disconnect between the growth of renewable energy capacity and the lagging progress in grid integration and technology adoption. Furthermore, the high cost of raw materials and the dominance of imported components remain primary risks for profitability across the battery manufacturing landscape.
Moving forward, the primary focus for stakeholders will be the pace of government policy implementation. Investors may track announcements related to production-linked incentives, the roll-out of new BESS tender guidelines, and progress on infrastructure spending. The ability of the industry to scale local component manufacturing while ensuring grid stability will be critical factors in sustaining the current growth momentum.