"Today, 15% of our business in India comes from EVs, primarily through partnerships with Tata Motors and Mahindra. By 2029, we expect this to increase to 46%. For instance, we supply Tata with onboard chargers and DC-DC converters, while Mahindra sources e-axles from us," Jayakumar G., group president and managing director of Valeo India, told Mint. "The next wave of opportunities will likely come from OEMs (original equipment makers) like Maruti Suzuki, Hyundai and Kia as they finalize their EV plans."

Valeo India sees EV content value grow 10 to 20 times as much as conventional internal combustion engine (ICE) vehicles.

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Demand for EVs has fallen in India, hurting companies such as Tata Motors, as the government either reduced or completely withdrew incentives offered to consumers. The market for battery-powered mobility is still nascent, accounting for about 2.5% of the annual passenger vehicle sales of about 4 million units. Valeo, however, remains optimistic about the longer-term outlook.

"Over the last three months, we've seen EV penetration in passenger vehicles dip slightly. While this might be a short-term trend, the long-term outlook remains positive," Jayakumar said. "The GST (goods and services tax) and road tax benefits, along with incentives like the PLI (production-linked incentives) scheme, are helping bridge the price gap between EVs and ICE vehicles."

Globally, markets like China lead with nearly 50% EV penetration thanks to consistent government support, he said.

"But in India, internal combustion engine vehicles will still grow, and EVs will also grow alongside it. And for us, the EV business will grow with the content increase (in each vehicle). And then after five years, there'll be a kind of a tapering off. The growth may be slower, and then there'll be a tapering off," Jayakumar said, adding, "At Valeo, we continue to invest in ICE technologies as well."

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The company remains invested in its ICE business, which it expects to expand at a compound annual growth rate (CAGR) of 4.4-5% over the next five years.

Valeo, however, forecasts that EV penetration in India's passenger vehicle market could hit 29% by 2030. Its estimates stem from a study that incorporates automakers' strategies and is refined annually to account for market changes.

Localization remains at the heart of Valeo's India strategy, especially with the PLI scheme driving cost competitiveness. The company plans to invest ₹700 crore over the next five years to develop high-voltage electronics capabilities to serve the EV market.

While the French supplier is betting on localization and cost competitiveness to drive affordability for EVs in India, it calls for continued government support to support the industry in the interim.

"We will face occasional blips (in EV sales), but they will smoothen out over time. The stability of government policy is key," Jayakumar told Mint. "Until we reach an inflection point, subsidies, incentives and tax benefits must continue. Once we achieve scale, costs will come down naturally."

"For example, battery costs have dropped significantly over the last decade, bringing EVs closer to affordability. Powertrain localization is another critical area," he said. "While we still rely on imports, we are ramping up deeper localization year after year—2026, 2027 and 2028 will see continued progress. As localization improves, costs will come down further."

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He expects the growth of the electronics ecosystem—supported by both industry efforts and government initiatives—to help make EVs even more cost-competitive.

"Over time, EVs will be on par with ICE vehicles in terms of price. Today, EVs still rely on government subsidies to bridge the price gap," said Jayakumar. "However, if you consider the total cost of ownership—factoring in lower running costs—EVs are already a better and greener choice."