India’s EV Stocks Under Pressure as China Tightens Grip on Lithium Exports

The Indian Electric Vehicle (EV) Industry is under renewed pressure after China’s decision to impose export restrictions on key lithium battery materials and related technologies with effect from 8 November 2025. The restrictions cover artificial graphite anode materials, cathode materials such as lithium iron phosphate and ternary cathode precursors, as well as high-performance lithium-ion batteries with energy densities of 300 Wh/kg or higher (The Financial Express).

The move has created a challenging situation for electric two-wheeler manufacturers in India, as China plays a crucial role in the supply of lithium battery components globally. It has not only disrupted the availability of battery components but also escalated the manufacturing costs for these companies (News18).

Two Indian EV Stocks Under the Lens

Here are the two Indian EV stocks that have come under the radar following China’s export restriction announcements:

1. Ather Energy

Incorporated in 2013, Ather is India’s fourth-largest electric two-wheeler manufacturing company. It has its headquarters in Bengaluru, whereas the manufacturing facilities are located in Whitefield, Bengaluru and Hosur, Tamil Nadu. The company manufactures a range of electric scooters, including Ather 450 and Ather Rizta.

On Friday, 10 October 2025, Ather Energy shares declined by more than 4%, following the news of China’s export restrictions. The company is highly dependent on Chinese suppliers for sourcing its two-wheeler battery manufacturing equipment and technologies. The export restriction move by China could impact product availability, manufacturing costs, and supply-chain stability (The Financial Express).

However, However, Ather is gradually expanding its partnerships with Indian suppliers to reduce its dependence on Chinese counterparts. The company’s sales figures stand tall, with 1.55 lakh units being sold in the Financial Year 2025 as compared to 1.09 lakh units in FY24. After establishing a strong foothold in South India, Ather is now launching its scooters across the country. The company is also setting up a new factory in Maharashtra, which will significantly boost its production capacity. Industry estimates suggest that by FY31, around 70–75% of all scooters will be electric, which could greatly benefit Ather (News18).

2. Ola Electric

Ola Electric is another top electric two-wheeler manufacturer in India that’s impacted by China’s export restrictions on lithium battery components. The company depends on its Chinese partners for sourcing EV battery components, specifically in its current supply chain. Over the last five trading sessions, Ola Electric shares have lost Rs. 4 to trade at Rs. 50 from Rs. 54 each. In the last one month, the share price has declined approximately 15%. Whereas, in the last one year, the share price has declined 45% (News18).

While the company’s founder and CEO, Mr Bhavish Aggarwal, has publicly stated that while it maintains engagement with China, it is actively seeking alternate sourcing partners in other countries. Ola Electric’s domestic infrastructure is also promising. The Ola Gigafactory began operations in the second quarter of FY26, resulting in the delivery of 4,680 lithium-ion cells. The factory’s initial capacity is 1 GWh, which can be expanded up to 20 GWh. It holds the distinction of being India’s first lithium-ion cell manufacturing unit (The Financial Express).

Another critical development in favour of Ola Electric is that it became the first Indian electric two-wheeler manufacturer to secure the government’s certification for its rare-earth-free ferrite motor. This technology helps reduce the dependency on imported rare-earth motors with permanent magnets (The Financial Express).

What Lies Ahead? A Battle Between Risks and Opportunities

Lying ahead is an interesting battle between risks and opportunities for the Indian electric two-wheeler manufacturers. The export curbs imposed by China bring short-term turbulence, especially for companies heavily dependent on their Chinese partners. However, with strategic partnerships with Indian suppliers and other global manufacturers, EV manufacturers are expected to overcome these challenges and ride the unlimited wave of opportunities in this space. With electric two-wheelers and cars expected to become the majority on Indian roads by 2030, companies like Ather and Ola are poised for greater heights in the future.

As of 14 October (12 noon), Ather Energy shares are trading for Rs. 613.70 apiece at the NSE and Rs. 614.10 apiece at the BSE. The stock has performed considerably well recently, with its one-month return and one-year return standing at 11.55% and 87.16% respectively (Moneycontrol). The path ahead for the company depends on how quickly it can shift sourcing partners and scale new manufacturing without cost or quality breakdowns. If it succeeds, it could emerge stronger.

On the other hand, Ola Electric shares have been under constant pressure. As of 14 October (12 noon), they were trading for Rs. 49.26 apiece at the NSE and the BSE alike. The stock has declined by more than 45% in the last one year. The company’s integrated approach may shape its path ahead. From factory scale to in-house motor innovation, the success depends on constant adoption and execution of new methodologies.

Conclusion

Investors need to see through the market and make diligent investment decisions. While the potential is immense for these two EV manufacturers, the question is whether cost pressures and supply disruption will undercut earnings, or adaptation and policy tailwinds will help them ride the wave.

Sources:

The Financial Express
News18
Moneycontrol