Mumbai/New Delhi, Nov. 17 -- Walk into the vehicle development centre of any major Indian carmaker and you'll find dozens of rival cars stripped to their bones, engineers poring over every exposed circuit, nut and wire. Such 'benchmarking' helps companies understand why some models work while others don't, track technology trends, and plan their own vehicle roadmaps.

Increasingly, though, the cars being subject to the microscope are Chinese, not European, Japanese or American. Once distant curiosities, models like the Xiaomi SU7, BYD Seal, Nio ET and Zeekr 7X dominate these teardown bays, as the industry rapidly shifts towards electric vehicles, in which the Chinese are world leaders.

In a private conversation, the top boss at an Indian...