India’s EV Penetration Reached 8.5% in FY2025-26

India’s electric vehicle (EV) market delivered another strong year in FY2025-26, with total registrations going past 25 lakhs units, a 24% year-on-year increase. Moreover, EV penetration reached around 8.5% of total registrations, up from 7.7% in the previous financial year. While this indicates that EV adoption continues to strengthen, the market still remains behind the government’s long-term target of 30% EV penetration by 2030.

While the market is price-sensitive, the growth drivers varied significantly across segments:

  1. Electric two-wheelers (E-2W): Remained as the largest contributor, accounting for nearly 58% of total EV sales.
  2. Electric Three-wheelers Passenger (E-3W P): Passenger segment peaked in December 2025 at 78,057, with mandatory registration of e-rickshaws in West Bengal being one of the key factors. However, sales moderated after December 2025 as PM E-Drive incentives for the L5 category were exhausted.
  3. Electric Three-wheelers Cargo (E-3W C): Unlike e-3W P, the cargo segment witnessed steady growth. This was driven by the Total Cost of Ownership (TCO) benefits for last-mile delivery fleets.
  4. Passenger vehicles (E-cars): Emerged as the fastest-growing segment with an impressive 86% YoY increase. This growth was achieved independently of PM E-DRIVE support, as electric cars are excluded from the scheme’s purchase incentives, signaling strong organic demand.
  5. Electric Goods Vehicle (E-GV): This segment, comprising Light, Medium, and Heavy Goods Vehicles, saw a massive 172% YoY growth, with adoption reaching 1.4% (up from 0.6% in FY2024-25). This sharp increase was driven by the first-time inclusion of e-Trucks (medium and heavy Goods Vehicle) under the PM E-DRIVE incentives, rising adoption of light goods vehicles for last-mile logistics and large-scale fleet conversions by e-commerce players to meet corporate ESG goals.

Table 1: % EV Penetration YoY Growth

Source: Vahan Dashboard, Telangana Open Data, JMK Research
* For March 2026, Telangana data is not included.
Note: E-GV includes Light Goods, Medium Goods and Heavy Goods vehicles as per Vahan, which are N1, N2 and N3 trucks.

Key Market Trends in FY2025-26

  • Legacy OEMs Gained Share in Electric Two-Wheelers
    • Traditional players such as TVS Motor, Bajaj Auto and Hero MotoCorp controlled 61% of the e-2W market. Their success was driven by existing large dealer networks, stronger after-sales support, improved product quality, and greater brand trust.
  • Passenger EV Market Became More Competitive
    • Tata Motors, although remained the market leader in E-Car’s segment, its market share declined sharply from ~57% in FY2024-25 to ~39% in FY2025-26. This was due to stronger competition from JSW MG Motor, Mahindra and Hyundai, which expanded through new launches and better product positioning.
    • The entry of VinFast and Maruti Suzuki in H2 FY2025-26 made market more competitive particularly within the INR 12–25 lakh price band, which accounts for a large share of urban SUV demand. At the same time, India’s charging ecosystem continued to improve, with public charging stations crossing 27,000 public charging stations by March 2026, making electric SUVs more practical for both city and highway use.
  • March 2026 Became a Record Month
    • March 2026 set an all-time record with 2.8 lakh registrations. Several factors contributed to this strong growth, including year-end promotional pricing, concerns around future price increases and high procurement activity from commercial fleet operators. Additionally, many buyers sought to secure benefits under the PM E-Drive scheme before the incentive deadline for e-2W and e-3W.

Outlook for FY2026-27

The strong conclusion of FY2025-26 provides a robust foundation for the coming year. The Indian EV market is well-positioned to reach a 9.5% to 10% penetration rate in FY2026-27. This milestone is highly achievable, considering the PM E-DRIVE deadlines for electric two-wheelers and three-wheelers (L3 category) are extended to Jul 31, 2026, and March 31, 2028, respectively. Ultimately, reaching the double-digit figure will depend on continued progress in charging networks, deeper domestic localization, and the continued improvement in financing and new vehicle models.