India Electric Vehicle Market Size (2025-2030)

The India Electric Vehicle Market was valued at USD 30.80 billion in 2024 and is projected to reach a market size of USD 101.40 billion by the end of 2030. Over the forecast period of 2025-2030, the market is projected to grow at a CAGR of 26.91%.

The electric vehicle market comprises manufacturing, selling, and the use of electric power-driven vehicles from fossil fuels, i.e., diesel or gasoline. The electric vehicle market is growing aggressively in India. Attracting the interest of producers, investors, and the government as well. The Indian government has laid down targets to enhance mobility and reduce pollution, making it one of the most promising electric vehicle markets in the world. Apart from this, different states have issued steps to promote the use of automobiles by providing incentives such as exemption from road taxes and benefits. Different domestic and foreign automobile companies have shown interest in India's vehicle (EV) market. Big players like Tata Motors, Mahindra & Mahindra, and Hero Electric have already launched their vehicles, while foreign players like Tesla are also considering entering the potential of India's growing EV market.

Key Market Insights:

• The Indian government introduced the PM E-Drive scheme in 2024, focusing on establishing a robust charging infrastructure and promoting a strong EV manufacturing ecosystem.
• Tata Motors maintains a leading position in the EV market, while MG Motor increased its market share to 25% in 2024, up from 13% the previous year.
• The passenger segment grew by 53% YoY, with EV penetration reaching nearly 56% in FY2024. The cargo segment saw an 83% YoY increase, driven by favorable cost economics. Sales increased by 79% YoY, totaling 3,607 units, primarily due to public sector initiatives. Tata Motors captured around 50% of this market in FY2024.

India Electric Vehicle Market Drivers:

Increasing Fuel Prices Will Spur Market Growth in the Projection Period.

The rising cost of fuels in India will be an encouraging factor for the demand for electric vehicles in India. The cost of purchasing fuel-powered vehicles can be less compared to electricity-powered vehicles. Their running costs are higher because of the rising cost of gasoline and diesel. Electric vehicles, on the other hand, have running costs, unlike their fossil fuel-based counterparts. Therefore, customers are likely to look towards embracing vehicles as a response to the rising cost of fuels, and this will drive market growth in the future. In addition to this, the move by the governments to prevent climate change, such as imposing regulations on emissions and phasing out cars gradually, will also drive market growth in the run.

The market will grow as long as the cost of electric vehicle batteries continues to decline.

The Indian automobile industry is known to be price sensitive; any price drop in lithium-ion batteries, therefore, has a significant impact on its growth. One of the most critical reasons electric vehicles (EVs) are being widely accepted is declining battery prices. This pattern helps in bringing down the cost of operating and owning an EV, especially given India's traditionally high prices. The prices of batteries have dropped by 85% in the last decade, which has led to a steep rise in the number of EVs adopted across vehicle classes. The price of battery per kilowatt hour (kWh) was around USD 1200 in 2010; however, by 2024, the price has come down substantially to around USD 130 to 150 per kWh. This is because of many factors, such as higher efficiencies, advancements in cell chemistries, and several other factors.

India Electric Vehicle Market Restraints and Challenges:

People's Safety Concerns About Fire Hazards Are Likely to Slightly Restrain Market Growth.

Electric vehicles have not become popular in India like elsewhere. Also, consumer awareness in the country is very low. Therefore, when fire accidents were recently reported involving Ola Electric, Pure EV, and Okinawa two-wheelers, suspicions were raised about the safety of using these vehicles. Therefore, the Indian government ordered an investigation into these top brands' EV models to find out the reason and hold the guilty party responsible for these safety failures. Then, these players decided to recall their EV models to prevent any possibility of fire. For example, Ola Electric recalled 1,441 units of its two-wheelers, while Okinawa recalled 3,215 units of its electric scooter, the Praise Pro, due to battery issues. Additionally, Pure EV recalled about 2,000 units of its Epluto 7G and Etrance+ models. Additionally, no established EV ecosystem exists in India, which remains one of the issues hindering the widespread adoption of electric vehicles in the region.

India Electric Vehicle Market Opportunities:

The government of India introduced the 'FAME (Faster Adoption and Manufacturing of Electric Vehicles) Subsidy Scheme' to encourage the adoption of vehicles in India. This subsidy allows customers to buy electric (hybrid and battery-based) vehicles at affordable prices. The subsidy scheme, called FAME II (phase), has been further extended up to March 2024. It chiefly targets public vehicle sales. As many as 8.59 vehicles have been retailed under the FAME subsidy scheme till February 2024. Government subsidies also act as an incentive for car manufacturers to invest in manufacturing vehicles. When the manufacturers see increasing demand in the market supported by the government, they are more likely to invest resources and work towards making vehicles. Consequently, consumers can enjoy a range of electric vehicle models. Such subsidies are in line with the government's aims to minimize air pollution and fight climate change. All these elements combined provide a scope for market expansion in the future.

INDIA ELECTRIC VEHICLE MARKET REPORT COVERAGE:

India Electric Vehicle Market Segmentation:

India Electric Vehicle Market Segmentation: By Propulsion Type

• Battery Electric Vehicle
• Hybrid Electric Vehicle

In 2024, by the type of propulsion, the Battery electric vehicle segment held the highest revenue share by nearly 67% and has dominated the market. Battery electric vehicles (BEVs) are the emerging type of propulsion in the EV market. Experts project that the Battery Electric Vehicle (BEV) industry will experience a growth rate of 35% every year from 2023 to 2029. In recent years, there have been technological breakthroughs in battery technology in India that have led to better energy density, driving range and charging speed. These developments have addressed issues regarding range anxiety, making battery electric vehicles more convenient and practical to use. To achieve standardization and simplify assembly, standardized battery cells are widely used in cars. This module-based approach enables scalability according to vehicles' size and range needs. In addition, car manufacturers have made investments. Demonstrate an active interest in manufacturing battery cells locally, which further enhances the development of this business segment. For facilitating the usage of electric vehicle batteries for encouraging production and enhancing the country capacity, the Government of India has taken steps in its Union Budget for 2024 to bring down customs duty on lithium-ion batteries from 21% to 13%. This is targeted at boosting the production capacity within the country as well as fostering the usage of electric vehicle batteries.

India Electric Vehicle Market Segmentation: By Platform

• Two-wheeler
• Three-wheeler
• Four-wheeler

According to the market study conducted in 2024, it has been found that the four-wheeler segment holds a market share and is expected to do so in the future. Compared to two-wheelers and three-wheelers, four-wheelers possess greater driving ranges, hence being more convenient for travel and outings. As a result, electric cars have become increasingly attractive to different consumers. As a part of efforts to curtail greenhouse gas emissions and air pollution, the Government of India is actively promoting the use of cars through offering incentives in the form of subsidies, tax exemptions, and reduced registration fees specifically to popularize their usage. There is, however, an increase in the two-wheeler space. The reason for the increase is the increased adoption of two-wheelers by logistics firms in India. Second, the affordability factor of scooters in India also supports the growth in this segment. Third, charging infrastructure for two-wheelers is relatively simpler than charging stations for cars. Standard charging solutions like home charge or workplace charge suffice to meet the demands of consumers of two-wheelers.

India Electric Vehicle Market Segmentation: Regional Analysis:

Indian electric vehicle (EV) markets exhibit localized trends influenced by state policy, investment in infrastructure, and adoption by consumers. North India, led by Uttar Pradesh and Delhi, has experienced high EV uptake, particularly three-wheelers, through successful government incentives and pollution controls. South India, more specifically, Karnataka and Tamil Nadu, has been at the center of manufacturing and R&D with activity in two-wheelers and commercial EVs. Western states like Maharashtra are promoting the adoption of EVs through tax exemptions and subsidies, while Eastern India, led by West Bengal, is gradually building its EV infrastructure. South India overall is a pivotal region, shaping the direction of the industry with visionary policies and industrial investments.

COVID-19 Impact Analysis on the India Electric Vehicle Market:

The manufacturers of electric vehicles in India weathered the Covid-19 pandemic. Factory shutdowns briefly impacted the supply chain, causing a material shortage that played a significant role in industry growth. The production of these vehicles in India was heavily impacted by the semiconductor shortage. During the year 2020, 4600 electric four-wheelers (e 4W) were sold in India. Despite the growth expected due to the government's FAME II incentives for the purchase of electric vehicles, the lockdowns led by Covid and reduced manufacturing activities resulted in lesser growth than had been anticipated. But this sector is resurgent now because of efforts made by the Indian government and heavy subsidies and incentives at the state level. For example, 4W sales recorded an increase of 287.1% during the year 2021. Additionally, expansion in bus sales, though soon with FAME II-supported e-bus deployment market growth, is still predicted to be driven further.

Latest Trends/ Developments:

The India Electric Vehicle Market is witnessing fast-paced developments fueled by technological innovation, sustainability objectives, and changing industry needs. One of the most important trends is the growing use of autonomous and connected electric vehicles, where AI-driven automation is improving operational efficiency in sectors such as mining and construction. Also, innovation in solid-state and fast-charging battery technology is decreasing downtime and increasing energy storage capacity, which is enhancing the viability of electric vehicles for heavy-duty use. Another development of note is the emergence of hydrogen fuel cell electric vehicles (FCEVs), offering an alternative to battery technology, particularly in areas where charging infrastructure is limited. Governments across the globe are also implementing tighter emission standards and monetary incentives, prompting industries to shift from diesel-based equipment to electric equipment. In addition, leading manufacturers are making investments in modular electric vehicle platforms, allowing scalability and customization for various industrial uses. With increasing demand, partnerships between technology companies and automakers are driving innovation, propelling the industry toward a greener and more efficient future.

 Key Players:

1. JBM Auto Limited
2. Mahindra Electric Mobility Limited
3. Ather Energy Pvt Limited
4. Electrotherm
5. Ola
6. TVS
7. Toyota
8. Renault Group
9. Tata Motors
10. Bajaj Auto