India’s electric vehicle (EV) market witnessed strong growth in FY2025–26, supported by robust demand in both electric two-wheelers (e2W) and electric four-wheelers (e4W), along with a significant year-end push, according to data from the VAHAN Portal.
Electric four-wheeler registrations nearly doubled in FY26, rising 91.3 percent year-on-year to 1,93,633 units, compared to 1,01,205 units in FY25. The segment has also shown consistent growth over the past three years, with FY24 recording 80,495 units. Meanwhile, electric two-wheelers registered a healthy 21.8 percent increase, reaching 1.40 million units in FY26, up from 1.15 million units in FY25 and 9,48,586 units in FY24.
The growth momentum gathered pace in the final quarter of the fiscal year. Between February and March 2026, electric four-wheeler sales surged 53.2 percent month-on-month, rising from 14,177 units to 21,716 units. Electric two-wheelers also recorded a strong jump, increasing 70.1 percent to 1,84,300 units in March from 1,08,357 units in February. January had already established a strong base, with 18,875 e4Ws and 1,19,195 e2Ws sold, indicating sustained demand throughout the quarter before the sharp March spike.
Industry experts attribute the FY26 surge to several structural factors. Expansion of charging infrastructure, increasing availability of feature-rich models across price segments, and improved supply chains enabling faster deliveries played a key role. Additionally, better financing options, falling battery costs, and increased localisation efforts helped make EVs more affordable. Year-end dispatches and dealer-level incentives in Q4 further supported higher volumes.
The growth also coincided with rising global uncertainties, particularly tensions in West Asia, which contributed to fuel price volatility and encouraged consumers to explore electric mobility options.
According to Anurag Singh, Managing Director at Primus Partners, the electric two-wheeler market is entering a more mature phase. He noted that e2W market share reached around 9 percent in FY26, up from approximately 6.3 percent in FY25, despite the gradual reduction in subsidies. He also highlighted improved production capacity and better-engineered models entering the market.
Rajat Mahajan, Partner at Deloitte India, said the EV sector gained strong momentum in FY26 due to rising demand for feature-rich vehicles, improving infrastructure, and frequent product launches by original equipment manufacturers. He added that disruptions in fossil fuel supply also encouraged customers to shift toward electric vehicles.
Policy support also played a key role in sustaining growth. These included continued lower GST rates for EVs, improved financing access, and the extension of the PM E‑DRIVE Scheme for electric two-wheelers until July 31, 2026.
Looking ahead, experts expect EV penetration to continue rising steadily, coexisting alongside petrol-powered vehicles. However, fluctuations in crude oil prices may influence demand patterns, as higher oil prices strengthen the case for electrification but can also increase logistics and input costs across the supply chain.
As FY27 begins, industry stakeholders remain optimistic, though the pace of demand growth will depend on fuel prices, policy continuity, infrastructure expansion, and new product launches.
