India’s electric moment, still in motion

Bengaluru: Electric vehicles are no longer a novelty in India. Global and homegrown manufacturers are expanding offerings, while a young, increasingly affluent and tech-savvy consumer base continues to drive adoption. Yet industry stakeholders say the EV transition remains in its early stages, with significant untapped potential still to be unlocked.

. India’s modern EV journey began with the REVAi, launched in 2001 by Reva Electric Car Company in Bengaluru. A small city runabout, it became one of the world’s earliest commercially available EVs and marked India’s first serious experiment with electric mobility. From there, the segment has evolved into a far-larger ecosystem, shaped by global entrants and domestic automakers alike.

.India's EV push needs strategic course correction. According to the Vahan portal, electric passenger vehicle (cars/SUVs) registrations stood at 193,633 in FY26. Overall EV registrations reached 2.55 million units, a 25% increase over 2.04 million registered in FY25. EVs accounted for 8.6% of total vehicle registrations, while electric car penetration ranged 4-6%, depending on the month.

. FADA Research data showed 23,506 electric car sales in April, giving the segment a 5.8% share in India’s passenger vehicle market.

. “The Vahan data has clearly shown that EV penetration in the PV space has grown from 0.5% in FY22 to 3.4% in FY26, in a fast-growing overall PV market at 11% CAGR,” says Rajat Mahajan, Partner and Automotive Sector Leader at Deloitte. In absolute terms, there were 1.9 lakh electric PV registrations in FY26, nearly twice FY25’s 1.07 lakh.

. The electric car market today spans global and domestic players, including BYD, VinFast, Tesla, Tata Motors Passenger Vehicles, Mahindra, and Maruti Suzuki. The widening product pipeline across segments and price-points has helped broaden early adoption beyond niche buyers.

. VinFast has positioned India as a key pillar of its global expansion strategy with its manufacturing facility in Thoothukudi, Tamil Nadu. The plant is the Vietnamese automaker’s first outside Vietnam and anchors its long-term commitment to the Indian market.

. “India remains one of the most-significant EV growth opportunities globally, not just because of scale, but because the market is moving from early adoption to ecosystem-led expansion,” says Tapan Ghosh, CEO of VinFast India.

. “…we are investing with a long-term perspective. Product technology matters, but equally important are trust, after-sales support, charging accessibility, resale confidence, and overall cost of ownership,” he adds.

. The company is rapidly building its India footprint, targeting 75 dealerships by year-end, while expanding service and charging partnerships. Its roadmap also includes entry into electric two-wheelers and buses, signalling a broader mobility play beyond passenger cars.

. Despite rising adoption, a gap persists between consumer intent and actual purchases. “Nearly 10% of respondents intend to purchase an EV as their next vehicle, but EV penetration in overall PV registration is 3.4% in FY26, as per Vahan,” reiterates Mahajan, referring to the Deloitte Global Consumer Study (GACS) 2026.

. “This gap does not exist in markets like China and the US, where preference and sales are more aligned,” he adds. “As the ecosystem matures, India will see faster conversion from intent to purchase.”

. Deloitte’s Wheelwatch tracker shows Delhi leading EV adoption, with registrations rising 2.7x year-on-year and penetration reaching 8.3% in FY26. Maharashtra, Gujarat, and Tamil Nadu drove bulk volumes, while Kerala and Karnataka recorded the highest penetration rates.

. Tesla adds fresh momentum

. Tesla’s entry has added fresh momentum to the premium EV segment. The company recently introduced the 2026 Model Y Premium rear-wheel drive at Rs 50.89 lakh, soon after the six-seater Model YL at Rs 61.99 lakh.

. Tesla entered India last year with the Model Y priced at Rs 59.89 lakh. “Tesla will keep investing in India to create a seamless EV experience, with more retail coverage, after-sales services and charging infrastructure,” Tesla Senior Director Isabel Fan said in a statement, as quoted in the media. Globally, the Tesla Model Y has remained the best-selling car across all powertrains since 2023, with around 1.2 million units sold annually.

. Policy support continues to anchor India’s EV transition. Lower GST on EVs, the PM E-DRIVE scheme, and production-linked incentives have strengthened the industry’s base. However, gaps remain in charging infrastructure beyond metros and in reducing dependence on imported battery components, largely sourced from China.

. Foreign EV-makers can access reduced import duties of 15% (versus 110%), if they invest Rs 4,150 crore and set up local manufacturing within three years.

. Poonam Upadhyay, Director, Crisil Ratings, says India remains a structurally-attractive, but demanding EV market. “The volume opportunity is large and adoption is still at an early stage. Price sensitivity is sharper than almost any other major market, while domestic players have built strong scale and service networks,” she adds.

. “A global product at a global price works only in the luxury segment. Sustainable volume requires India-focused products,” she mentions.

. She notes that competition will increasingly shift toward software, range, charging speed, and cost efficiency. “The player that succeeds in the sub-Rs 15 lakh segment, whether domestic or foreign, will shape the market’s next phase.”

. Industry insiders note that while India remains highly price-sensitive, consumer priorities are evolving. Product quality, performance, and features now rank higher in purchase decisions than price. Mahajan adds that price sensitivity has fallen to sixth position, behind ownership experience and brand image.

. “Beyond the vehicle, the ecosystem comprising charging infrastructure, service touchpoints, roadside assistance, and battery recycling needs to be visible,” he says.

. Policy experts also stress that while incentives have helped kickstart adoption, the next phase will depend on infrastructure depth and supply-chain resilience. “Until that gap narrows, India’s EV ambition carries a structural dependency on China for critical components,” says Upadhyay.

. At the same time, India’s low base underscores the scale of opportunity ahead. The next phase of growth will be defined not just by who sells EVs, but by who builds the ecosystem that makes EV ownership effortless.

India’s electric moment, still in motion

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