India’s electric vehicle (EV) market has continued its upward trajectory in the first half of the financial year 2026. Between April 2025 and September 2025, over 11 lakh EVs were sold, marking a 22.9% year-on-year growth compared to the 8.95 lakh units sold during the same period in FY2025.
This milestone indicates that India is firmly on track to achieve 20 lakh+ EV sales by the end of FY2026, similar to FY2025, when nearly 19.7 lakh units were recorded. However, recent tax reforms under GST 2.0, which reduced levies on internal combustion engine (ICE) and hybrid vehicles, are beginning to influence the EV growth story, especially in the passenger car segment.
EV Sales Performance in H1 FY2026
Half-Yearly Growth
- EVs sold (Apr–Sep 2025): 11 lakh units.
- EVs sold (Apr–Sep 2024): 8.95 lakh units.
- Growth: 2.05 lakh units (+22.9%).
With this pace, India is well-positioned to reach or even exceed last year’s annual total of 19.7 lakh EVs.
September 2025 Snapshot
- Total EV sales: 1.82 lakh units.
- August 2025 sales: 1.88 lakh units.
- Month-on-Month decline: -3.3%.
This slight dip suggests that while EV adoption is robust, market dynamics are shifting in response to new pricing structures for ICE and hybrid models.
EV Car Segment – Signs of Pressure
The most notable slowdown has been observed in the EV passenger car segment.
- August 2025 EV car sales: 18,290 units.
- September 2025 EV car sales: 15,100 units.
- Decline: -17.4%.
This decline coincides with the implementation of revised GST rates:
- EVs continue at 5% GST.
- ICE and hybrids now attract as low as 18% GST (earlier 28%).
The gap has narrowed from 23% to 13%, making ICE and hybrid cars relatively more affordable. As a result, EV penetration in the passenger car market has slipped from nearly 5% to around 4%.
Electric Two-Wheeler Market – Resilient Growth
Despite the GST effect on cars, the two-wheeler EV segment remains largely unaffected.
- August 2025 sales: 1.05 lakh units.
- September 2025 sales: 1.04 lakh units.
- Decline: Just -1,000 units.
This resilience is due to several factors:
- Affordable pricing compared to EV cars.
- Strong demand from urban youth and commuters.
- State subsidies and FAME incentives continuing to boost sales.
With two-wheelers forming the backbone of India’s mobility, this segment will remain the largest driver of EV adoption in the near term.
Electric Three-Wheeler Market – Stable Demand
The three-wheeler EV segment also continues to see steady adoption.
- August 2025 sales: 63,500 units.
- September 2025 sales: 61,000 units.
- Decline: -2,500 units.
Electric three-wheelers are particularly popular among commercial operators for their low running costs and government incentives. Fleet buyers and last-mile delivery companies continue to support demand in this space.
Key Reasons Behind EV Growth in H1 FY2026
- Government Push – Incentives under FAME II and state-level EV policies have lowered the cost of ownership.
- Lower Running Costs – EVs offer significant savings compared to ICE vehicles, especially for high-mileage users.
- Expanding Model Portfolio – More carmakers have entered the EV space with diverse offerings, from affordable hatchbacks to premium SUVs.
- Improving Infrastructure – Charging network expansion across metros and Tier-2 cities has reduced range anxiety.
- Rising Fuel Prices – High petrol and diesel prices continue to push cost-conscious consumers toward EVs.
Challenges Emerging for EV Adoption
Despite strong growth, certain challenges are starting to emerge:
1. Reduced GST Gap
While EVs continue at 5% GST, ICE and hybrid vehicles now attract just 18% GST. This narrows the pricing advantage of EVs, particularly in the passenger car segment.
2. Price-Sensitive Buyers
The car segment remains highly price-sensitive. With cheaper ICE and hybrid alternatives now available, some buyers are postponing or reconsidering EV purchases.
3. Infrastructure Gaps in Rural Areas
Although urban charging infrastructure is improving, rural and semi-urban regions still lack widespread charging networks, slowing EV adoption outside metros.
4. Limited Long-Range EVs at Affordable Prices
Many EVs in India still have a range of 150–300 km, which may not be enough for intercity users, pushing them toward hybrids.
Category-Wise Market Outlook
Passenger Cars
- Growth is slowing slightly due to tax cuts on ICE/hybrids.
- Future demand will rely on longer-range and more affordable EVs being introduced.
Two-Wheelers
- Expected to continue strong double-digit growth, driven by urban demand and fleet buyers.
- Remains the largest contributor to EV penetration in India.
Three-Wheelers
- Adoption will rise steadily as last-mile delivery and ride-hailing operators prefer EVs for cost efficiency.
Future Outlook for FY2026
Despite a few headwinds, India’s EV market is poised for another record year:
- If the current momentum holds, FY2026 EV sales could exceed 20 lakh units, surpassing FY2025’s 19.7 lakh tally.
- Government incentives, state subsidies, and private investment in charging infrastructure will remain crucial.
- Automakers will likely introduce new affordable EV models to maintain growth amid tighter competition from hybrids.
The second half of FY2026 will therefore be critical in determining whether India crosses the 20 lakh milestone once again.
FAQs
Q1: How many EVs were sold in India in H1 FY2026?
Over 11 lakh EVs were sold between April and September 2025.
Q2: How does this compare to last year?
EV sales grew by 22.9% year-on-year, from 8.95 lakh units in H1 FY2025.
Q3: Why are EV car sales slowing down?
Due to GST revisions, the price gap between EVs and ICE/hybrid cars has narrowed, making EVs slightly less attractive for some buyers.
Q4: Which EV segment is the strongest in India?
Two-wheelers dominate sales, with over 1 lakh units sold per month.
Q5: What is the EV sales forecast for FY2026?
India is expected to surpass 20 lakh EV sales, exceeding the previous year’s tally.
Conclusion
India’s EV market continues its robust growth trajectory, with over 11 lakh units sold in the first half of FY2026, up nearly 23% from last year. While the car segment is showing early signs of a slowdown due to reduced GST differences, two-wheelers and three-wheelers remain resilient, ensuring overall market expansion.With EV adoption spreading beyond metros, infrastructure improving, and automakers preparing a wider lineup of affordable models, the country remains on track to cross the 20 lakh sales milestone once again this financial year.
