Mumbai, December 26, 2025: India’s electric vehicle (EV) industry marked a decisive turning point in 2025, recording its strongest year of growth yet as sales surged across segments, infrastructure expanded steadily, and manufacturers doubled down on local production — even as government subsidies were scaled back.
Industry estimates show that more than 1.1 million electric vehicles were sold during the year, underscoring sustained consumer demand and signaling that EV adoption in India is moving beyond early adopters into the mainstream. EVs now account for nearly 8% of overall vehicle sales, up from the previous year, putting the country on a firmer path toward its 2030 clean mobility targets.
Two- and Three-Wheelers Lead the Charge
The growth story in 2025 was once again driven by electric two-wheelers, which formed the largest share of EV sales. Affordable pricing, improving battery ranges, and strong adoption in urban and semi-urban markets helped sustain momentum.
Electric three-wheelers also posted strong numbers, particularly in last-mile delivery and passenger transport, supported by fleet operators and small businesses shifting to lower operating costs.
Meanwhile, the passenger electric car segment recorded its highest-ever annual sales, aided by new model launches, better financing options, and rising fuel prices. Although EV cars still form a small share of the overall passenger vehicle market, their growth rate outpaced that of conventional vehicles during the year.
Policy Support and Manufacturing Push
Government policy continued to play a crucial role in shaping the EV landscape. While direct purchase subsidies were reduced in parts of the year, support through production-linked incentive (PLI) schemes boosted domestic manufacturing and encouraged localisation of key components such as batteries and power electronics.
Several automakers announced fresh investments in EV manufacturing facilities, with India increasingly positioned as a potential export hub for electric two-wheelers and small cars. Established players expanded capacity, while new entrants — both domestic and global — intensified competition.
Charging Infrastructure Expands, Gaps Remain
India’s public charging network expanded significantly in 2025, with thousands of new charging points added across major cities and highways. However, charging availability and reliability remained uneven, particularly in smaller towns and rural areas.
Industry experts noted that infrastructure — rather than vehicle availability — could become the key constraint to EV growth in the coming years, calling for faster deployment of fast chargers and better grid readiness.
Challenges Persist
Despite record growth, challenges remain. Affordability concerns, uncertainty around battery life and resale value, and infrastructure gaps continue to influence buyer decisions. Analysts caution that sustaining high growth rates will require continued policy clarity, cost reductions, and consumer confidence.
States Take the Lead
State-level policies emerged as a key driver of EV growth in 2025, with several governments rolling out targeted incentives and infrastructure plans.
Delhi maintained its position as a leading EV market, supported by a dense public charging network, purchase incentives for two- and three-wheelers, and a push for battery-swapping infrastructure for commercial fleets.
Maharashtra expanded incentives under its EV policy, offering road tax and registration fee exemptions, toll waivers on select highways, and plans to install charging stations at regular intervals along major corridors.
Uttar Pradesh announced a ₹440-crore subsidy package to support EV buyers and manufacturers, helping the state emerge as one of the largest EV markets by volume, particularly for electric three-wheelers.
Karnataka strengthened its position as a charging infrastructure hub, focusing on public-private partnerships and technology-led deployment in Bengaluru and key highways.
Haryana moved to reinstate subsidies for electric vehicles below a specified price threshold, aiming to revive demand in the personal mobility segment.
Southern states such as Telangana and Andhra Pradesh continued to promote EV adoption through incentives for fleet operators and investments in commercial EV infrastructure.
Manufacturing and Policy Support
At the national level, production-linked incentive (PLI) schemes continued to support domestic manufacturing of EVs and components. Several automakers announced capacity expansions and fresh investments, reinforcing India’s ambitions to become an EV manufacturing and export hub.
Infrastructure Gaps Persist
While the number of public charging stations increased significantly in 2025, industry experts noted that uneven distribution and reliability issues remain key challenges, especially outside major urban centres.
India’s automotive sector is one of the most vital contributors to the economy. Currently the fourth-largest auto market globally, India is on track to secure the 3rd position by 2026.
Industry Speaks
Sanjeev Babbar, Director, JCBL Ltd.- The year 2025 has been a defining period for the Indian automotive sector, marked by rapid technological adoption and a strong shift toward safety, efficiency, and sustainability. OEMs have significantly accelerated investments in electric and alternative-fuel technologies, while the demand for connected features, telematics, and advanced driver-assistance systems has grown across both commercial and passenger segments. Key trends of Year include the expansion of EV production, development of new technologies like autonomous & connected vehicles and the growth of Mobility-as-a-Service (MaaS) models.
On the commercial vehicle side, rising fleet modernization, improving infrastructure, and growing mobility needs have driven demand for buses and logistics vehicles. Customers today expect higher reliability, better comfort, and smart features even in mass mobility solutions, and manufacturers are responding with innovations in body design, lightweight materials, and improved passenger safety systems.
As we move into 2026, we foresee the industry becoming even more customer-centric and technology-led. India’s automobile industry is poised for a promising future, driven by technological advancements, sustainability goals, and government support. Policies like the Production Linked Incentive (PLI) scheme and the PM E-Drive initiative aim to accelerate EV adoption and manufacturing localization. While challenges like high infrastructure & technology , Regulatory uncertainty remains, the growth potential is significant, especially in the EV and connected mobility segments.
Toyota Kirloskar Motor-Overall, 2025 has been a positive year for Toyota, marked by stronger customer acceptance across our products and services, with year-on-year growth of over 17% [Jan–Nov]. We are grateful to the Government for the GST reforms, which have improved overall market affordability and enhanced purchasing power, thereby contributing to the sustained growth of the automotive industry.
This growth was supported by strong demand across our portfolio, with MPVs and SUVs remaining key drivers, resonating with customers who value reliability, comfort and versatility. At the same time, we witnessed a clear rise in demand for greener mobility solutions, reflecting increasing acceptance of our electrified offerings within India’s evolving mobility landscape. In addition, rural markets continued to gain momentum, with their growing openness to newer technologies, helping set the agenda for the year ahead.
As we look ahead, our commitment to decarbonization remains steadfast through Toyota’s multipath way approach, offering a broad range of technologies tailored to diverse customer needs and real-world usage. Anchored in our customer-first philosophy and long-term commitment to India, we will collaborate closely with all stakeholders to deliver world-class mobility solutions, advancing our global vision of carbon neutrality and mass happiness for all.
Pratik Malkan, Chairman, Lusso Designs India- As the industry moves forward, vehicle transformation is increasingly being driven by advanced engineering integration, intelligent systems and manufacturing-led innovation. Personalisation today has evolved from cosmetic differentiation to a core engineering principle, influencing vehicle architecture, material choices and feature integration across platforms.
At Lusso Designs, transformation is approached as a structured, end-to-end process. Our capabilities span AI-led design modelling, robotics-assisted production, advanced prototyping and lightweight composite engineering, supported by strong process control and craftsmanship. This allows OEMs and mobility partners to enhance existing platforms, accelerate development cycles and deliver differentiated products that command premium positioning while aligning with sustainability objectives.
With India’s HNI and UHNI base continuing to expand, demand for bespoke and premium mobility solutions is expected to remain strong. Supported by global OEM collaborations and a focused R&D roadmap across luxury platforms, lifestyle vehicles and sustainable design concepts, Lusso Designs is well-positioned to support the industry’s next phase of growth through scalable, design-led and engineering-driven transformation.
Outlook for 2026- Looking ahead, the EV industry is expected to maintain its upward trajectory in 2026, with charging infrastructure, intercity electric mobility, and commercial fleets seen as key growth drivers. If momentum continues, India could emerge as one of the world’s fastest-growing EV markets by the end of the decade. 2025, by most measures, marked the year electric mobility in India shifted from promise to scale — setting the stage for a more competitive and electrified automotive future.
