Electric Car Sales Hit The High Gear: What's Making EVs So Popular In India?

India’s electric vehicle market is entering a new phase of acceleration, with industry reports projecting over 1.38 lakh electric passenger vehicles to be sold in 2025. That’s nearly double the figure seen in 2023, signalling a clear shift in buyer interest, regulatory support, and automaker readiness. This upward trend is powered by affordable models, better infrastructure, and growing awareness of long-term savings, but challenges around scale, supply chains, and policy still remain.

The EV segment accounted for just 2 percent of all passenger vehicle sales in 2023. But in 2024, that figure moved closer to 3.5 percent, and is expected to approach 5 percent by the end of 2025. While still far from EV penetration levels in China or Europe, the momentum has clearly picked up. Tata Motors alone has sold over 19,000 electric cars in just the first three months of FY2025, holding more than 70 percent of the EV market by volume.

That dominance isn’t accidental. Tata’s aggressive pricing of the Tiago EV and Tigor EV, along with the popularity of the Nexon EV, has made electric cars accessible in both urban and semi-urban areas. Meanwhile, Mahindra has begun scaling up its XUV400 production, and companies like MG and BYD continue to build a presence in the premium electric SUV space. Hyundai, though late to the mass EV game, plans to localise its E-GMP platform in the coming year.

What Will Drive Growth In 2025?

New model launches will play a key role in fuelling growth. Tata’s upcoming Sierra.EV, the just-launched Harrier.EV, Mahindra’s XEV 7e and XUV 3XO Electric, the Kia Clavis EV and Maruti’s first EV in 2025 will offer buyers more choice across different price brackets. Industry observers believe the ₹10–₹20 lakh range is where the real battle will play out. That bracket appeals to family car buyers looking to shift from petrol or diesel without sacrificing space or comfort.

Charging infrastructure is also expanding, albeit unevenly. Public sector companies like NTPC and Indian Oil have set up charging points in major cities and highways, while startups like ChargeZone and Statiq are creating private fast-charging hubs. Still, the availability of chargers in residential areas and small towns remains limited, slowing down EV adoption beyond city limits.

One of the key barriers is cost. Despite falling battery prices globally, the upfront cost of EVs remains higher than petrol equivalents. Government subsidies through schemes like FAME-II and state-level rebates have helped narrow the gap, but in many cases EVs still demand a premium of ₹1–2 lakh. Manufacturers argue that economies of scale will bring prices down as volumes grow.

Buyers becoming more confident about EVs

Buyers are also becoming more confident in EV technology. Early fears about battery fires, range limitations, and resale value are being addressed through longer warranties, better quality control, and more transparent service packages. The entry of leasing and subscription models is also helping reduce the risk for first-time adopters.

Used EVs are becoming a growing niche too. Platforms have begun offering certified pre-owned EVs with battery health checks and service histories. This may become an important secondary market for cost-conscious buyers who want to switch without spending ₹10 lakh or more upfront.

However, the road ahead isn’t without potholes. Supply chain disruptions, especially for lithium-ion cells and power electronics, have caused delays in EV production for some brands. India still depends heavily on imports for EV components, making it vulnerable to global price swings and geopolitical tensions.

The government is pushing localisation, but cell manufacturing and recycling ecosystems are still in early stages. The PLI (Production Linked Incentive) scheme for battery manufacturing has seen several big-ticket applications, but actual plant output is still a year or two away from meeting domestic demand.

2025 promises to be a big year

Still, the trend is unmistakable. EVs are moving from niche to mainstream faster than many expected. As product options expand and buyers look for low-running cost alternatives, the EV share in passenger vehicle sales is likely to reach 7–10 percent by the end of this decade. That might not sound like much, but in a market of 4 million annual car sales, that’s close to 4 lakh electric cars a year.

In short, 2025 could be a defining year for electric cars. While the shift won’t be overnight, it is clearly underway, with Tata leading the charge, Mahindra catching up, and global brands watching closely.