India EV Sales Seen Topping 200,000 in FY26 as PV Market Nears 4.6 Million Units

India’s electric car (EV) market is expected to cross 200,000 units in FY26, with penetration holding steady at around 4–5 percent of total car sales, as adoption in higher-priced segments remains strong and the industry seeks to unlock demand in the mass-market sub-₹12 lakh category, said Shailesh Chandra, managing director of India’s largest-selling EV maker.

Chandra said the first half of the year has seen steady but measured growth, reflecting a phase of consolidation after several years of rapid expansion, even as EVs become an increasingly accepted alternative to internal combustion engine vehicles in mid and premium segments.

“This year we are crossing 2 lakh units in electric vehicles. It is not a small number,” Chandra said at a media roundtable.

India’s overall passenger vehicle (PV) market is likely to cross the 4.5–4.6 million unit mark in FY26, he said, implying annual EV volumes of roughly 180,000–230,000 units at a 4–5 percent penetration rate.

EV adoption in India remains uneven across price bands. Cars priced above ₹12 lakh, which account for about 1.6 million units annually, already see EV penetration of around 10 percent, translating into roughly 160,000 units a year. In contrast, the sub-₹12 lakh segment, representing about 3 million units or nearly two-thirds of the passenger vehicle market, records EV penetration of only about 1.6 percent, or around 50,000 units annually.

“This is the real challenge of mainstreaming electric vehicles in the country. If this segment does not get electrified, then you will never achieve the objective of EV mainstreaming,” Chandra said.

Based on the expected market size, EV volumes in FY26 would imply 20–30 percent year-on-year growth, considering industry sales of around 150,000–160,000 units in FY25.

The next leg of growth will depend largely on whether automakers can address three key barriers in the entry segment – real-world driving range, charging speed, and customer concerns over battery life, Chandra said.

“If mainstreaming of electric vehicles starts in this 65 percent segment and even if this reaches 10 percent, then you have jumped from 4 percent to 10 percent for the country. Above 10 percent, it becomes a serious game,” he added.

Charging infrastructure expansion is expected to support that transition. India now has around 30,000 public charging points, up from about 500 in 2020, alongside more than 200,000 home chargers installed nationwide, according to Chandra.

While EV margins remain under pressure, Chandra said Tata Motors is not far from parity with its passenger vehicle internal combustion engine business and is willing to sacrifice some margin in the near term to support long-term electrification.

The entry of all major carmakers into the EV space is also a positive signal, he said, as wider competition will help expand the overall market rather than slow it.

“The entry of bigger players into this space is going to be beneficial to the overall mission of electrification of the country,” Chandra said.

With inputs from Ketan Thakkar