Tata Motors Passenger Vehicles Ltd expects electric passenger vehicles to account for 7.5-8 per cent of India’s car market by the end of financial year 2026-27, as new products, lower ownership barriers and higher fuel costs draw more mainstream buyers towards electric cars.
Electric-car penetration rose from around 2.5 per cent in FY25 to 4.5 per cent in FY26 and is likely to remain between 6.5 per cent and 7 per cent in the first quarter of FY27, Tata Motors Passenger Vehicles Managing Director and Chief Executive Officer Shailesh Chandra said.
“As we exit this quarter, it will be closer to 7.5 per cent. You will see the year possibly exiting closer to 7.5-8 per cent,” Chandra said during a media interaction on Tuesday on the sidelines of the Sierra EV launch.
The executive expects electric-car penetration to cross 10 per cent in FY28 if the market exits FY27 at around 8 per cent. Chandra said the electric passenger vehicle market was moving beyond early adopters and enthusiasts as customers gained access to more models and became more confident about the long-term future of the technology.
Multiple product launches, improved range, lower acquisition costs and lifetime battery warranties have also helped address some of the barriers that had restricted EV demand, particularly in lower-priced segments.
Q1 registrations rise 89%
India’s electric passenger vehicle market nearly doubled in the first quarter of FY27.
Retail registrations rose 89.3 per cent to 82,737 units during April-June 2026, compared with 43,710 units in the corresponding period last year, according to Vahan data.
Monthly registrations increased through the quarter, rising from 24,963 units in April to 27,320 units in May and 30,454 units in June. The industry averaged about 27,600 electric-car registrations a month during the quarter, broadly in line with Chandra’s estimate of 27,000-28,000 units.
Tata Motors retained the lead with 32,283 registrations, more than double the 15,794 units recorded in the year-ago quarter. Its share of the electric passenger vehicle market stood at 39 per cent.
Mahindra & Mahindra was in second place with 20,112 registrations, almost twice its year-ago volume of 10,144 units. Its market share stood at 24.3 per cent. JSW MG Motor India registered 16,502 units, compared with 13,499 units in Q1 FY26, giving it a 19.9 per cent share.
The top three manufacturers—Tata Motors, Mahindra and JSW MG Motor—accounted for more than 83 per cent of electric passenger vehicle registrations in the quarter.
According to Chandra, concerns over fuel prices due to the West Asia crisis had made customers who were previously reluctant more open to considering an EV. He said higher fuel prices had helped shift the EV market from a “push mode” to a “pull mode”, adding to the impact of stronger products and the entry of more manufacturers.
The sharp Q1 growth followed a record performance in FY26. Electric passenger vehicle registrations rose 83.6 per cent to 1,99,923 units in FY26, from 1,08,873 units in FY25, according to data released by the Federation of Automobile Dealers Associations and reported by Autocar Professional.
The overall passenger vehicle industry recorded its highest-ever domestic wholesales of 46.43 lakh units in FY26, up 7.9 per cent from the previous year, according to the Society of Indian Automobile Manufacturers. SIAM said registrations of electric passenger vehicles increased by more than 80 per cent during the year and helped support overall industry growth.
EV demand running ahead of supply
Tata Motors is, however, unable to fully meet the increase in demand because of constraints across parts of its electric vehicle supply chain.
“In EVs, we are starkly seeing quite a wide gap between demand and supply,” Chandra said.
He said demand for the Harrier.ev was about twice the number of vehicles the company was supplying. Demand for the updated Punch.ev had increased six to seven times from its earlier level, while supply had risen by about 2.5 to three times.
Tata Motors has to allocate common components such as battery cells, battery packs and power electronics across its electric portfolio. This forces the company to balance supplies between entry-level models and premium EVs that offer better contribution margins.
Chandra said constraints at a few suppliers had also limited production. Some of the affected parts require long lead times because they involve developing new tooling and casting capacity.
The company is working on alternative suppliers, brownfield projects and the debottlenecking of its existing factories. It has capacity-enhancement plans spread across the next 12, 24 and 36 months as it moves towards an annual passenger vehicle capacity of 1.3 million units.
Tata Motors currently produces about 60,000-65,000 passenger vehicles a month and is seeking to first stabilise output at around 70,000 units. EVs are expected to account for a significant part of the increase, Chandra said.
Electric models already contribute around 18-20 per cent of Tata Motors’ passenger vehicle volumes and close to 25 per cent of its revenue, the executive said. The company is targeting an electric vehicle mix of more than 30 per cent by FY31. It expects India’s electric passenger vehicle market to reach about one million units by then.
The company plans to have a portfolio of 10 electric products by FY31. Apart from launching new models, it will upgrade existing vehicles to improve range, pricing, warranties and charging performance.
“The destination of a car, where it is more powerful than an ICE proposition, is when you get price parity, more than 400 km of real-life range and a lifetime warranty,” Chandra said.