NITI Aayog Flags India’s Slower Pace of EV Adoption

India has a goal to achieve 30% electric vehicle (EV) penetration by 2030 as part of its vision to become a global hub for EVs. However, the government’s think tank NITI Aayog has flagged that the country currently lags behind global EV adoption rates and underscored the need for renewed strategies and policy interventions to accelerate progress toward the target.

"India's EV sales have recorded impressive growth from a modest 50,000 units in 2016 to about 2.18 million in 2024, which is about 20% CAGR growth. However, we also have to acknowledge the fact that the adoption of EVs in India is at a slower pace than not only China, but also the EU and the US. The global penetration is about 17% now, whereas we are at a little under 8%," said NITI Aayog Member Rajiv Gauba.

While India has seen robust adoption of electric vehicles in the two-wheeler and three-wheeler segments, the transition has been markedly slower in electric buses and passenger cars, with electric trucks experiencing minimal uptake. This is reflected in the financial year 2025 penetration figures - two-wheelers stood at 6.2% and three-wheelers surpassed 20%, but passenger vehicles were only at 2.7%, buses at 4.7%, and trucks remained below 1%.

“So while we have done well so far, we have to revisit our strategy and our approach. We need a new approach, a new intervention, or a major step-up, so that we can reach the 30% target by 2030, which we have set for ourselves,” Gauba said at an event that launched India Electric Mobility Index to track and benchmark the progress of states and union territories in achieving their electric mobility goals.

The think tank has identified a range of hurdles to electric vehicle adoption, from challenges in financing, particularly for electric buses and trucks, to inadequate charging infrastructure and underutilized existing public facilities. Furthermore, the report highlighted limited awareness about EV performance among both public and private stakeholders, alongside insufficient data and regulatory gaps, are hindering effective, evidence-based policy formulation.

In a report released on Monday, NITI Aayog outlined a multi-pronged strategy to accelerate EV, emphasizing a shift from subsidy-driven incentives to regulatory mandates and ecosystem-level reforms. One key recommendation is the gradual introduction of Zero Emission Vehicle (ZEV) mandates and disincentives the use or production of ICE vehicles within a year

The report also advocates for a geographic saturation kind of model, proposing the full electrification of public and freight transport in five selected cities within five years, followed by scaled expansion to more geographies. Additionally, it calls for enabling access to finance for small fleet owners through blended funds, battery and vehicle leasing models, and priority sector lending.