India's electric vehicle (EV) market is at a critical juncture, with registrations soaring to 2.55 million units in FY26, marking a 25% increase year-on-year. Yet, despite this growth, the sector remains in its infancy, with electric cars accounting for only 8.6% of total vehicle registrations. The disparity between consumer intent—where nearly 10% of respondents express interest in purchasing an EV—and actual sales, which reflect a mere 3.4% penetration, underscores a significant hurdle for the industry.
Global players like Tesla and local giants such as Tata Motors are ramping up their offerings, yet the market's evolution is hampered by infrastructure deficiencies, particularly in charging stations outside metropolitan areas. As Tapan Ghosh, CEO of VinFast India, points out, the success of EV adoption hinges not only on vehicle technology but also on building a robust ecosystem that includes trust, after-sales support, and charging accessibility.
The Indian government has introduced various incentives to bolster the EV sector, including reduced GST rates and production-linked incentives. However, the reliance on imported battery components remains a critical vulnerability, with a pressing need for local manufacturing capabilities. The recent entry of Tesla into the premium segment has injected fresh momentum, but the broader market's growth will depend on addressing the structural challenges that inhibit consumer confidence and purchasing decisions.
