EV Market Share Crosses 4% in India Amid Surging Demand and Policy Push
New Delhi : The electric passenger vehicle (EV) segment in India continues its steady ascent, crossing the 4 per cent market share milestone in May 2025, up from 2.6 per cent in May last year, according to retail data released by the Federation of Automobile Dealers Associations (FADA). This marks a notable shift in Indian consumer sentiment towards greener mobility options.
The May figures also reflect a month-on-month rise from 3.5 per cent in April 2025, underscoring consistent growth. A total of 12,304 electric cars were sold in May, compared to 8,029 units during the same month last year. April 2025 had recorded 12,233 units sold.
FADA CEO Saharsh Damani hailed the figures as “an important milestone” in India’s electric mobility journey. “This growth has been driven by improvements in battery technology, better range, and lower costs compared to earlier electric PV models,” he said.
Market Leaders and Performance
Tata Motors retained its leadership in the electric car market by selling 4,351 units in May. It was closely followed by JSW MG Motor, which reported a 149 per cent year-on-year surge, delivering 3,765 units. Mahindra & Mahindra secured third place with 2,632 units sold. These top three players together accounted for over 87 per cent of the total electric car sales, FADA data showed.
Supply Chain Challenges Loom
While the growth trajectory is promising, FADA cautioned that external risks may impact the momentum. Rising geopolitical tensions and constraints around rare-earth material supply—especially from China, the global leader in rare-earth magnet exports—could disrupt the EV supply chain.
“If the supply situation for rare earth materials doesn’t improve, we could see production slowdowns that may impact retail sales in the near future,” Damani warned.
Government’s Investment Push
In a parallel move to strengthen India’s EV ecosystem, the central government this week notified new guidelines for a scheme designed to attract global manufacturers to invest in domestic EV production.
Under the scheme:
Approved applicants will be allowed to import completely built-up (CBU) electric four-wheelers with a minimum CIF value of $35,000 at a reduced customs duty of 15%, for five years from the date of approval.
Companies must make a minimum investment of ₹4,150 crore in the Indian market.
A cap of 8,000 imported units per year will apply, with unutilized quotas allowed to carry over.
This policy is seen as a strategic incentive to encourage firms like Tesla and other global players to enter and localize production in India.
