India’s electric vehicle market is expanding quickly, but high upfront costs and uneven infrastructure continue to slow wider adoption despite strong policy support.
Electric vehicle sales rose about 25 percent year-on-year in FY26 to 24.5 lakh units, according to data from the Federation of Automobile Dealers Associations. The growth has been driven by new model launches, improving supply chains and rising acceptance in urban areas, The Economic Times reported.
Automakers say the shift is becoming more visible. Mahindra & Mahindra reported crossing 50,000 electric SUV deliveries within a year, with March 2026 marking its highest monthly sales.
However, electric vehicles still account for only 7.6 percent of total vehicle sales, well below the government’s target of 30 percent by 2030, as outlined in a report by NITI Aayog. This means the sector needs to grow much faster in the coming years.
Industry experts say the biggest challenge remains the high purchase cost. Electric cars often cost significantly more than petrol or diesel vehicles, creating a barrier for many buyers even though running costs are lower over time. For most consumers, the decision is driven by the upfront price rather than long-term savings.
Infrastructure is improving but remains uneven. More than 29,000 public charging stations have been installed across the country in recent years, including thousands of fast chargers. Still, availability varies widely, especially outside major cities, and concerns about charging access persist.
Efforts to expand infrastructure in smaller towns have seen limited response. In Karnataka, a plan by Bangalore Electricity Supply Company to set up charging stations across all districts has attracted interest in only a few areas, mainly urban centres, highlighting concerns over viability in regions with lower EV adoption.
Policy support has played a key role in driving growth. Government programmes offering incentives for buyers and manufacturers, along with reduced taxes, have encouraged adoption. However, frequent changes in policy and targets have also created some uncertainty for investors and companies.
Another major concern is dependence on imports for battery materials. India currently relies heavily on overseas supply chains for lithium and other key inputs, leaving the sector exposed to global disruptions.
Adoption patterns also vary across segments. Electric two- and three-wheelers have grown quickly due to lower costs and regular usage, while passenger vehicles are seeing gradual uptake. Electric trucks, however, remain limited.
Experts say that while the direction is clear, achieving large-scale adoption will require lower costs, better infrastructure, stronger supply chains and greater consumer confidence.
For now, buyers continue to weigh their options carefully, balancing price, efficiency and long-term benefits as India’s transition to electric mobility moves forward.
