According to VAHAN portal data, India’s electric vehicle (EV) market witnessed strong growth in FY 2025-26, which got a significant push towards the end of the year along with strong demand in both electric two-wheelers (e2W) and electric four-wheelers (e4W).
Registrations of electric four-wheelers almost doubled, up 91.3 per cent year-on-year, to 1,93,633 units in FY2026, compared to 1,01,205 units in FY2025. The segment has seen steady growth over the past three years, registering 80,495 units in FY24. Meanwhile, electric two-wheelers recorded a healthy growth of 21.8 per cent, reaching 1.40 million units in FY2026, up from 1.15 million units in FY2025 and 9,48,586 units in FY24.
The pace of growth accelerated in the last quarter of the financial year. Between February and March 2026, sales of electric four-wheelers grew by 53.2 percent month-on-month, reaching 21,716 units from 14,177 units. Electric two-wheelers also registered a strong surge, growing 70.1 per cent from 1,08,357 units in February to 1,84,300 units in March. A strong base had already been established with sales of 18,875 e4W and 1,19,195 e2W in January, indicating sustained demand throughout the quarter before a sharp uptick in March.
Industry experts attribute the surge in FY26 to several structural factors. The expansion of charging infrastructure, increasing availability of feature-rich models across all price segments and improved supply chains enabling faster deliveries played a significant role. Additionally, better financing options, falling battery costs, and increasing localization efforts helped make EVs more affordable. Year-end dispatches and dealer-level incentives in Q4 supported higher volumes.
This increase coincides with growing global uncertainties, particularly tensions in West Asia, which contributed to price volatility and encouraged consumers to seek electric mobility options.
According to Anurag Singh, Managing Director, Primus Partners, the electric two-wheeler market is entering a more mature phase. He said that despite the gradual reduction in subsidies, e2W market share reached about 9 per cent in FY26, from about 6.3 per cent in FY25. He also highlighted the improved production capacity and better engineered models entering the market.
Rajat Mahajan, partner, Deloitte India, said the EV sector gained strong momentum in FY2026 due to rising demand for feature-rich vehicles, improving infrastructure and consistent product launches by original equipment manufacturers. Disruptions in fossil fuel supplies also encouraged customers to move toward electric vehicles, he said.
Policy support also played an important role in sustaining growth. These include continued low GST rates for EVs, improved financing access and extension of the PM e‑Drive scheme for electric two-wheelers till July 31, 2026.
Looking to the future, experts expect the penetration of EVs to continue to grow alongside petrol-powered vehicles. However, fluctuations in crude oil prices can affect demand patterns, as higher oil prices strengthen the case for electrification but can also increase logistics and input costs in the supply chain.
As FY27 begins, industry stakeholders remain optimistic, although the pace of demand growth will depend on fuel prices, policy continuity, infrastructure expansion and new product launches.