India Automotive Market - Electric Passenger Vehicle Registrations Rise 80% as Annual EV Sales Could Reach 10 Million by 2030

Automotive production in India reached 34.71 million vehicles in FY'26 across passenger vehicles (PV), commercial vehicles (CV), three-wheelers (3W), two-wheelers (2W) and quadricycles. The country is the world's largest two-wheeler and three-wheeler market and ranks among the top three globally for passenger and commercial vehicles. Cumulative equity foreign direct investment (FDI) inflows into the sector reached INR 2,64,456 crore (approximately USD 39.7 billion) between April 2000 and December 2025.

Electric passenger vehicle registrations increased by more than 80% in FY'26, and Makreo Research estimates that annual electric vehicle (EV) sales in India could reach approximately 10 million units by 2030. Electrification is progressing at a different pace in each segment. Electric two-wheelers and three-wheelers account for more than 90% of India's EV sales and have the highest penetration. Passenger vehicle electrification is growing from a smaller base, while commercial vehicle electrification is led by state transport undertaking tenders rather than retail demand.

Competition is also extending beyond vehicle sales to manufacturing capacity, localisation, battery supply, software, charging, financing and supplier networks. Battery manufacturing capacity built for EVs is increasingly being directed towards the Battery Energy Storage System (BESS) market, as manufacturers look to serve mobility and stationary storage from the same production base. This analysis sets out where opportunities are emerging across the four main vehicle segments and the related battery, technology and infrastructure value chain.

India Automotive Market - Key Metrics and Latest Market Indicators

India's Electric Two-Wheeler Sales Cross 200,000 a Month

Electric two-wheelers remain the largest contributor to India's EV volumes. Retail data for July 2026 shows total monthly EV retail sales of 327,901 units, the highest on record and up more than 66% year on year. Within this, electric two-wheelers crossed the 200,000-unit mark for the first time, rising 88.3% to 204,362 units.

Segment EV penetration rose to 11.2% from 7.7% a year earlier, while EV penetration across all vehicle categories reached 12.7%. Together, two-wheelers and three-wheelers account for more than 90% of total EV sales, supported by affordability, suitability for urban transport, expanding charging infrastructure and wider model availability.

Established manufacturers have strengthened their position in the segment:

• TVS Motor Company retained the top position with 55,499 units in July 2026.

• Bajaj Auto followed with 45,613 units, ahead of Ather Energy at 30,357 units.

• Hero MotoCorp retailed 22,900 units.

• Ola Electric recorded 14,106 units, a year-on-year decline of 23.54%, as competition increased from manufacturers with established dealer and after-sales networks.

Ather Energy reported FY'26 sales of approximately 262,942 units, up nearly 69%, for a market share of around 18.6%, and has moved into the mass-market price band with its Rizta and Konarc models. Hero MotoCorp, Ather's largest shareholder at 29.48% on a fully diluted basis as of June 2026, approved a further investment of up to INR 1,000 crore on 14 July 2026, extending a relationship that spans equity, technology and charging infrastructure.

Electric Three-Wheelers - India's Highest EV Penetration at 65%

Three-wheelers have the highest EV penetration of any vehicle segment in India. Electric passenger three-wheeler penetration rose from 12.6% in FY'24 to 33.7% in FY'26. In July 2026, electric three-wheeler retail sales reached 87,055 units, up 25.3% year on year, with segment EV penetration at 65.1%. Across much of the category, electric models now outsell conventional ones. Mahindra Group led retail sales with 14,191 units, followed by Bajaj Auto at 13,442 units.

Adoption in this segment is driven mainly by commercial economics. Fleet operators in last-mile delivery, e-commerce logistics and passenger auto-rickshaw services buy on total cost of ownership and vehicle uptime. As a result, utilisation, running costs and charging downtime weigh more heavily in purchase decisions than vehicle specification. The continued expansion of electric auto-rickshaws has supported fleet modernisation, while additional permits for internal combustion engine (ICE) three-wheelers issued by several state governments have also supported overall segment demand.

Battery Swapping - The Infrastructure Layer Powering 2W/3W Adoption

Battery-swapping networks continued to expand in 2026:

• Battery Smart, described as India's largest battery-swapping network, operates more than 1,600 partner-led stations across over 70 cities and serves more than 100,000 active drivers. In July 2026, it secured an approximately USD 13 million debt facility from responsAbility Investments AG, its fourth financing agreement with the investor, taking responsAbility's cumulative commitment to the company beyond USD 50 million.

• SUN Mobility and IndianOil plan to build a battery-swapping network of more than 10,000 stations across 40 cities within three years. The network will build on SUN Mobility's existing footprint of over 630 stations and 50,000 smart batteries, integrated with IndianOil's network of more than 37,000 fuel stations.

Passenger Vehicles - SUV Premiumisation Meets Accelerating EV Adoption

India's passenger vehicle sales reached 4.64 million units in FY'26, up 7.9% year on year. Utility vehicles, including SUVs and crossovers, accounted for approximately 65% of sales in FY'25.

In the first half of calendar 2026, the passenger vehicle market grew 18.4% to 2.59 million units, with SUVs holding a 57% share. Over the same period, compressed natural gas (CNG) vehicle volumes rose 40% and battery-electric vehicle (BEV) sales rose 65%. Maruti Suzuki led with a 40% market share, followed by Tata Motors at 15% and Mahindra & Mahindra at 14%, both supported by their SUV portfolios.

Electric passenger vehicle sales are growing from a smaller base. In July 2026, electric PV retail sales reached 32,928 units, up 83.1% year on year, taking segment share to nearly 8% from 5% a year earlier. Tata Motors Passenger Vehicles led with 13,678 units, followed by Mahindra & Mahindra at 7,742 units and JSW MG Motor India at 5,689 units. Adoption is also extending beyond the metros. Delhi recorded the highest penetration among major states, while Madhya Pradesh and Bihar were among the fastest-growing markets.

Electric SUVs are becoming a key product category because they bring together rising EV acceptance and the preference for utility vehicles. Developing them requires capability in battery capacity, efficient powertrains, thermal management, software, electronics and charging.

Electric SUV Product Pipeline

• Tata Motors is launching three electric SUVs in succession - the Harrier EV, Sierra EV and premium Avinya. The Sierra EV sits between the Curvv EV and the Harrier EV, with 65kWh and 75kWh Harrier-sourced battery options.

• Mahindra & Mahindra has confirmed its fourth Born Electric SUV, the BE.07, for 2027. It will sit between the BE 6 and XEV 9e, with battery options up to 79kWh and a certified range target above 600km. The announcement follows the inauguration of its dedicated EV manufacturing and battery-assembly facility at Chakan.

• Maruti Suzuki plans seven SUVs over five years, alongside an INR 35,000 crore investment in its Kharkhoda complex, announced at the India-Japan Joint Economic Forum in July 2026. The site, which currently produces the Brezza and Victoris, can scale towards one million vehicles a year.

• Renault has placed India at the centre of its global strategy. It is reintroducing the Duster with a hybrid variant on a localised platform and has outlined a seven-model roadmap to 2030 spanning petrol, hybrid, CNG, ethanol and eventual EV powertrains on two new modular platforms.

Capital Commitments - How Much OEMs Are Backing SUV and EV Capacity

Powertrain Mix - India's Multi-Technology Transition

India is not moving from internal combustion to electric at a uniform pace. Each vehicle type is changing according to its own cost structure, use case and regulatory environment:

• Two-wheelers and three-wheelers have reached meaningful EV penetration. Their short trip lengths and high sensitivity to running costs make the total-cost-of-ownership case for electric strongest in these segments.

• Passenger vehicles are electrifying from a smaller base. BEVs, hybrids, plug-in hybrids, range-extended EVs, CNG, petrol and diesel are developing in parallel, partly reflecting limited charging infrastructure outside the metros.

• Commercial vehicles remain led by policy-backed public tenders.

For automakers, the decision is increasingly about which combination of technologies to offer, rather than when to replace one with another. For suppliers, this widens the addressable market across batteries, engines, transmissions, electronics, charging and software.

Draft regulation reflects this approach. The Ministry of Power's draft Corporate Average Fuel Efficiency (CAFE-III) norms were released for consultation in July 2026 and are proposed to take effect from 1 April 2027. The draft introduces a technology-neutral framework that grants compliance credit to EVs, hybrids, flex-fuel and CNG vehicles, alongside progressively tighter fleet-average targets through FY'32.

EV Batteries and Grid Storage - India's Battery Manufacturing Base Expands Into BESS

Battery cost and localisation remain key factors in EV economics across every vehicle type. In October 2021, the Ministry of Heavy Industries launched the Advanced Chemistry Cell (ACC) Production Linked Incentive scheme with an outlay of INR 18,100 crore. The scheme targets 50 GWh of domestic battery manufacturing capacity and offers incentives of 18–20% on net ACC battery sales above base-year production. Approved beneficiaries include Ola Electric, Amara Raja, Reliance New Energy and Exide Industries.

In 2026, battery manufacturers are increasingly serving a second demand pool - stationary Battery Energy Storage Systems (BESS). Companies including Tata Power Renewable Energy, Amara Raja Energy & Mobility, Exide Industries and JSW Energy are positioning lithium-ion cell and pack capacity for both EVs and grid-scale or commercial-and-industrial storage. In several cases, they are using the same lithium iron phosphate (LFP) chemistry lines.

• Amara Raja supplies EV and industrial customers, including Ashok Leyland, Hyundai and Tata. It is also investing in a BESS-focused giga-corridor in Telangana.

• Exide's lithium-ion cell gigafactory in Bengaluru is entering its second phase, with output planned for both EV and grid-scale storage markets.

Demand from the power sector is also supporting this shift. The Central Electricity Authority's National Electricity Plan projects a requirement of 208 GWh of BESS by 2030 to support renewable energy integration. The Union Power Minister reiterated the importance of energy storage to grid planning at India Energy Storage Week 2026 in July.

India Automotive Deals and Partnerships in Q2 2026

India's automotive sector recorded 20 mergers and acquisitions (M&A) and private equity and venture capital (PE/VC) transactions worth USD 717 million in Q2 2026. This was the lowest quarterly deal volume in three years, while deal value fell only 4% quarter on quarter. Excluding public-market fundraises, 18 transactions worth USD 479 million were recorded, mainly in technology-led mobility platforms and EV ecosystem businesses.

KPIT Technologies' USD 120 million acquisition of Israel-based Cymotive Technologies was the largest M&A deal, reflecting growing interest in automotive cybersecurity and software-defined vehicles. Rapido's USD 240 million fundraise was the quarter's largest transaction overall.

Partnerships are an important way for companies to combine manufacturing scale, technology, platforms and market access:

• Manufacturing partnerships can speed up local production.

• Technology partnerships can shorten EV, software and electronics development cycles.

• Platform sharing can improve scale economics.

• Battery partnerships can support localisation and supply security.

JSW Group and Skoda Auto Volkswagen India - Proposed Joint Venture

One of the most notable automotive developments of 2026 is the proposed partnership between JSW Group and Skoda Auto Volkswagen India:

• July 2026 - Reports indicated that JSW Group was in advanced talks to acquire a majority stake in Volkswagen's Indian business.

• Early August - Discussions reportedly moved to a proposed 51:49 structure, with JSW holding the controlling stake.

• 9 September 2026 - The two parties signed a non-binding memorandum of understanding (MoU) to formally explore the partnership.

According to Skoda Auto Volkswagen India, the structure is based on joint control, with clearly defined roles and mechanisms for quick decision-making. Localisation and platform synergies are intended to support competitive products, greater scale and improved profitability.

The deal would be JSW Group's third automotive venture in India. It would sit alongside JSW's 35% stake in JSW MG Motor India, where SAIC Motor holds 49%, and its wholly owned JSW Motors new-energy vehicle business, which is building a greenfield EV plant in Chhatrapati Sambhaji Nagar, Maharashtra.

Industry reports indicate that the venture could help fund an India Main Platform, reportedly based on Volkswagen Group's China Main Platform, to support several locally manufactured electric SUVs for the Volkswagen and Skoda brands. The joint venture could be formalised by late 2026 or early 2027.

JSW Motors and Tata Elxsi - Connected Vehicle Engineering Hub

On 24 April 2026, JSW Motors and Tata Elxsi signed an MoU to set up JNEXT (JSW NextGen Technology Center) in Pune. JNEXT will be an engineering hub for connected, software-defined platforms across JSW Motors' electric, hybrid and plug-in hybrid programmes.

Tata Elxsi will lead end-to-end development of the connected vehicle platform and a unified customer experience application. The scope covers UX design, cloud platforms, over-the-air update frameworks, digital twins, cybersecurity, AI/ML analytics and 5G-enabled features. The partnership points to greater use of Indian engineering-services capability within domestic new-energy vehicle programmes.

Fleet Infrastructure Partnerships

Partnerships such as SUN Mobility and IndianOil, together with Battery Smart's debt financing, show two- and three-wheeler fleet infrastructure attracting investment from energy companies, NBFCs and international development-finance investors alongside traditional automotive capital.

ADAS and Software-Defined Vehicles - Safety Drives Technology Adoption

Penetration of advanced driver-assistance systems (ADAS) in India's passenger vehicle market rose to 8.3% in H1 2025 from 6.2% in H1 2024, an increase of about 34% year on year. Safety is also becoming a more important purchase consideration. India recorded 180,000 road fatalities in 2025, the highest on record, which has increased attention on airbags, ADAS and advanced crash protection.

Alongside OEM investment in connected-vehicle platforms such as JNEXT, this suggests that software and safety technology are becoming points of differentiation across both electric and conventional powertrains.

Where India's EV Automotive Opportunity Lies

The opportunity in India's EV market differs by vehicle type, value-chain layer and geography.

• Two- and three-wheelers account for the largest EV volumes. Competition among established vehicle manufacturers is already strong, so much of the opportunity lies in component supply, financing and battery swapping.

• Passenger vehicles offer opportunities in premium products and technology partnerships, as SUV demand, EV adoption and software-defined platforms come together in OEM plans backed by tens of thousands of crores in committed investment.

• Commercial vehicles offer a narrower opportunity, centred on companies able to win and deliver long-term public bus tenders.

• Battery manufacturing spans both mobility and stationary storage, which is influencing how companies plan capacity expansion.

Auto components add an export dimension. India accounts for around 3% of global traded auto components, despite being the world's fourth-largest vehicle producer. Vision 2030 targets USD 60 billion in component exports and USD 145 billion in production, with an ambition to raise India's share of global component trade to 8%. Government incentives and global supply-chain diversification support this target. For EV-specific components, including electric motors, power electronics, battery-management systems, thermal management and charging or swapping equipment, export demand adds to the domestic capacity already being built.

Geography is also becoming more important. Delhi, Maharashtra, Karnataka, Tamil Nadu and Telangana remain the largest established EV markets. Madhya Pradesh, Bihar, Odisha and other Tier-2/3 states are recording some of the fastest growth in the two-wheeler and passenger vehicle segments. Assessing these markets requires more than registration data. Relevant factors include:

• affordability and financing availability

• charging density

• dealer and service coverage

• fleet intensity

• SUV preference

• state-level incentives

• model availability across price bands

These factors help distinguish markets led by private demand from those led by fleet economics. They also indicate where dealership networks, financing products and after-sales services may expand next.

For decision-makers, the main conclusion is that India's EV transition is not a single market. Identifying the right segment, geography, technology and partnership model will be central to investment and expansion decisions.

How Makreo Research Helps You Move from Signal to Strategy

Identifying where demand, competitive advantage and partnership potential are concentrated across four vehicle types, multiple powertrains and an evolving battery value chain requires structured market intelligence rather than headline tracking.

Makreo Research supports automotive OEMs, component manufacturers, battery and energy-storage companies, fleet operators, financiers and investors through:

• Market sizing and forecasting by vehicle type, powertrain, ownership model and distribution channel

• Segment-level demand analysis across 2W, 3W, PV and CV

• Competitive benchmarking and company profiling across OEMs and supplier ecosystems

• Consumer and demand assessment, including total cost of ownership, financing preference and adoption barriers

• Geographic opportunity assessment identifying where Tier-2/3 adoption is accelerating fastest

• Investment and expansion analysis, including EV-versus-BESS capacity allocation

• Partnership and JV opportunity assessment for manufacturing, technology or distribution tie-ups

• Primary research and market surveys to validate demand before capital commitment

Together, these capabilities help businesses evaluate demand pockets, competitive shifts, investment areas, partnership opportunities and geographic priorities without relying on a single market indicator.

Companies deciding where to allocate manufacturing capacity, which vehicle segment or geography to prioritise, or how a partnership or joint venture fits into India's automotive market can refer to Makreo Research's India Automotive Market and Forecast to 2032 report. It covers segmentation by vehicle type, powertrain, ownership and distribution channel across geographies.

For requirements beyond the reports, such as evaluating a specific investment or partnership decision, Makreo offers Consulting Services. For testing demand in a particular city, price band or fleet segment, it offers Market Surveys.

To discuss market entry, expansion strategy or competitive benchmarking in India's EV market, contact the Makreo team.