The report highlights the rapid progress of India’s EV ecosystem, with electric car sales rising nearly 21-fold—from just over 5,000 units in FY21 to more than 1.07 lakh units in FY25. While electric four-wheelers still account for a small share of total EV sales—dominated by two- and three-wheelers—the segment is entering a high-growth phase, fueled by public and private investments.
India aims for 30% EV penetration by FY30. To support this target, the government has implemented several initiatives, including FAME III, Production Linked Incentive (PLI) schemes for battery manufacturing, and customs duty exemptions on key battery materials such as cobalt, lithium-ion waste, and graphite. These efforts are expected to improve supply chain resilience and reduce vehicle production costs.
One of the major breakthroughs has been in EV charging infrastructure. According to CareEdge, the number of Public EV Charging Stations (EVPCS) in India grew nearly fivefold over three years—from 5,151 in 2022 to over 26,000 by early FY25—driven by central and state-level initiatives, including land subsidies and capital support. Despite this growth, the current charger-to-EV ratio stands at 1:235, significantly behind global benchmarks (1:7–15 in countries like China, South Korea, and the EU).
To close the infrastructure gap, innovative solutions such as battery swapping, mobile charging vans, community-shared chargers, and solar-powered kiosks are emerging, particularly targeting Tier-II and Tier-III cities. Private players, in partnership with municipalities and DISCOMs, are rapidly expanding their footprint. Additionally, efforts by NITI Aayog and the Bureau of Energy Efficiency (BEE) to standardize charging protocols and enable seamless digital payments aim to improve user convenience and reliability.
OEMs are also stepping in with bundled home-charging solutions, high-range EV models (up to 489 km), and fast-charging corridors to reduce “range anxiety.” These private investments signal a long-term commitment to India’s EV transition.
Battery cost remains a key concern, accounting for 35–45% of an EV’s total cost. Currently, India imports nearly all of its lithium-ion cells, primarily from China, South Korea, and Japan. However, with zero customs duty now levied on 16 key battery minerals and investments in domestic battery manufacturing, import dependency is expected to fall from 100% in FY22 to around 20% by FY27. This localisation push could slash battery costs by 20–25% over the next 3–5 years, enhancing EV affordability.
“India’s electric car sales penetration is likely to cross 7% by FY28, provided rare earth disruption is resolved in a timely manner. With a robust pipeline of model launches, expanding EV charging infrastructure, and battery localisation under the PLI scheme, India is well-positioned to accelerate EV adoption,” said Tanvi Shah, Senior Director & Head, CareEdge Advisory & Research.
One of the looming risks, however, is China’s recent move to restrict exports of seven rare earth elements critical for electric motor production. India currently sources over 90% of its REE imports from China, raising concerns of supply shocks and price volatility across EV, hybrid, and ICE segments. The government is now working to diversify sources, develop strategic reserves, and scale up local REE processing.
Despite upfront costs, electric cars are becoming increasingly competitive with internal combustion engine (ICE) vehicles. Over a five-year period, EVs offer substantial savings in fuel and maintenance, and benefit from tax rebates and registration fee waivers—making them a cost-effective and cleaner mobility option.