India’s electric vehicle (EV) market has witnessed remarkable growth in the first half of the 2025-26 financial year (April to September 2025), with sales surpassing 10 lakh units, according to data from the Vahan portal. This milestone signals a robust upward trend in EV adoption, with projections suggesting the country could achieve or even exceed 20 lakh EV sales by the end of FY2026, matching or surpassing the 19.7 lakh units recorded in FY2025.

Strong Growth Across EV Categories

From April to September 2025, a total of 11 lakh electric vehicles were sold across various segments, reflecting a significant 22.9% increase compared to the 8.95 lakh units sold in the same period of FY2025. This growth of 2.05 lakh units underscores the rising popularity of EVs, driven by increasing consumer awareness, government incentives, and improving infrastructure. If this momentum persists, FY2026 could set a new benchmark for EV sales in India.

Also Read – Top 5 Two-Wheeler Offers This Festive Season with GST 2.0 Price Slashes

GST Changes Impact EV Car Sales

Recent adjustments to the Goods and Services Tax (GST) rates have introduced challenges for the EV sector, particularly in the passenger car segment. While EVs continue to enjoy the lowest GST rate of 5%, internal combustion engine (ICE) and hybrid vehicles have seen their GST rates slashed to as low as 18%. This narrowing tax differential—from a previous 23% to just 13%—has made ICE and hybrid vehicles more price-competitive, influencing consumer preferences in the price-sensitive car market.

The impact was evident in September 2025, where EV car sales dropped by 17.4%, from 18,290 units in August to 15,100 units. Industry experts note that this decline has reduced EV penetration in the car segment from nearly 5% to around 4%. According to automotive analyst Puneet Gupta, the reduced tax advantage has tilted the scales in favor of ICE and hybrid models, particularly for cost-conscious buyers. Poonam Upadyay, a market research director, emphasized that price sensitivity remains a key factor in this segment.

Two-Wheelers and Three-Wheelers Show Resilience

In contrast, the electric two-wheeler and three-wheeler segments have remained largely unaffected by the GST changes. In September 2025, electric two-wheeler sales reached 1.04 lakh units, only marginally lower than the 1.05 lakh units sold in August, a dip of less than 1%. Similarly, electric three-wheelers recorded sales of 61,000 units in September, down by 2,500 units from August’s 63,500 units. These minor declines suggest that demand for electric two- and three-wheelers remains strong, driven by their affordability, fuel savings, and widespread use in urban and commercial applications.

Also Read – Renault Kwid Electric Hatchback Spotted Testing in India: A Fresh Look Inside and Out

Outlook for FY2026

Despite the challenges posed by GST revisions, the overall EV market in India remains on a strong growth trajectory. The first half of FY2026 has demonstrated the sector’s resilience, with sales figures reflecting robust consumer interest and market potential. While the passenger car segment faces headwinds due to increased competition from ICE and hybrid vehicles, the two-wheeler and three-wheeler segments continue to drive EV adoption. With supportive policies, expanding charging infrastructure, and technological advancements, India’s EV market is poised for a record-breaking year, potentially surpassing the 20-lakh-unit mark by March 2026.