Economic Survey 2026: India’s EV market surges at 63% CAGR over six years, registrations near 2 mn in FY25

Electric vehicles (Representative image)

• Scheme like PM E-Drive, PLIs scheme have given the EV segment a boost
• E-2Ws recorded registrations growth of 21 percent in FY25 to reach 1.15 million units
• PLI-Auto Scheme has attracted Rs 35,657 crore till September 2025

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India’s electric vehicle (EV) segment has witnessed rapid expansion over the past six years, recording a compounded annual growth rate (CAGR) of 63 percent, according to the Economic Survey 2025–26 tabled by finance minister Nirmala Sitharaman on January 29.

Total EV registrations in the country rose to 1.97 million units in FY25, up from 1.68 million units in FY24, reflecting a year-on-year growth of 16.9 percent. In FY20 the total EV registrations in the country stood at around 0.1-0.2 million.

Electric passenger vehicle registrations crossed the 100,000 mark for the first time in FY25, registering an 18 percent increase compared to the previous year.

Electric two-wheelers continued to dominate the segment, with registrations growing by 21 percent in FY25 to reach 1.15 million units, underlining their role as the primary driver of EV adoption in India.

The strong growth trajectory has been supported by multiple policy interventions launched by the Centre to promote electric mobility. One of the key initiatives is the Production-Linked Incentive (PLI) Scheme for the Automobile and Auto Components Industry, approved in September 2021 with an outlay of Rs 25,938 crore. The scheme, which incentivises high-value advanced automotive technology vehicles and components, has attracted cumulative investments worth Rs 35,657 crore till September 2025.

Another major pillar is the PLI scheme for the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, with an outlay of Rs 18,100 crore for 50 GWh capacity. Under the scheme, 40 GWh of capacity has already been awarded, helping localise battery manufacturing and strengthen the domestic EV ecosystem.

In September 2024, the government also launched the PM E-Drive scheme with an outlay of Rs 10,900 crore. The programme provides demand incentives for electric two-wheelers and three-wheelers, while extending support to new segments such as e-trucks and e-ambulances. It also includes funding for charging infrastructure and upgrades of vehicle testing agencies.

Further boosting public transport electrification, the Centre notified the PM e-Bus Sewa–Payment Security Mechanism (PSM) scheme in October 2024, with an estimated outlay of Rs 3,435.33 crore. The scheme aims to support the deployment of over 38,000 electric buses by providing payment security to operators and OEMs in case of defaults by public transport authorities.

The Society of Indian Automobile Manufacturers (SIAM) had previously said that government policy interventions, combined with a growing number of EV launches by manufacturers, have provided strong momentum for the adoption of electric vehicles across the country.