Record March EV sales driven by demand momentum, not fuel concerns: Industry

EV buying decisions are being driven primarily by product availability, pricing and improving value proposition.

• Electric car sales rose in March, reaching 21,528 units
• Electric two-wheeler sales rose to 1,90,941 units in March
• New launches boosted India's EV market in FY26

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India's electric vehicle (EV) market ended FY26 on a high note, with electric car and two-wheeler sales hitting record monthly highs in March, driven by sustained demand momentum and new product launches, according to industry stakeholders.

FY26 EV retails

According to data sourced from the government's Vahan portal, electric car retails rose to 21,528 units in March, marking a 56.8% increase from 13,733 units in February. Electric two-wheeler sales jumped 70.9% to 1,90,941 units, compared with 1,11,709 units in the previous month.

The industry stakeholders told Moneycontrol that EV buying decisions are being driven primarily by product availability, pricing and improving value proposition, with the March spike reflecting a year-end acceleration in an already growing market rather than any immediate shift linked to concerns around fuel availability.

Electric car sales crossed the 15,000-unit mark in multiple months during the year, while electric two-wheelers maintained a consistent run rate of over 1,00,000 units for most months before accelerating sharply in the final quarter.

For FY26, electric car retails stood at 1,87,549 units, while electric two-wheeler sales reached 13,92,787 units. On a quarterly basis, January-March was the strongest period for both segments, with electric car sales at 53,731 units and electric two-wheelers at 4,25,462 units -- the highest quarterly contribution to annual volumes.

March alone contributed around 11.5% of annual electric car sales and nearly 13.7% of electric two-wheeler sales, reflecting a strong year-end push.

Company executives said rising enquiries and bookings throughout the year translated into higher conversions in the final quarter. They attributed the growth to expanding product choices, with a wider range of offerings now available across entry-level and premium segments, as well as increased participation from automakers.

According to Crisil Intelligence Senior Director and Senior Practice Leader Hemal Thakkar, policy support and the broader shift towards cleaner fuels are also aiding adoption.

"The government is pushing the industries to move from LPG to LNG or electricity as a source of energy and choose fuels which are cleaner in the current scenario, where the availability of gases is a challenge. This indicates that support for cleaner fuels, including EVs, would continue going forward. The recent extension in the period of subsidy of PM E-DRIVE for two-wheelers also underlines the same," Thakkar said.

The Ministry of Heavy Industries recently extended the subsidy eligibility deadline for electric two-wheelers under the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E‑DRIVE) scheme by four months to July 31, 2026.

"While the West Asia crisis is acting like a blessing in disguise for the EV industry, people are now aggressively wanting to look at options which are an alternative to petrol and diesel. Of course, this will take time to play out, but the customers are very educated these days on account of social media, and the momentum will possibly be sustained this time," Thakkar noted.

S&P Global Mobility Light Vehicle Production Forecasting Associate Director Gaurav Vangaal said new model launches have played a key role in expanding the market.

"India's electric car volumes have surged since March, driven by new launches such as Maruti Suzuki's e Vitara, Mahindra's XEV 9S, and Tata's Punch.ev -- models that were not available in March last year. With a robust pipeline of fresh EVs slated for release each year, penetration is expected to deepen further," Vangaal observed.

Vangaal said that any prolonged West Asia conflict and resulting crude oil price volatility could accelerate adoption, as consumers increasingly view EVs as a resilient hedge against fuel price shocks.