The share of battery electric vehicles (EVs) in India’s two-wheeler and passenger vehicle markets slowed in 2025 after the government reduced GST on petrol and diesel vehicles from October, even though overall EV sales continued to grow during the year.
The tax cut made petrol and diesel vehicles cheaper compared to electric models. This encouraged more buyers to choose internal combustion engine (ICE) vehicles, especially in the December quarter. As a result, EV market share fell in several segments. The three-wheeler segment was an exception, where the share of electric vehicles increased.
In the two-wheeler segment, the share of electric vehicles rose from 6% in 2024 to 8.1% between January and September 2025. However, after the GST cut, the December quarter saw a fall in EV share, bringing the full-year electric two-wheeler share down to 6.3%.
Passenger vehicles showed a similar pattern. The share of electric cars and SUVs, excluding hybrids, increased from 2.5% in 2024 to nearly 4% in 2025. The three-wheeler segment recorded stronger growth, with electric penetration, excluding e-rickshaws, rising from 12% to 18% during the year.
Despite weaker penetration in some segments, total EV sales went up. Registrations of battery-powered vehicles across all categories rose 16% year-on-year to 22.7 lakh units in 2025, compared to 19.5 lakh in 2024. Electric two-wheeler registrations increased 11% to 12.8 lakh units. Electric car and SUV registrations jumped 77% to 1.8 lakh units, driven by more models, expansion by existing companies and new players entering the market.
Electric three-wheeler sales rose 15% to 8 lakh units, with e-rickshaws making up nearly 70% of the total.
To boost demand after the GST cut, carmakers such as Mahindra & Mahindra, Tata Motors, Hyundai and Kia offered heavy year-end discounts on electric vehicles.
Meanwhile, the overall passenger vehicle market remained strong. Car sales grew about 6% in 2025 to a record 4.5 million units, supported by tax changes and lower repo rates, which increased people’s spending power. Around 4.05 to 4.07 lakh vehicles were sold in December, up about 26% from a year earlier, marking the third straight month of double-digit growth after the GST reduction came into force in September 2025.
