India’s electric vehicle segment is gearing up for its strongest festive season yet, fueled by several new launches and broader industry participation.
SIAM President Shailesh Chandra noted that while EV growth may appear slower month-on-month compared to ICE vehicles due to pent-up demand in the latter, overall momentum for EVs remains very strong, supported by multiple new launches and increased industry involvement.
Chandra also said the festive period for electric vehicles could be the “highest ever” for the passenger vehicle industry in terms of volumes.
Before the September 22 GST cut, small petrol and diesel cars were taxed at around 30%, and larger cars and SUVs at 43-55%, while EVs at just 5%, giving EVs a big tax edge of 25-50%. After the GST cut, the tax on small ICE cars dropped to 18%, and on larger ones to 30-35%, narrowing the gap. EVs still enjoy a clear 13-25% tax advantage, keeping them the more attractive, future-ready option.
Recently, Union Minister Nitin Gadkari said that within the next four to six months, the cost of electric vehicles is expected to match that of petrol vehicles.
Almost all major carmakers now have a battery electric vehicle in their lineup. Tata Motors leads the segment, followed by MG and Mahindra & Mahindra. Meanwhile, India’s largest carmaker, Maruti Suzuki, is preparing to export its e-Vitara to 100 countries, marking the start of its EV journey.
The government and automakers are working together to strengthen consumer confidence. Under the ₹10,900-crore PM E-DRIVE scheme, the government has allocated ₹2,000 crore to set up around 72,300 public EV charging stations across the country.
According to SIAM data, the July-September quarter of FY2025-26 saw passenger vehicle sales reach nearly 1.04 million units, a degrowth of 1.5%. Two-wheelers rose 7.4% to 5.56 million units, while three-wheelers posted record quarterly sales of 229,239 units. Commercial vehicles grew 8.3% to 239,781 units. Total vehicle exports reached 1.68 million units, up over 26% year-on-year.
Chandra added that the industry is on track to close the financial year 2025-26 on a positive growth trajectory, supported by good monsoon conditions, favourable macroeconomic trends and sustained consumer confidence. With EV momentum building and SUVs stabilizing, the passenger vehicle market appears balanced and healthy ahead of the festive season.
The broader auto market continues to benefit from pent-up demand, GST reforms and festive-season buying. Chandra said, “We will see growth coming sharply in October. Around 70% of customers were waiting for price cuts, and that demand is now being released. Festivity usually adds 35–40% higher sales over a normal month. New customers attracted by GST-driven affordability are yet to come in.”
SUV Growth, Hatchback Decline to Stabilize
Meanwhile, the SUV market is stabilizing. SUVs, which grew five to six years ago to more than half of total passenger vehicle sales, may have reached saturation. Chandra explained, “We are seeing SUVs grow from a 29% share five to six years ago to 56% now. Globally, it has stabilized. Generally, it stabilizes between 50% and 55%.”
Chandra added that hatchbacks and sedans, on the other hand, have declined from around 50% to 30%. “Hatches specifically have dropped from 46% to 22%. That trend may now be stabilizing as well,” he said.
This stabilization is linked to the completion of SUV launch cycles. “There were a lot of launch activities in SUVs, and those cycles have likely run their course. That is why we are seeing stabilization of volumes in these segments,” he said.
Chandra said he does not see any alarm bells regarding SUV growth. “The pent-up demand for SUVs is over, and the product cycle is now more stable. As a result, growth is largely following the trend of the overall industry,” he said.