Battery electric vehicle penetration in India’s two-wheeler and passenger vehicle segments lost momentum in 2025 after the reduction in GST rates for petrol- and diesel-powered vehicles from Oct, even as EV volumes saw healthy growth for the year.
The narrowed price gap between internal combustion engine (ICE) vehicles and EVs after GST reduction led to a spike in ICE sales in the Dec quarter, weighing on EV market share. The three-wheeler (3W) segment, however, stood out as an exception, recording an improvement in penetration levels during the year.
In the two-wheeler (2W) segment, penetration of battery-powered vehicles rose from 6 per cent in 2024 to a peak of 8.1 per cent during the Jan-Sept 2025 period. However, a lower EV share in the Dec quarter, which was the first post-GST rate-cut quarter led to overall E2W penetration for 2025 to be 6.3 per cent. Similarly, EV penetration (excluding hybrid models) in the passenger vehicle (PV) segment, including cars and SUVs, improved from 2.5 per cent in 2024 to nearly 4 per cent for the year. In contrast, electric three-wheeler penetration (excluding e-rickshaws) increased sharply from 12 per cent in 2024 to 18 per cent in 2025.
Despite the pressure on penetration, EV sales growth remained robust across segments. Total registrations of battery-powered EVs-including 2W, 3W, cars and SUVs-rose 16 per cent year-on-year to 22.7 lakh units in 2025, up from 19.5 lakh units in 2024, Vahan data showed.
The electric two-wheeler segment reported an 11 per cent increase in volumes to 12.8 lakh units in 2025, up from 11.5 lakh units a year earlier. The electric PV segment (excluding hybrids) delivered the strongest performance, with registrations surging 77 per cent to 1.8 lakh units from about 99,500 units in 2024, aided by aggressive expansion by existing players and the entry of new manufacturers. Electric three-wheeler volumes grew 15 per cent year-on-year to 8 lakh units, compared with 6.9 lakh units in 2024, with e-rickshaws accounting for around 70 per cent of total E3W sales during the year.
