India's Electric Car Ecosystem To Cross 7% Penetration by FY28, Sales Rise 20x in Three Years

Electric car sales penetration is expected to cross 7 percent by FY28 subject to timely resolution of rare earth element (REE) disruption and riding on the back of new model launches, according to a report by CareEdge Advisory.

The increase in penetration would also be dependent on government push for improving the charging infrastructure in the country. India's electric car ecosystem has witnessed significant momentum over the past three years, growing from just over 5,000 units in FY21 to more than 1.07 lakh units (20x increase) in FY25, it said.

"India's electric car sales penetration is likely to cross 7 per cent by FY28, provided rare earth disruption is resolved in a timely manner. With a robust pipeline of model launches, expanding EV charging infrastructure and battery localisation under the PLI scheme, India is well-positioned to accelerate EV adoption," Tanvi Shah, Senior Director & Head, CareEdge Advisory & Research said.

While electric four-wheelers still comprise a small share of total EV sales -- dominated by two- and three-wheelers -- the segment is now entering a high-growth trajectory supported by both public policy and private sector commitment, it added.

The report noted that charging infrastructure, historically one of the most significant bottlenecks in India's electric vehicle (EV) adoption journey, is witnessing unprecedented growth. Over the past three years, the number of public EV charging stations in the country has grown from 5,151 in CY22 to over 26,000 by early FY25, it said.

Besides, initiatives such as FAME III, production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) batteries, and basic customs duty exemptions on critical battery minerals -- including cobalt, lithium-ion waste, and graphite -- are expected to lower vehicle production costs and improve domestic supply chain resilience, it added.

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