Sales of electric vehicles in India jumped by 100% year-on-year in June'25, with 5% of all new vehicles sold being electric vehicles according to the Federation of Automobile Dealers Associations (FADA).
In a significant shift for the Indian automotive industry, electric vehicles (EVs) have shown a robust and accelerating growth trajectory, according to the Federation of Automobile Dealers Associations (FADA) report published on July 7, 2025.
The EV segment, which accounted for nearly 2% of all new passenger vehicle sales in June 2024, more than doubled to a 5% share in June 2025. This surge in EV adoption was evident across key vehicle categories, including two-wheelers and passenger cars.
FADA attributes this growth to a combination of factors. Expanded model variety, government incentives, improved charging infrastructure, and technology advancements have all contributed to making EVs more competitive with traditional vehicles. In the two-wheeler segment, EV penetration rose month-on-month, reaching 7.28% in June 2025.
Despite a modest 2.45% year-on-year growth in overall passenger vehicle sales, EV sales are outpacing the broader market growth. The overall Indian auto industry growth in June 2025 was 4.84% YoY, with all major vehicle segments posting gains. However, passenger vehicle retail sales showed a slight month-on-month decline, influenced by heavy monsoon rains and liquidity tightening.
The rising EV presence is reshaping market dynamics by gradually shifting buyer preferences, while traditional internal combustion engine (ICE) vehicle sales demonstrate slower growth. Additionally, the rising EV presence is influencing buying patterns, including in two-wheelers, where EV adoption is part of a broader rural and urban demand mix.
Looking ahead, FADA indicates an optimistic future outlook for EVs, driven by factors such as continued expansion in EV model availability, sustained and possibly enhanced government incentives, ongoing improvements in charging infrastructure, and expected seasonal and festival demand boosts in coming months.
However, factors like heavy monsoons, financing constraints, supply chain issues, and geopolitical tensions may temper short-term sales growth. Despite these challenges, the strong EV momentum signals a transformative shift in India's automotive market towards electrification.
Moreover, the government's commitment to long-term capital expenditure (capex) in physical infrastructure and sustainability sectors positions the Commercial Vehicle (CV) and Construction Equipment (CE) markets as direct beneficiaries, particularly as project execution gathers pace post-monsoon onset. The CV segment, for instance, registered a 6.6% YoY growth in June 2025, despite a modest 2.97% MoM decline.
In conclusion, the June 2025 FADA report underscores a promising future for electric vehicles, positioning them as a key component of India's automotive future with increasing impact on total vehicle sales and market structure.
- The expansion in EV model variety, combined with government incentives, improved charging infrastructure, and technology advancements, have made EVs more competitive in the automotive industry.
- Despite a modest growth in overall passenger vehicle sales, EV sales are outperforming the broader market, indicating a strong subscription to this new technology.
- FADA's optimistic future outlook for EVs is driven by factors such as continued model variety, sustained government incentives, improved charging infrastructure, and seasonal demand boosts.
- The rising EV presence in the Indian market is reshaping business strategies, influencing buying patterns not just in passenger cars, but also in segments like two-wheelers.
- The government's commitment to long-term capital expenditure in physical infrastructure and sustainability sectors could potentially boost the growth of Commercial Vehicle and Construction Equipment markets.
- The strong momentum of EVs signals a transformative shift in India's automotive market towards electrification, and this shift may require significant investment in energy infrastructure and technology.
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