Context: India is witnessing a structural shift from conventional internal-combustion vehicles towards electric mobility. The transition is increasingly moving beyond vehicle adoption towards building a complete ecosystem covering batteries, charging infrastructure, manufacturing and exports.
Key development
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- EV sales increased from around 50,000 units in 2016 to 2.3 million units in 2025 nearly 46-fold growth.
- EV adoption increased from 08% in FY2015–16 to 8.26% in FY2025–26.
- EV exports increased from USD 1.2 million in 2020 to USD 84 million in 2024.
- India’s transport sector accounts for around 9% of national emissions, making transport electrification important for the climate transition.
What is an Electric Vehicle?
An Electric Vehicle (EV) is a vehicle powered by an electric motor using electricity stored in a battery or generated through an electrochemical process.
i. BEV-Completely powered by electricity stored in batteries.
ii. HEV-Combines an internal-combustion engine with an electric motor.
iii. PHEV-Hybrid vehicle whose battery can also be externally charged, allowing greater electric-only operation.
iv. FCEV-Uses hydrogen in a fuel cell to generate electricity for the electric motor.
Why is India Moving Towards Electric Mobility?
India’s transition towards electric mobility is being driven by three interconnected objectives—cleaner transport, energy security and industrial transformation.
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- The transport sector contributes around 9% of India’s total emissions, making its decarbonisation important for India’s climate commitments.
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- EVs can reduce dependence on fossil-fuel imports, thereby strengthening energy security and reducing exposure to international oil-price volatility.
- The transition is simultaneously creating opportunities in battery manufacturing, power electronics, charging infrastructure, R&D, software and advanced automotive manufacturing.
Thus, EV adoption is no longer only an environmental policy; it is increasingly an industrial and strategic policy.
Evolution of Electric Mobility in India
| Phase | Key Development | Significance |
|---|---|---|
| 2015: Policy Foundation | FAME India Scheme was launched under the NEMMP 2020 framework to provide demand incentives, support charging infrastructure and promote domestic EV manufacturing. | Shifted EVs from a technological concept towards a policy-supported mobility transition. |
| 2015–19: Initial Adoption | FAME-I operated until March 2019, with early adoption largely driven by electric three-wheelers/e-rickshaws. | EVs gained a foothold mainly in shared and informal mobility. |
| 2019–21: Consolidation | FAME-II followed FAME-I and was implemented up to April 2024. | Policy support expanded the ecosystem and created conditions for wider EV adoption. |
| 2021 onwards: Ecosystem Expansion | EV sales reached around 2.3 million units in 2025, compared with approximately 50,000 in 2016—nearly 46-fold growth. EV adoption rose from 0.08% in FY2015-16 to 8.26% in FY2025-26. | India entered a phase of mass adoption, domestic manufacturing, export potential and integrated EV ecosystem development. |
KEY DEVELOPMENTS IN INDIA’S EV ECOSYSTEM
1. Rapid Expansion of the EV Market:
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- EV sales increased from approximately 50,000 units in 2016 to 2.3 million units in 2025, representing nearly 46-fold growth.
- In 2025, electric two-wheelers accounted for around 12.8 lakh units, while electric three-wheelers accounted for around 8 lakh units, highlighting the importance of affordable and mass-market mobility.
- Uttar Pradesh emerged as the largest EV market in 2025 with more than 4 lakh units, followed by Maharashtra with 2.66 lakh and Karnataka with 2 lakh units.
2. EVs as an Emerging Export Opportunity:
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- EV exports increased from USD 1.2 million in 2020 to USD 84 million in 2024.
- Nepal, Indonesia and Japan emerged among the major export destinations.
- This expansion provides an opportunity for India to integrate its EV industry into global value chains and supply networks.
3. Expansion of Charging Infrastructure
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- India had 52,718 public charging stations.
- Around 16,561 of these had fast-charging facilities.
- The e-Amrit platform enables users to locate available charging stations.
4. Measuring State-Level Progress
The NITI Aayog launched the India Electric Mobility Index (IEMI) in August 2025 to assess the progress of States and UTs in developing their EV ecosystems. The index categorises States/UTs as Frontrunners, Performers and Aspirants. Delhi, Maharashtra and Chandigarh have emerged as Frontrunners. Three Pillars of IEMI-
| Pillar | Focus |
|---|---|
| Transport Electrification | Extent of EV adoption across transport segments |
| Charging Infrastructure Readiness | Availability and preparedness of charging infrastructure |
| EV Research & Innovation | State-level R&D and technological capability |
5. Rise of EV Start-ups and AI-enabled Mobility
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- Around 400 EV start-ups are operating in India, working in areas such as battery technology, charging infrastructure, low-cost manufacturing, data-driven mobility and EV software.
- Thus, India’s EV transition is also contributing to the emergence of connected, intelligent and software-driven mobility.
6. Growing Investment in the EV Ecosystem
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- Investment in India’s EV ecosystem exceeded USD 1.4 billion in FY2025, around 27% higher than in 2024.
- EV manufacturers attracted approximately USD 1.2 billion, reflecting growing investor confidence in India’s
POLICY ARCHITECTURE FOR INDIA’S EV TRANSITION
1. PM E-DRIVE Scheme: The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, notified in 2024 by the Ministry of Heavy Industries. It is a major intervention for accelerating EV adoption and building the domestic ecosystem.
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- It has an outlay of ₹10,900 crore and covers e-2Ws, e-3Ws, e-trucks, e-buses and e-ambulances.
- The scheme aims to support more than 28 lakh EVs through targeted demand incentives.
- ₹2,000 crore has been earmarked for development of public EV charging infrastructure.
- ₹4,391 crore has been allocated for 14,028 e-buses, strengthening electrification of public transport.
- The Phased Manufacturing Programme (PMP) promotes domestic manufacturing of specified EV components.
2. PM e-Bus Sewa–Payment Security Mechanism: The PM e-Bus Sewa–Payment Security Mechanism (PSM) Scheme seeks to accelerate electric public transport through a Public-Private Partnership (PPP)
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- It aims to deploy 10,000 electric buses in urban areas.
- The scheme provides payment security for buses deployed for up to 12 years.
- Government support extends to bus operations, depot infrastructure, charging networks and green mobility initiatives.
3. Promoting Domestic Electric-Car Manufacturing: The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) seeks to attract investment in domestic EV manufacturing. Key requirements include:
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- Minimum investment of ₹4,150 crore.
- At least 25% Domestic Value Addition (DVA) by the third year.
- At least 50% DVA by the fifth year.
4. PLI Scheme for Automobile & Auto Components: The PLI-Auto Scheme, introduced in 2021, promotes manufacturing of Advanced Automotive Technology (AAT), including EVs. As of January 2026, cumulative incentives of ₹2,377.56 crore had been disbursed to approved applicants, including ₹2,319.88 crore for EV manufacturers. It aims to:
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- Attract investment across the automotive value chain.
- Promote advanced automotive technologies.
- Encourage domestic manufacturing with a minimum 50% domestic value addition.
- Strengthen India’s position in global automotive supply chains.
5. PLI for Advanced Chemistry Cell Batteries: The PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage, launched in 2021, addresses one of the most important components of the EV ecosystem—the battery.
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- The scheme has an outlay of ₹18,100 crore.
- It aims to establish 50 GWh of cumulative ACC manufacturing capacity in India.
- The performance phase runs from 1 January 2025 to 31 December 2029.
6. National Mission on Manufacturing: The National Mission on Manufacturing (NMM) identifies EVs as a key “seed” sector for innovation-led industrial growth. The Mission seeks to:
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- Integrate EV manufacturing into global value chains.
- Promote advanced manufacturing and technology development.
- Strengthen manufacturing clusters.
- Increase domestic production capabilities.
7. State-Level Policy Support: States have emerged as important drivers of India’s EV transition. As of December 2025, 29 States and UTs had notified EV policies, while four others had policies in draft stages. States such as Tamil Nadu, Maharashtra, Karnataka, Gujarat, Haryana and Uttar Pradesh have emerged as important EV manufacturing and investment centres. State incentives include:
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- Capital subsidies.
- Preferential land allotment.
- Stamp-duty waivers.
- SGST reimbursement.
- Support for EV manufacturing and charging infrastructure.
Challenges to India’s EV Transition
i. India remains dependent on imports for several critical minerals, battery cells and advanced components. This can expose the EV industry to global supply-chain disruptions and price volatility.
ii. Charging stations remain unevenly distributed, particularly across smaller cities and rural areas. Fast-charging availability and interoperability also need further improvement.
iii. EVs often have a higher initial purchase price than conventional vehicles largely because batteries account for a substantial share of vehicle cost.
iv. Rapid EV adoption will generate a growing volume of end-of-life batteries, requiring efficient collection, recycling and safe disposal systems.
v. India needs deeper localisation of cells, power electronics, semiconductors and other advanced components to move from EV assembly towards globally competitive manufacturing.
vi. Large-scale EV adoption will increase electricity demand and create localised charging-load pressures, requiring smarter grids, time-of-use charging and greater integration of renewable energy.
Way Forward
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- India should accelerate domestic production of battery cells, critical components and power electronics.
- Charging infrastructure should be expanded on the basis of demand, vehicle density and inter-city corridors.
- India can draw from the EU Battery Regulation by strengthening battery traceability and recovery of critical materials. Thereby creating a circular battery economy.
- The experience of countries such as China and Norway shows the importance of electrifying high-utilisation mobility.
- India should prioritise e-buses, e-3Ws and commercial fleets where higher daily utilisation can generate greater fuel savings and emission reductions.
- EV expansion should be accompanied by smart charging, renewable-energy integration and grid modernisation so that transport electrification genuinely contributes to decarbonisation rather than merely shifting emissions from vehicles to power generation.
Conclusion:
The next phase must focus on battery localisation, reliable charging infrastructure, circularity and technological innovation. A successful EV transition should therefore be measured not merely by the number of vehicles electrified but by India’s ability to build a sustainable electric-mobility ecosystem.
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