India’s transition to electric mobility

Electric vehicles are powering a cleaner future for India’s transport sector

India is making notable progress in decarbonising its transport sector, driven by policies both at the central and state levels. Between the fiscal year (FY) 2020 and FY2025, EV sales grew 11X, indicating a rapid shift towards electrification of the country’s road transport sector.

Decarbonising the transport sector is crucial for India’s climate goals. Through its updated Nationally Determined Contributions (NDC) under the Paris Agreement, India has committed to reducing the emissions intensity of its GDP by 45% by 2030, compared to 2005 levels, and to achieving net-zero emissions by 2070. Among other sectors, transport is identified as a key contributor to greenhouse gas (GHG) emissions in India, accounting for 14% of energy-related direct emissions and one of the fastest-growing emissions sectors in the country. Further, road transport contributes more than 90% of the transport sector’s CO2 emissions, making it a critical focus area.

Transitioning to EVs offers a significant mitigation opportunity, and India has recognised the need to accelerate the shift. The country signed the Zero Emission Vehicles (ZEV) Declaration at COP26, pledging that all new sales of cars and vans will be zero-emission by 2040. India has also set goals to electrify 30% of private cars, 70% of commercial vehicles and 80% of two and three-wheelers sales by 2030. Finally, it is also a member of the EV30@30 campaign and targets achieving 30% of new vehicle sales to be EVs by 2030.

India’s EV market grew exponentially between FY2020 and FY2025. Total EV registrations surged from approximately 0.175 million units in FY2020 to nearly 1.9 million units in FY2025, representing an elevenfold increase, primarily driven by the two-wheeler and three-wheeler segments. Among four-wheelers, electric light motor vehicle sales grew nearly 100-fold—from just over 1,000 units in FY2020 to more than 100,000 units in FY2025—highlighting a sharp upward trend, albeit from a low base.

In FY2025, Uttar Pradesh led in absolute EV sales, with electric three-wheelers accounting for 70.6% of its total sales. Assam and Bihar followed a similar trend with 94.2% and 78.8% share of electric three-wheelers, respectively. Maharashtra (86.1%), Tamil Nadu (86.3%), Karnataka (85.4%), Odisha (85.8%), and Gujarat (84.5%) recorded the highest shares of electric two-wheelers in their total EV sales.

Government schemes, both central and state, have been crucial to accelerating EV adoption in India in recent years. Since 2015, the central government has announced several promotional measures with an overall budget outlay of INR 712.7 billion (~USD 8.6 billion).

The scope of the central government’s subsidies over the years has covered most vehicle categories, from private vehicles and buses to charging infrastructure. The initial thrust came from Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME)-I scheme (2015–19), which provided purchase subsidies to e-two-wheelers, e-three-wheelers, autorickshaws, e-four-wheelers, light commercial vehicles and buses. The FAME-II scheme (2019–24) followed and significantly expanded the subsidies to accelerate EV adoption. Two-wheelers, both private and commercial, three-wheelers, four-wheelers and buses used for public transport or registered for commercial purposes were eligible for the subsidies. Additionally, the e-Bus SEWA scheme was launched to support a large-scale deployment of electric buses across Indian cities in August 2023. In September 2024, the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme followed the FAME schemes to continue subsidising e-two wheelers, e-three wheelers, e-ambulances, e-trucks, and other emerging EV categories till March 2026.

State governments have followed suit, notifying their own policies to promote and facilitate EV adoption. More than 25 Indian states have notified state EV policies. The 2025 update of Maharashtra, Karnataka, and Madhya Pradesh EV policies focuses on expanding charging infrastructure and promoting renewable energy-powered charging hubs, provides 2030 EV adoption targets across categories, and offers incentives like purchase subsidies and motor vehicle tax exemptions.