New Delhi: Electric vehicles (EVs) are set to account for between 10 percent and 12 percent of total vehicle sales in India during the current financial year, up from 8.5 percent in FY26, according to ratings agency India Ratings and Research (Ind-Ra), which describes the sector as moving into a wider scale-up phase led by electric two-wheelers. Uptake will stay concentrated in categories where the cost case for going electric is already settled, the agency said.
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Ind-Ra places electric two-wheeler penetration at 8 percent to 10 percent for FY27, against 6.6 percent in the preceding year. Three factors underpin that projection, the agency said: running costs below those of petrol equivalents, the practicality of charging at home, and an expanding line-up of models as established manufacturers add electric offerings.
Electric three-wheelers will continue to lead every other vehicle category on electrification, Ind-Ra said, with penetration climbing to between 62 percent and 65 percent in FY27 from 59 percent a year earlier. The agency attributes this to running economics that work for commercial operators and to sustained policy backing.
Where journeys are longer, the shift will be more measured, the agency said, with buyers still weighing purchase prices, how readily they can charge, and how far a vehicle will travel between charges.
Even so, electric passenger vehicles should post strong percentage growth off a low base, Ind-Ra said, with penetration reaching 6 percent to 8 percent in FY27 against 4.4 percent in the year to March 2026, helped by fresh model launches. Buyers will continue to be drawn largely from metropolitan cities and higher income brackets, the agency added.
Electric buses are projected to move from 4.37 percent penetration in FY26 to between 6 percent and 8 percent in FY27, on the strength of order books already in place and procurement by government bodies. How much of that translates into vehicles on the road will depend on whether state transport undertakings have the supporting infrastructure in place, Ind-Ra said.
Shruti Saboo, Director, Corporates at Ind-Ra, said: "India's EV market continues to demonstrate healthy growth potential, with adoption increasingly supported by favourable ownership cost, improving use-case economics, a widening range of vehicle offerings, and rising consumer acceptance."
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She said, "The next phase of India's EV growth will depend on the development of a robust domestic value chain, where India reduces its dependence on imports and strengthens indigenous capabilities across key EV components, particularly batteries and related technologies, alongside expansion of charging infrastructure."