India's Electric Vehicle Market Set for Robust Growth in FY26
Despite a noticeable slowdown in February volumes, industry estimates indicate that electric vehicle (EV) sales growth in India for the fiscal year 2026 (FY26) is poised to exceed the levels achieved in the previous year. This optimistic outlook is underpinned by sustained demand momentum across key segments.
EV Growth Outpaces Traditional ICE Segment
In the current fiscal year, the EV industry is anticipated to record a nearly 20% rise in total volumes, a significant increase compared to the 17% growth observed in FY25. In stark contrast, internal combustion engine (ICE) volumes across all vehicle categories are expected to post only high single-digit growth in FY26. This divergence underscores the accelerating shift towards electric mobility in India.
As of now, with one month remaining in the fiscal year, total EV registrations have reached approximately 2.17 million units. This marks a substantial increase from the 1.97 million units registered in FY25, highlighting the rapid adoption of electric vehicles.
February Slowdown: A Temporary Blip Amid Strong Yearly Trends
February 2026 witnessed a sequential decline in electric vehicle retail volumes across all segments. Total EV registrations stood at 193,829 units, down 12% from the 220,249 units recorded in January 2026. However, this month-on-month dip is largely attributed to normal post-January demand moderation.
Importantly, on a year-on-year basis, the market demonstrated robust expansion. February volumes were 38% higher than the 140,170 units sold in February 2025, according to data from the Vahan dashboard. This indicates that the underlying adoption trends remain firmly positive.
Segment-Wise Performance Analysis
Electric Two-Wheelers (E2W): As the largest contributor to overall EV volumes, this segment reported sales of 111,680 units in February, a 9.5% sequential decline from January. Despite this, monthly sales continued to remain above the one-lakh mark. Year-on-year, the segment registered impressive growth of 45.6%, reflecting sustained consumer interest.
Electric Three-Wheelers (E3W): Sales in this category fell 12.4% month-on-month to 66,398 units, compared to 75,765 units in January. However, on a yearly basis, the segment expanded by 25.1%, showcasing steady demand.
Electric Passenger Vehicles (EPV): This category experienced the sharpest sequential correction, with volumes declining 28.3% to 13,659 units in February from 19,050 units the previous month. Nevertheless, EPV sales surged 45% year-on-year, indicating strong growth potential despite monthly fluctuations.
Future Outlook and Industry Sentiment
Overall, while February saw a broad-based sequential slowdown, the EV adoption trajectory in India is expected to maintain its positive momentum on a yearly basis. The projected growth in FY26, supported by continued demand across two-wheelers, three-wheelers, and passenger vehicles, suggests that the electric vehicle market is on a firm upward path, significantly outpacing the traditional ICE segment.
