Electric Car Sales Penetration in India Projected to Cross 7% by FY28: CareEdge

New Delhi, July 16, 2025 – India’s electric car market is poised for significant growth, according to a new report released by CareEdge Advisory, with sales penetration expected to surpass 7% by FY28. The projection hinges on the timely resolution of rare earth element (REE) supply disruptions and is supported by a strong pipeline of new EV model launches.

The expansion will depend on the government’s move to make charging infrastructure more accessible pan-India.

EV Market Grows Over 20-Fold in Four Years

India’s electric car sales have surged remarkably, rising from just over 5,000 units in FY21 to more than 1.07 lakh units in FY25, marking a pivotal shift in consumer adoption and industry focus.

“India’s electric car sales penetration is likely to cross 7% by FY28, provided rare earth disruption is resolved promptly,” said Tanvi Shah, Senior Director & Head at CareEdge Advisory & Research. She emphasised that with robust model pipelines, expanding EV charging infrastructure, and battery localisation under the PLI scheme, the country is well-positioned for accelerated EV adoption.

Charging Infrastructure Sees Rapid Growth

A charging infrastructure, one of the most crucial enablers of EV adoption, has experienced record-breaking growth. The report notes that the number of publicly announced EV charging points has increased by almost 22,000 in the first half of FY25, compared to 5,151 in FY22.

This rise can be explained by the overall increase in government and private sector investment in removing decades-old infrastructure deficiencies, which have long been regarded as the key choke point to EV growth.

Policy Push and Cost Reduction Measures

The report credits several government initiatives as key drivers for future growth:

• FAME III scheme to promote EV demand
• Production-Linked Incentive (PLI) scheme for advanced chemistry cell (ACC) batteries
• Customs duty exemptions on critical battery minerals such as cobalt, lithium-ion waste, and graphite

These initiatives aim to reduce the cost of electric vehicles and strengthen the domestic supply chain, thereby enhancing India’s manufacturing competitiveness and reducing its dependency on imports.

Four-Wheeler Segment Set for High-Growth Phase

While two- and three-wheelers still dominate India’s EV landscape, the four-wheeler segment is now entering a high-growth phase, the report noted. This shift is being driven by improvements in infrastructure, supportive government policies, and increased private sector participation.

As India continues to prioritise sustainability and green mobility, the electric car segment is expected to play a transformative role in the nation’s transportation future.

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