India’s electric vehicle market is entering a new phase as wider model choices, improving affordability, expanding charging networks and lower operating costs build consumer confidence and position the country for faster mainstream EV adoption ahead.
06 Dec 2025 | 2439 Views | By Akhilesh Sahu, Alvarez & Marsal India
India’s passenger car market has shifted gears, what looked like a slow build-up is now accelerating into a full-blown electric vehicle (EV) revolution. Vahan data reveals that, EV share, which had been range-bound between 2 to 3% for the last two years, has now consistently stayed above 4% for the ...
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India’s passenger car market has shifted gears, what looked like a slow build-up is now accelerating into a full-blown electric vehicle (EV) revolution. Vahan data reveals that, EV share, which had been range-bound between 2 to 3% for the last two years, has now consistently stayed above 4% for the past four months and further climbed to more than 5% in last two months. This could well be the inflection point from which penetration leaps to ~15% over the next 4 to 5 years.
New model launches such as MG’s Windsor and Mahindra’s BE.06 and XUV.e9 (XEV 9e) over the past year have fuelled this growth. While the Windsor has reached sales of over 4,000 units per month, the BE.06 and XEV 9e are together adding another 3,000 monthly units to the segment. The average monthly electric car sales crossed 14,000 this year; a jump of over 60% over last year.
India today stands at a similar inflection point as China and Europe did around five years ago. In those regions, a combination of wide model choice, sufficient range, narrowing upfront premiums, and a robust charging network propelled EV penetration between 5 to 8% within a year post they hit a critical mass.
The question, then, is what has changed in recent months to transform optimism into momentum. Here are some factors that played a big role.
The Power of Born-Electric Designs: Distinct value proposition
Windsor from MG has targeted value-conscious buyers with a born-EV platform and attractive pricing model. Making Battery purchase optional has made a unique offering lowering purchase cost. Mahindra has positioned its EVs toward tech savvy customers with futuristic design and advanced features. It has a distinct and aspirational positioning for new electric cars, shifting the perception away from being merely a lower-cost, low-maintenance extension of ICE vehicles. The success of these new models underscores the distinct positioning of born electric vehicles resonating with customers.
Price Barriers Fall: EVs Becoming Affordable Upfront
EVs are becoming increasingly affordable. For example, the top-selling JSW-MG Windsor, offered with a battery-rental option at ₹9.99 lakh and with battery included, at ₹13.99 lakh. This makes it competitively priced against automatic ICE variants starting at ₹13.44 lakh. As battery costs continue to fall, the attractiveness of EVs will further enhance. For instance, the premium on the compact SUVs compared to ICE counterpart is projected to drop to around 13% in next 5 years.
Saving While Driving: The TCO Advantage
Electric cars already enjoy lower lifetime costs compared to their petrol counterparts across most segments. For example, the Creta EV currently has ~7% lower lifetime costs than its petrol version, with savings expected to rise to ~13% in the next five years. The primary drivers are lower fuel and maintenance expenses: electric SUVs typically cost 5% lower in running costs; added advantage include insulation from petrol price volatility, reduced maintenance needs, and state incentives such as toll exemptions on several highways and expressways, all of which make EV ownership more attractive and stress-free.
Range Anxiety Fades: Expanding charging network & longer drives
While EVs have the inherent advantage of convenient home charging: a robust public charging infrastructure is still critical. India has seen rapid expansion of charging network to ~35,000 AC and DC fast chargers across cities and highways in recent years. Government’s support through FAME and PM E-DRIVE schemes (₹3,000 crore subsidy), and guidelines for charger interoperability have played critical role in this.
Additionally, recently launched EVs from Mahindra and Tata are offering range of around ~500 km. This are changing the landscape and assuring customers of long drives without anxiety.
Accelerating the Next Phase of EV Adoption in India
While differentiated product value proposition, monetary incentives, increasing range and expanding charging networks have kick-started EV uptake in India, the sector still needs a few last-mile fixes to move from momentum to mass adoption.
Government and Policy Support
Make home charging possible for all residential types: RWAs at time don’t allow the installation of private or shared chargers-limiting the target customer segment for EV. Laying down clear rules/SOP, setting up empowered regulatory body for enforcement and grievance redressal will bring clarity, confidence and also empowering authority for RWAs for compliance. Mandating upcoming residential projects to have private charging provisions can resolve the situation for future.
Standardize incentives & stabilize policy: Standardize perks like toll, parking waivers or lower registration fees across all states. This will provide prospective EV buyers much more assurance on the expected savings irrespective of place of running. Improving consistency of policy terms-such as eligibility criteria, assessment and incentive calculation methodologies along with timely benefits disbursals are need of the hour. Increasing policy tenures from current 3 years to more than 5 years will also boost OE confidence to evaluate and deploy large scale investments.
Industry Actions and Innovation
Expand EV choices & improve charging time: India currently offers about 25 battery-electric vehicle (BEV) models, but only 7 of these are in the mass-market (around ₹12 lakh) range. More affordable options are needed across all price bands. Entry of prominent OE such as Suzuki’s planned launch of EV models could further help move demand from early adopters to the mainstream. Leading EV makers (like BYD, Lucid, Hyundai and Zeekr) have already demonstrated ultra-fast charging (5~10 C) using high-voltage (~800 V) and innovative battery systems. 5~10 min charging can eliminate range anxiety and unlock the next wave of EV growth. Therefore, Indian automakers need to develop and offer such technologies.
Provide resale assurance: Practical innovations-financed battery replacement plans, guaranteed buyback schemes and service packages that protect resale value-can erase lingering consumer worries and tip more buyers toward electric
India is at a real tipping point for electric cars; distinct value proposition, lower costs, more models and better charging are driving strong growth. If government and industry work on above levers, India can look towards mirroring the rapid adoption trajectory of China, Europe, and the US.
Akhilesh Sahu is the Managing Director, Business Transformation Services at Alvarez & Marsal India. Views expressed are the author's personal.