EV Boom Fuels India’s Car Sales Growth, Reshapes Market Rankings

Electric vehicles contributed to almost one-fifth of the incremental growth in passenger vehicle sales in FY26, helping domestic carmakers Mahindra and Mahindra Ltd and Tata Motors Passenger Vehicles Ltd oust Hyundai Motor India from the No. 2 position, reported Mint.

Car sales surged 13% to 4.7mn units in FY26 from 4.16mn units the previous year, Mint reported citing Federation of Automobile Dealers Associations (Fada). Out of this incremental growth of over 540,000 vehicles, about one-fifth came from electric vehicles.

EV sales have increased 84% to 199,923 units in FY26 from 108,873 units a growth of over 91,000 units, Fada further said.

Reason for Rise in EVs

The high contribution of EVs in incremental sales growth also reflects how India remains an oasis for scaling up technology when global EV sales are losing momentum as policy support for the sector is withdrawn. Global EV sales declined year on year in January and February as the US and Chinese markets struggled due to policy changes, according to Benchmark Mineral Intelligence (BMI).

Electric vehicles sales in India are rising primarily because of concerns over fuel price volatility linked to geopolitical tensions in West Asia, which has made consumers more conscious of long-term running costs. Even the expectation of higher petrol and diesel prices is pushing buyers towards EVs, which are seen as a more economical and stable alternative, supported by better availability of models and growing consumer preference for cleaner mobility.

India’s EV Market Leaders

Together accounting for a 61% share of the EV market, Mahindra and Tata Motors PV drove most of the incremental growth. According to Mint, Mahindra’s sales jumped to 631,638 cars in FY26 from 517,081 in the previous year 2025, an increase of 114,557 units. The company's EV sales in the same period grew to 42,721 from 8,426 units, contributing 30% to the company's incremental sales growth.

Tata Motors PV’s sales rose 14% to 613,513 units in FY26 from 535,863 units. EV sales increased to 78,811 units from 57,994 units, contributing about 26% to Tata’s incremental growth of 77,000 units.

Global EV Growth Slows

Global electric vehicle (EV) sales growth is slowing due to a degree of disillusionment as consumers confront practical issues like affordability, inadequate charging infrastructure and questions over battery longevity, according to a September 2024 report published by EY.

The report further added that Western manufacturers in particular have been slow to recognise that the next phase of growth will be driven not by early adopters but by mainstream consumers, who in turn will require EVs that prioritise value as well as premium features.