India’s EV Sector Secures ₹2.23 Lakh Cr Investment Over the Past Five Years, But Funding Gap Persists

India’s electric transport sector has attracted ₹2.23 lakh crore investments over the past five years, but the industry needs a cohesive investment framework to achieve its 2030 goals, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

The IEEFA report further stated that India targets electric vehicle (EV) sales comprising 30% of all private cars, 70% of commercial vehicles, 40% of buses and 80% of two- and three-wheelers by 2030. Achieving these goals requires substantial investment in EV manufacturing, charging infrastructure and supportive ecosystems.

Massive Funding Gaps Persists

“While ₹2.23 lakh crore is a significant capital mobilisation in just five years, it represents only about 18% of the ₹12,50,000 crore required by 2030,” co-author Subham Shrivastava, Climate Finance Analyst at IEEFA stated in a news release.

“Mobilising the remaining ₹10,26,881 crore ($117.82 bn) by 2030 will require systemic financing reforms,” he added.

“From 2020–2025, electric three-wheelers attracted the largest share (~78%) of investments among vehicle segments, due to the segment’s maturity and commercial-scale operations alongside its fragmented OEM base,” co-author Saurabh Trivedi, Sustainable Finance Specialist at IEEFA stated in the news release. “However, recent investment announcements in 2024 and 2025 reveal a pivot towards electric four-wheelers, driven by rising demand for electric cars,” he added.

IEEFA’s report Capital flows in India’s electric transport sector provides the first consolidated view of realised investments from 2020–2025, identifies investment gaps, and outlines pathways to mobilise capital for the next phase of the nation’s electric transport transition. From an in-depth analysis of capital flows, the authors estimate ₹2,23,119 crore ($25.6bn) was deployed across three core nodes of India’s electric transport ecosystem from 2020–2025: Manufacturing capacity accounted for the bulk, followed by public subsidies and incentives and EV charging infrastructure.

The report further indicated that internal accruals accounted for the largest share of realised EV manufacturing investment (₹1,59,701 crore/$18.32bn), followed by debt (₹36,738 crore/$4.22bn) and equity (₹6,455 crore/$740mn).

This aggregate pattern, however, masks meaningful variation across vehicle segments, where the balance between internal funding and external capital reflects differences in market structure, capital intensity and firm composition.

For instance, the electric three-wheeler segment— characterised by a highly fragmented OEM base—relied predominantly on internal accruals and some debt, whereas segments such as electric four-wheelers and two-wheelers, led by more established incumbents, exhibited a relatively more diversified financing mix.