India Electric Car Market

Lowering India's oil imports is driving the market growth

India has been spending a lot of money importing crude oil to power its automobiles. About 80% of the oil used in India is imported, according to the Petroleum Planning and Analysis Cell (PPAC). This means that fluctuations in crude prices could have a negative impact on the exchequer and the economy. Reducing oil imports—a large portion of which is used to run vehicles will result from a drive toward the use of Evs.

It would enable the government to reallocate these money to the construction of the nationwide infrastructure required to power electric cars, including capacity for producing batteries and charging stations. Furthermore, the country's need for electric cars is rising as a result of falling lithium-ion battery prices and the "Make in India" initiative's growing emphasis on homegrown manufacturing. In addition, the Indian electric cars market CAGR is anticipated to be driven in the upcoming years by the increasing integration of EVs with a number of cutting-edge technologies, including remote sensors, GPS navigation, anti-theft locking systems, etc.

Additionally, the growth in electric vehicle manufacturing and sales is mostly due to government programs and subsidies. To encourage the use of electric car in the country, the Faster Adoption and Manufacturing of (Hybrid &) Electric cars (FAME) in India program was introduced in April 2015. Following that, in April 2019, the FAME-II scheme—which would have supported 55,000 e-passenger cars and charging stations was introduced with a budget cost of $1.3 billion (INR 10,000 crore). The Union Budget 2022–2023 indicated the government's extension of the program until 2024.

The program is mostly applicable to cars registered for commercial use or utilized for public transportation, with a strong focus on providing accessible and environmentally friendly public transit to the general public. Moreover, Karnataka leads the list of states with the most participants in the scheme, followed by Tamil Nadu, Maharashtra, Rajasthan, and Delhi. This is likely due to the additional incentives offered at the state level. In May 2021, the government also introduced the manufacture-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage Manufacturing in an effort to reduce reliance on imports and encourage domestic battery manufacture.

With the necessary infrastructure in place, this will help the Electric Vehicles business even more and drastically lower the price of electric cars. Thus, driving the India Electric Car market revenue.

The Global India Electric Car Market Industry is poised for substantial growth, with projections indicating a market size of 5.67 USD Billion in 2024 and an anticipated expansion to 45.32 USD Billion by 2035. This growth trajectory is underpinned by a compound annual growth rate (CAGR) of 20.8% from 2025 to 2035. The increasing adoption of electric vehicles, driven by government policies, technological advancements, and changing consumer preferences, suggests a robust future for the industry. The market dynamics reflect a broader global trend towards sustainable transportation solutions.

Increasing environmental awareness among consumers is driving the Global India Electric Car Market Industry. As pollution levels in urban areas rise, more individuals are seeking sustainable transportation options. Electric vehicles are perceived as a cleaner alternative, contributing to reduced greenhouse gas emissions. This shift in consumer behavior is likely to accelerate the transition towards electric mobility, with projections indicating that the market could expand to 45.32 USD Billion by 2035. The growing emphasis on sustainability aligns with global trends, further enhancing the appeal of electric vehicles in India.

The Global India Electric Car Market Industry is significantly influenced by government incentives and policies aimed at promoting electric vehicle adoption. The Indian government has implemented various schemes, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) initiative, which provides financial subsidies for electric vehicle purchases. These incentives not only reduce the upfront cost for consumers but also encourage manufacturers to invest in electric vehicle technology. As a result, the market is projected to reach 5.67 USD Billion in 2024, reflecting the effectiveness of these policies in stimulating demand for electric cars.

Rising fuel prices are a significant driver for the Global India Electric Car Market Industry. As traditional fuel costs escalate, consumers are increasingly considering electric vehicles as a cost-effective alternative. The long-term savings associated with electric vehicle ownership, including lower operating costs and maintenance, make them an attractive option for budget-conscious consumers. This economic shift is likely to contribute to the market's growth, with projections suggesting a market size of 45.32 USD Billion by 2035. The interplay between fuel prices and electric vehicle adoption underscores the economic viability of transitioning to electric mobility.

The expansion of charging infrastructure is crucial for the Global India Electric Car Market Industry. The Indian government, along with private players, is investing in the development of charging stations across urban and rural areas. This infrastructure is essential for alleviating range anxiety among potential electric vehicle buyers. As charging networks become more accessible, consumer confidence in electric vehicles is likely to increase, thereby driving market growth. The establishment of a comprehensive charging ecosystem is expected to play a vital role in achieving the projected market size of 5.67 USD Billion by 2024.

Technological advancements in battery technology are pivotal for the Global India Electric Car Market Industry. Innovations in lithium-ion batteries, such as improved energy density and reduced charging times, are enhancing the performance and affordability of electric vehicles. These advancements not only make electric cars more appealing to consumers but also support manufacturers in scaling production. As battery costs continue to decline, the market is expected to experience a compound annual growth rate (CAGR) of 20.8% from 2025 to 2035, indicating a robust growth trajectory driven by enhanced battery capabilities.

In India, the India Electric Car market has been steadily expanding. One of the main things pushing electric car sales is the rising cost of gasoline. Additionally, the Indian government is encouraging the usage of electric cars in an effort to lessen air pollution and support sustainable growth. In an effort to reduce reliance on fossil fuels and enhance air quality, electric cars are also being used in public transit. Furthermore, the nation's need for electric cars is being fueled by the expanding number of electric car charging stations.

This is bolstering the market's growth, along with the addition of the internet of things (IoT) to electric car charging station systems, which helps consumers find nearby charging stations, find empty places, and arrange opportune times for fill-ups. 

In addition, the Government of India is launching programs to offer various subsidies and financial help for the purchase of electric cars. Moreover, a growing number of ride-sharing businesses are using electric cars to provide their clients with quiet, environmentally responsible journeys. However, the government's implementation of favorable laws and programs contributed to the robust growth of electric cars in India in 2021. India's largest percentage of electric car sales in 2021 belonged to Uttar Pradesh. Along with Tamil Nadu (30,036 units) and Karnataka (33,302 units), the total number of units sold across all categories was 66,704.

Leading India Electric Car market players are investing heavily in research and development in order to expand their product lines, which will help the e-vehicle market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their  footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, E-Car industry must offer cost-effective items.