India's Electric Car Market Projected to Hit 130,000-150,000 Sales in FY25: Report

With an improving adoption rate, electric car sales in India are likely to reach 1.3-1.5 lakh in the current fiscal year (FY25), according to a CareEdge Rating report. After a record growth of 90 per cent with volumes at 90,432 units in FY24, the electric car penetration is consistently increasing in the country, driven by the government's efforts towards a more sustainable, environmentally friendly, and efficient transportation sector.

The shift to electric mobility extends beyond cars and trucks and e-rickshaws and e-karts are also gaining popularity across the country.

As per the report, the overall passenger vehicles (PV) industry is expected to exhibit moderate volume growth of around 3-5 per cent in FY25, on account of a high-base effect of FY24, shrinking order book and expectation of persistently subdued demand for entry-level variants in FY25.

“Strong demand for new model launches and SUVs coupled with the expectation of interest rate cuts in the second half of FY25 is expected to keep the sales momentum rolling,” said Arti Roy, Associate Director at CareEdge Ratings.

For the past decade, the utility vehicle (UV) segment has consistently outperformed the PV industry growth rate. In FY24, for the first time, UV sales volume stood higher than passenger cars and vans.

Currently, UVs account for over 55 per cent of all new PV sales, and their share in overall PV sales is expected to further rise over the medium term, according to the report.

“While the market for premium vehicles is predicted to thrive, driven by a surge in demand for luxury and high-end models, entry-level variants are likely to see continued diminished demand due to a downturn in both rural and urban markets,” said Hardik Shah, Director at CareEdge Ratings.