India’s Electric Car Market Expected to Grow by FY28 - News

According to a recent report by CareEdge - Advisory, India’s electric car market is moving forward, with expectations of surpassing 7 percent sales penetration by FY28. However, this growth is largely dependent on the timely resolution of disruptions in the supply of rare earth elements (REEs) along with the launch of new electric vehicle (EV) models.

As per the report, the country’s electric car segment has grown significantly, increasing from just over 5,000 units in FY21 to more than 1.07 lakh units in FY25. This growth momentum is expected to continue with strong support from both the government and the private sector.

Tanvi Shah, Senior Director and Head, CareEdge Advisory & Research, emphasized the key factors driving this outlook. She pointed out that electric car sales in India could exceed 7 percent by FY28 if rare earth supply challenges are addressed immediately. Shah also listed out a robust pipeline of model launches, growing charging infrastructure, and battery localization efforts under the PLI scheme as important enablers of faster EV adoption.

Although electric cars make up for a small share of the total EV sales, through public policy and private sector commitment, the segment is now entering a high-growth phase. Once deemed a major challenge in EV adoption, the lack of charging infrastructure is now witnessing a rapid increase. Taking the past three years into consideration, public EV charging stations have increased from 5,151 in 2022 to over 26,000 by early FY25.

Policy measures such as the FAME III subsidy scheme, production-linked incentives for advanced battery cells, and customs duty exemptions on essential battery materials will reduce production costs and improve the domestic EV supply chain resilience.