India’s EV Sales Hit 4% Market Share in May 2025, Marking Sharp Growth

New Delhi, Jun 9 (KNN) Electric passenger vehicles captured more than 4 per cent of India's total passenger car sales in May 2025, representing a substantial increase from the 2.6 per cent market share recorded in the corresponding period last year. 

The data, released by the Federation of Automobile Dealers Associations (FADA), highlights the accelerating adoption of electric mobility in the country's automotive sector.

The May figures demonstrate continued momentum from April, when electric vehicles held a 3.5 per cent market share, indicating a consistent upward trajectory in consumer acceptance. 

Retail sales reached 12,304 electric cars in May, compared to 8,029 units sold during the same month in 2024. April sales totaled 12,233 units, showing month-on-month stability in demand.

FADA Chief Executive Officer Saharsh Damani characterised the development as a significant industry milestone, attributing the growth to technological advances in battery systems, enhanced vehicle range capabilities, and declining costs relative to earlier electric vehicle models. 

The organistion views these improvements as key drivers behind increased consumer adoption.

Market leadership remained concentrated among three major manufacturers, with Tata Motors maintaining its dominant position through 4,351 units sold in May. 

JSW MG Motor secured second place with 3,765 units, achieving a notable 149 per cent year-over-year increase. Mahindra & Mahindra rounded out the top three with 2,632 units. These companies collectively represented more than 87 per cent of total electric car sales during the month.

Industry stakeholders expressed concern about potential supply chain disruptions that could affect future growth prospects. 

FADA specifically highlighted risks associated with rare-earth materials, particularly given China's control over global rare-earth magnet production essential for electric vehicle manufacturing. Recent tightening of export regulations by Chinese authorities has raised concerns about material availability.

Damani cautioned that inadequate supply conditions for rare-earth materials could result in production slowdowns, potentially impacting retail sales performance in upcoming months. 

The warning underscores the industry's vulnerability to global supply chain dependencies despite strong domestic demand trends.

Government policy initiatives announced this week aim to strengthen the electric vehicle ecosystem through foreign investment incentives. 

New guidelines permit approved companies to import electric four-wheelers valued at minimum USD 35,000 under reduced customs duties of 15 per cent for five-year periods. 

The policy targets international manufacturers, including Tesla, as potential participants.

Qualifying companies must demonstrate minimum investment commitments of Rs 4,150 crore, with annual import allowances capped at 8,000 units under the preferential duty structure. 

Unused import quotas can be carried forward to subsequent years, providing flexibility for participating manufacturers.

The comprehensive policy framework supports India's strategic objective of establishing itself as a global electric vehicle manufacturing hub while advancing the nation's broader environmental sustainability and green mobility transition goals.

(KNN Bureau)