Will India Become the Global Hub for Affordable Electric Vehicles?

Akshit Bansal, Founder & CEO, Statiq, is a clean-tech entrepreneur with a strong grounding in electrical engineering and hands-on experience in developing EV hardware and mobility platforms. Skilled in product innovation, systems design, and cross-functional leadership, he blends technical depth with sustainability thinking to drive scalable solutions in India’s emerging electric mobility ecosystem.

This article reflects Akshit Bansal’s perspective on India’s fast-growing EV transition, driven by strong policies, expanding domestic manufacturing, and rising two- and three-wheeler adoption, while emphasising that achieving true price parity with ICE vehicles remains the key hurdle for mass-market penetration.

Fuelled by strong government policies and incentives, India is rapidly establishing itself as a global leader in the adoption of electric vehicles (EVs). On a promising note, EV registrations across all segments crossed 2 million units in 2025 for the first time, driven by strong growth in two- and three-wheelers. However, Passenger vehicle EV penetration stands at 2.5 percent, below the 30 percent target by 2030. Tax incentives, reduced running costs, and growing domestic manufacturing are key economic enablers of this transition, while achieving price parity between electric vehicles and traditional internal combustion engine (ICE) vehicles remains central to driving mass adoption.

Importance of Price Parity

The upfront cost difference between EVs and ICE vehicles, primarily due to high battery prices, is one of the major roadblocks to the former’s widespread adoption. EVs remain ₹2-3 lakh more expensive upfront than ICE equivalents in the ₹6-10 lakh entry-level car segment, widened by recent GST cuts on ICE from 28 percent to 18 percent. However, over the vehicle lifecycle, EVs offer significant cost advantages due to lower energy and maintenance expenses. Reportedly, the price gap needs to narrow to 20-25 percent from the current 30-50 percent for EVs to reach the inflection point and surge 7-9x by decade-end. Running costs for electric two- and three-wheelers are substantially lower because of cheaper electricity relative to petrol and diesel, along with reduced servicing needs owing to fewer mechanical parts and regenerative braking technologies that enhance battery efficiency. These economic benefits make EV ownership more attractive, especially in price-sensitive markets like India, where affordability directly influences consumer choices.​

India’s Market Leadership in Electric Three-Wheelers

India has emerged as the global leader in the electric three-wheeler segment, accounting for around 57 percent of global sales. Three-wheelers are a vital mode of transport in urban and peri-urban India, serving both passenger and goods transport needs. Electric three-wheeler sales hit 430,846 units from January to July 2025, with July alone recording a record 69,145 units and a 62 percent market share. Their electrification offers a direct route to reducing urban pollution and carbon emissions. Local innovation in vehicle design and battery technology, supported by the government’s push for manufacturing and assembly under initiatives like the Production-Linked Incentive (PLI) scheme, has strengthened India's position in this segment. The production ecosystem benefits from domestic suppliers, promoting cost efficiencies and supply chain resilience. India’s success in electric three-wheelers demonstrates its capability to lead global EV adoption by tailoring solutions to local market needs and driving economies of scale.​

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Government Policy Push and Incentives

The original FAME scheme (launched in 2015 and expanded under FAME II) focused on incentivizing electric two-wheelers, three-wheelers, buses, and cars through subsidies and developing charging infrastructure. This policy laid the groundwork for India's EV market, particularly boosting the adoption of electric two- and three-wheelers, which constitute a large part of India’s transportation ecosystem. Building on this momentum, the government launched the PM E-DRIVE scheme in 2024 with a budget allocation of over INR 10,900 crore (approximately $1.3 billion), which enhances incentives with a more targeted approach. The PM E-DRIVE scheme offers demand incentives for electric two- and three-wheelers, ambulances and trucks, and has expanded to support charging infrastructure across 88,500 locations nationwide. Subsidies under this scheme include INR 10,000 per electric two-wheeler and INR 50,000 per electric three-wheeler, gradually reducing in future financial years to encourage market-driven growth.​

Infrastructure and Ecosystem Development

The PM E-DRIVE scheme is driving EV charging network expansion, with an emphasis on urban and semi-urban areas to address range anxiety and encourage consumer confidence. To make EV ecosystems sustainable and cost-effective, the Integration of charging stations with renewable energy sources and smart grid technologies is key. Government and private sector collaboration is fostering innovations like battery swapping and fast charging that cater to the unique usage patterns of two- and three-wheelers. These developments underpin a sustainable, scalable EV ecosystem capable of supporting India’s ambitious electrification targets.

The Road Ahead

For India to become a global leader in EV adoption, a comprehensive economic strategy is the need of the hour that encompasses strong policy frameworks, financial incentives and infrastructure development. The synergy between public subsidies, lower operational costs, and growth in domestic manufacturing creates a compelling economic case for EV adoption. With the declining battery prices and promising infrastructure expansion, India is poised not only to accelerate its transition to clean transportation and eventually shape global EV markets through scalable solutions.