EV sales surge in March on discounts, price hike fears

New Delhi: Electric cars and two-wheelers clocked record monthly sales in March as customers advanced purchases amid aggressive promotions and fears of fuel and vehicle price hikes in FY27.

Electric car registrations – a proxy for retail sales as carmakers report only dispatches to dealers – rose 49 per cent on-year to 19,711 units in March, while those of electric two-wheelers surged 36 per cent to 177,485 units, Vahan portal data on Tuesday showed.

Momentum may Continue

The previous monthly high for electric cars was 19,322 units in January 2026 and that for two-wheelers was 144,378 units in October 2025. Senior company executives said while customers in the two-wheeler segment advanced electric vehicle (EV) purchases apprehending an end to subsidies under PM E-Drive this fiscal, carmakers pushed sales of EVs to meCorporate Average Fuel Efficiency 2 (CAFE-2) norms.

Overall, 196,754 electric cars have been registered in the financial year ending on Tuesday, up 82 per cent over 108,342 EVs sold in FY25. Total electric two-wheeler sales in FY26 grew 20.5 per cent year-on-year to 1.3 million units, according to Vahan data.

Experts attribute the rising adoption of EVs to availability of more models, improving charging infrastructure, and government policies to promote the segment among others. They expect the momentum to continue.

“With a strong pipeline of new EVs slated for release in the year ahead, deep penetration is expected,” said Gaurav Vangaal, associate director, light vehicle production forecasting, India sub-continent, at S&P Global Mobility. “Furthermore, any prolonged conflict in West Asia and resulting crude oil price volatility is expected to positively influence (EV) adoption rates as consumers increasingly view EVs as a resilient alternative.” To be sure, electric cars are poised to dominate the launch portfolio of automakers in the coming months.

Tata Motors is scheduled to introduce the Sierra EV shortly. Also on the cards are three new models from Vietnamese electric carmaker VinFast, an electric SUV each from Toyota Kirloskar Motor (TKM) and Kia India.

New EVs that hit the road recently include Maruti Suzuki e-Vitara, Mahindra XEV 9s, and Tata Punch EV. The share of EVs in new car sales in India currently stand at about 4 per cent.

CAFE-2 Norms

Carmakers are also pushing EVs, fearing steep penalties under CAFE-2. “There is a provision to levy penalties under CAFE-2 on carmakers not meeting norms but it has not been executed yet,” a senior automobile executive who did not wish to be identified said. “If the government were to impose these penalties, carmakers who have larger volumes of diesel vehicles and limited number of EV/CNG cars in their total sales tally will take a huge hit. Penalties will run into hundreds of crores.” The regulation considers the entire fleet sold by each carmaker to calculate average fuel efficiency and emission. So, selling more efficient cars helps offset sales of less-efficient ones.

Carmakers “are scrambling to sell as many EVs as possible before the year-end,” the executive said. Deliberations are underway between the Ministry of Heavy Industries (MHI) and the Ministry of Power (MoP) to devise a mechanism to collect penalties from automakers not meeting CAFE-2 norms effective April 1, 2022, when the norms were implemented, people aware of the matter said.

Incentives

Meanwhile, in a relief to electric two-wheeler makers, the MHI last week said it will continue to provide incentives under PM E-Drive until July 31, 2026. The ministry, though, halved the maximum incentive that can be claimed on an electric two-wheeler (ex-factory price not more than ₹1.5 lakh) to ₹5,000.

Vehicle registrations across categories (internal combustion engine and EV) went up by 12.7 per cent to 29.57 million units in FY26 from 26.23 million units in FY25. The growth rate is better than 6.6 per cent recorded in FY25 and 10.3 per cent in FY24.

The auto industry started the fiscal in the slow lane but picked up speed after the government cut GST rates across vehicles in September, making cars cheaper by up to Rs 1.5 lakh. The GST rate on EVs was kept unchanged at 5 per cent.