Ola drags electric two-wheeler growth but cars, SUVs race ahead in 2025

Highlights

• Electric passenger vehicle sales surged nearly 86 per cent in 2025, driven by new SUV-focused launches and sharper pricing, even as e-two-wheeler growth slowed sharply.
• Electric three-wheelers emerged as the clear success story, with almost one in three vehicles now electric, already surpassing the government’s 2030 penetration target.
• Industry experts see 2025 as a potential inflexion point for electric PVs, but caution that achieving 30 per cent penetration by 2030 will require lower battery costs, stronger infrastructure and sustained policy support.

In 2025, around 17 new electric four-wheeler models were launched.

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New Delhi: India’s electric vehicle trajectory has seen some hiccups, with sales growth in electric two-wheelers slowing in calendar 2025 as subsidies dwindled and the erstwhile market leader, Ola Electric, lost steam. But at the same time, electric passenger vehicles flew off the shelves on new launches and pricing initiatives.In the words of Hanif Qureshi, Additional Secretary in the Ministry of Heavy Industries, the ICE car market is like a massive ocean liner. It carries a vast amount of weight and dominates the sea, but its speed fluctuates with the tide. The electric passenger vehicle market, on the other hand, is like a high-speed motorboat, currently much smaller than the ocean liner but accelerating so rapidly that it is quickly narrowing the gap in performance.Qureshi has, in fact, predicted that the ICE market may be plateauing “for the moment” and that the electric PV car market “is still in a phase of rapid upward expansion”. So will 2025 become the inflexion point for India’s PV push, even as e2w growth moderates further?

Many 2025 launches like the Harrier EV, Curvv EV, XUV 3XO EV, and Kia Carens EV target the popular SUV/MPV segments, expanding options beyond hatchbacksRamnath E

Momentum builds through 2025During 2025, electric three-wheelers have already blazed a trail, with nearly every third vehicle now electric.

Qureshi’s comments on electric PV sales came in a LinkedIn post just as data from the Vahan portal showed nearly 86 per cent growth in sales of electric PVs in calendar 2025 versus 2024. What’s more, sales of plug-in hybrid cars and strong hybrid cars have nearly doubled in these 12 months. As per Vahan, sales of electric PVs were at nearly 2.73 lakh as of date, compared to 1.26 lakh in calendar 2024. There are multiple reasons for the electric PV market cheer this year.

Ramnath E, Team Lead (Automotive Advisory) at MarketsandMarkets, says the high double-digit growth has come on the back of new model launches by Tata Motors Passenger Vehicles, Mahindra & Mahindra, BYD, Hyundai Motor India, besides new OEMs such as Tesla and VinFast.

In 2025, around 17 new electric four-wheeler models were launched.

“The launches were more focused towards the SUV segment and family EVs. Many 2025 launches like the Harrier EV, Curvv EV, XUV 3XO EV, and Kia Carens EV target the popular SUV/MPV segments, expanding options beyond hatchbacks,” he said.

New models fuel excitement and bring people to showrooms, raising sales of electrics despite gaps in the charging infrastructure and other teething issues.Hitesh Thakurani, Equity Research Analyst at HDFC Securities, also underlined the comparatively higher sales growth of electric PVs in calendar 2025 versus 2024, adding that “this e-PV push by some manufacturers is keeping in mind the expected CAFE 3 targets, while for some manufacturers it is more about going through the EV learning curve.”

And while 2025 saw an aggressive push by OEMs for electric PVs, the growth rate of electric two-wheelers (e2w) slowed down compared to 2024. Vahan data shows that nearly 12.3 lakh electric two-wheelers were sold till date in 2025, versus 11.1 lakh in 2024, a growth of about 11 per cent.

But in 2024, sales of e2w had jumped up by 34 per cent year on year, so the growth rate in 2025 has declined by two-thirds. Thakurani said that there was “only a small increase in e-2W penetration in calendar 2025. This is largely due to a reduction in subsidies and a fall in Ola Electric‘s volumes. Ex of Ola, the e2W industry has grown faster this year versus last.”

The Ola story has been faltering for months now, as servicing complaints have continued to rise and the company’s vehicle registrations have continued to shrink. While Ola has taken many corrective steps to reduce the service backlog – including opening up spare parts to public access and allowing third-party garages to service its vehicles – the company does not appear to be getting back to its number one position in the market anytime soon.

In any case, the reduction in the prices of ICE two-wheelers due to the GST rate rationalisation during the 2025 festive season was also a major reason for the decline in e2w sales growth in the year.

In 2025 versus 2024, there has been a lot of optimism and investments on the ground by PV OEMs, the electric ecosystem has started moving in the right direction, but achieving 30 per cent penetration by 2030 looks very stretchedPuneet Gupta

What 2026 holds next

So what will 2026 look like for India’s EV march? Niti Aayog had set a target of 30 per cent overall electric vehicle penetration in the domestic market by 2030. The three-wheeler segment has already breached this target; two-wheelers are moving towards it at some pace, but for electric PVs, it still looks like a long shot. Never mind the optimism and growth seen in 2025.

Puneet Gupta, Director, India and ASEAN Automotive Market at S&P, said his estimate is 17.5 per cent electric penetration in passenger vehicles by 2030. “A 30 per cent EV penetration is the vision of the government. It gives direction to the industry. In 2025 versus 2024, there has been a lot of optimism and investments on the ground by PV OEMs, the electric ecosystem has started moving in the right direction, but achieving 30 per cent penetration by 2030 looks very stretched.”

Gupta says globally, when the PV market reaches 4 per cent electric penetration, it usually becomes an inflexion point, and this is where we are in India right now. There are multiple reasons for the inflexion point: consumers start seeing more EVs on the road at this juncture, there is better word-of-mouth about electrics, the OEM ecosystem starts building up as more component suppliers come up, and multiple new models come into the market.

Thakurani of HDFC Securities says that globally, EV penetration has pulled back, leading to further overcapacity at battery cell manufacturers, which could result in softer battery cell prices over the medium term.

“The goal of 30 per cent EV penetration will be guided by improving cost structure from lower cell prices and scale benefits, improving charging infrastructure, increasing industry portfolio size covering more price points, and supportive centre and state policies,” Thakurani stated.