The electric vehicle (EV) market in India is facing a slowdown, with registrations declining due to reduced government subsidies and increasing prices. According to data from Vahan, EV registrations dropped to 67,407 units in CY2024, after rising sharply in 2023 to 73,299 units. In 2025, the trend has continued, with registrations decreasing month-on-month.
Experts blame the decline on the imposition of taxes on EVs by state governments, which has led to price increases. The Indian government has set a target of 30% EV penetration by 2030, but currently, the penetration is only around 2%. The Federation of Automobile Dealers Association recommends that the government should continue the subsidy program to boost EV adoption.
The Maharashtra state government’s decision to impose a 6% tax on premium electric vehicles priced at ₹30 lakh from April is expected to lead to an increase in on-road prices, which may offset the decline in battery prices. Meanwhile, industry experts like Nikhil Dhaka, Vice President of Primus Partners, and Manish Raj Singhania, Chairman of Research & Academy, Federation of Automobile Dealers Association, believe that continuing the subsidy will help increase EV penetration across the country.
The market is currently experiencing a slowdown, with only 4,117 vehicles registered in January, 2,665 in February, and 1,720 in March. Nomura predicts that EV penetration will reach 9% by FY30, while ICRA Limited expects it to reach 5% by FY27. The government’s ambitious target of 30% EV penetration by 2030 may be challenging to achieve if the current trend continues.