India’s electric vehicle (EV) market experienced a boost in demand in May this year, driven by escalating fuel costs that prompted more consumers to opt for battery-powered alternatives. Nomura reported that EV sales constituted 6.4% of passenger vehicle sales in May, up from 4% in FY26, with electric two-wheelers representing 8.9% of sales, an increase from approximately 6.5% last year. The trend towards EVs is gaining momentum, reflecting a shift in consumer preference.
HSBC also noted a similar trend, attributing the rise in demand for electric vehicles to recent fuel price hikes. The report indicated that electric two-wheelers accounted for 9.3% of sales and electric passenger vehicles for 6.6% in May. The surge in interest towards EVs is evident across various segments of the market.
Tata Motors emerged as a significant beneficiary among car manufacturers, witnessing an 85% year-on-year growth in EV sales. The company’s EV bookings have surged by 2.5 times over the past two months, indicating a substantial increase in consumer interest. Tata Motors is focusing on expanding its EV production capacity to meet the escalating demand, particularly in the segment priced below Rs 15 lakh.
In the two-wheeler sector, TVS Motor led the market with approximately 42,000 electric scooter registrations in May, followed by Bajaj Auto and Ather Energy. Ather Energy experienced a notable growth with sales more than doubling year-on-year, leading to a market share of 16.5%, as per the Nomura report. The shift towards electric two-wheelers is becoming increasingly prominent in the market.
Despite concerns regarding rising commodity costs, the demand for electric vehicles continues to gather pace. Both Nomura and HSBC believe that EVs are reaching a crucial turning point in the Indian market, supported by favorable policies and growing consumer acceptance. The market dynamics are evolving in favor of electric mobility solutions, reflecting a broader trend towards sustainable transportation alternatives.
