Ind-Ra projects India's EV penetration to rise to 10-12% of total vehicle sales in FY27
India Ratings and Research (Ind-Ra) in its latest report has said that India's electric vehicle (EV) market is entering a broader scale-up phase, with EV penetration expected to rise to 10-12 per cent of total vehicle sales in FY27, up from 8.5 per cent in FY26, led primarily by the growing adoption of electric two-wheelers (e-2Ws). The agency expects EV uptake to remain strongest in vehicle segments where the economics of electrification are already compelling.
According to Ind-Ra, electric two-wheeler penetration is projected to increase to 8-10 per cent in FY27, compared with 6.6 per cent in FY26, supported by lower operating costs, convenient home-charging facilities, and an expanding product portfolio from established automakers. Similarly, electric three-wheelers (e-3Ws) are expected to remain the most electrified vehicle segment, with penetration likely to rise to 62-65 per cent in FY27 from 59 per cent in FY26, driven by favourable operating economics for commercial operators and continued government support.
The report noted that electrification in long-distance mobility segments is likely to progress at a slower pace, as consumers continue to weigh higher upfront vehicle costs, charging infrastructure availability, and driving-range concerns. However, the electric passenger vehicle (PV) segment is expected to witness robust growth from a relatively low base, with penetration projected at 6-8 per cent in FY27, up from 4.4 per cent in FY26, supported by new model launches. It added that EV adoption in the passenger vehicle segment will remain concentrated in metropolitan areas and among higher-income consumer segments.
Ind-Ra also expects electric bus penetration to increase to 6-8 per cent in FY27, compared with 4.37 per cent in FY26, aided by strong order pipelines and government procurement programmes, although deployment will continue to depend on infrastructure readiness across state transport undertakings. Overall, it believes India's EV market continues to offer strong growth potential, supported by lower ownership costs, improving use-case economics, a wider range of vehicle options, and increasing consumer acceptance.
