EV penetration may rise to 10-12% of total sales in FY27: Ind-Ra report

Mumbai: India's electric vehicle sector is entering a broader scale-up phase, with EV penetration likely increasing to 10-12 per cent of the overall vehicle sales in this fiscal from 8.5 per cent in the last year, driven by e-two-wheelers, ratings agency Ind-Ra said.

The agency said it expects EV adoption to remain strongest in segments where the economics of electrification are already compelling.

The two-wheeler EV penetration is estimated to increase to 8-10 per cent in FY27 compared to 6.6 per cent in the previous year, supported by lower operating costs, convenient home-charging options, and a growing product portfolio from incumbent automakers, the agency said.


Similarly, electric e-3Ws are expected to remain the most electrified vehicle category, with penetration increasing to 62-65 per cent in FY27 against 59 per cent in the previous year, driven by attractive operating economics for commercial operators and continued government support, Ind-Ra said.

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Electrification in long-distance mobility segments, the ratings agency said, would progress more gradually, as consumers continue to evaluate higher upfront acquisition costs, charging accessibility, and driving-range considerations.

Nonetheless, electric passenger vehicles are likely to record robust growth from a small base, with penetration increasing to 6-8 per cent in FY27, up from 4.4 per cent in the financial year ended March 2026, supported by new model launches.

Adoption is expected to remain concentrated in metropolitan markets and higher-income consumer segments, Ind-Ra said, adding that it expects e-bus penetration to rise to 6-8 per cent in FY27 as against 4.37 per cent in FY26, aided by strong order books and government procurement programmes, although deployment still depends on infrastructure readiness across state transport undertakings.

"India's EV market continues to demonstrate healthy growth potential, with adoption increasingly supported by favourable ownership cost, improving use-case economics, a widening range of vehicle offerings, and rising consumer acceptance.

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" The next phase of India's EV growth will depend on the development of a robust domestic value chain, where India reduces its dependence on imports and strengthens indigenous capabilities across key EV components, particularly batteries and related technologies, alongside expansion of charging infrastructure," said Shruti Saboo, Director, Corporates at Ind-Ra.