Why Is India’s EV Growth Still In Slow Lane? Market Trails Global Leaders Despite Rising Interest

Despite steady growth, India’s electric vehicle (EV) adoption continues to lag behind global frontrunners, according to a recent report by Intelsense. The country’s EV sector expanded by 27% year-on-year in FY24 but still falls short of the pace seen in the top 10 global markets for EV penetration, mentions the same report cited by ANI. 

India’s EV share stood at 2–3% of new car sales in 2024, notably lower than the 5% average among the world’s leading nations in the segment. The report places India just outside the global top 10, ranking approximately 11th or 12th, behind countries like Thailand, Vietnam, and Mexico.

However, Intelsense highlights India’s position as the fastest-growing major EV market, indicating strong momentum despite the current gap in adoption rates.

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Two-Wheelers and Three-Wheelers driving volumes 

India’s EV sales reached 1.94 million units in 2024, driven largely by two- and three-wheelers, which dominate the overall market. Brands like Hero Electric, Ola Electric, and TVS continue to lead in these segments, accounting for a significant share of vehicle registrations, as per vahan data. 

In contrast, progress in the four-wheeler and passenger vehicle category has been more subdued. While automakers such as Tata Motors, Hyundai, Mahindra, and MG Motor are active players, the segment has yet to see a breakthrough in terms of widespread adoption or infrastructure readiness. Limited availability of public charging stations and battery-swapping solutions remains a constraint.

Supply chain crisis

The report also mentioned that a key challenge facing India’s EV ecosystem is its high dependency on imports for critical battery components. The country currently relies on China, South Korea, and Japan for nearly 95–100% of its EV battery raw materials, making the supply chain vulnerable to external shocks.

Domestic refining gaining ground

India is also making strides in building domestic refining capacity, as per the same report. In March 2025, Lohum commissioned the country’s first battery-grade lithium refinery with a capacity of 1,000 tonnes per annum (TPA). Similarly, Vardhaan Lithium has partnered with the Maharashtra government to establish a 60,000 TPA facility near Nagpur, aimed at reducing import dependency and boosting local supply chains, as pointed out in the report.