Electric car sales in India are expected to surpass 7% penetration by fiscal year 2028.

This projection is contingent on addressing disruptions in rare earth element supply chains, according to a report by CareEdge Advisory.

This growth is anticipated to be fueled by new model launches and government initiatives to expand charging infrastructure.

The report indicates that India’s electric car market has made substantial strides, with sales increasing from over 5,000 units in fiscal year 2021 to more than 107,000 units in fiscal year 2025.

Despite this growth, electric four-wheelers still represent a small fraction of the country’s overall electric vehicle sales.

These sales are primarily dominated by two- and three-wheelers. Both public and private sector efforts have played a role in this expansion.

The number of public EV charging stations in India rose from 5,151 in calendar year 2022 to over 26,000 by early fiscal year 2025, as noted in the report.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ India’s segmented EV growth reveals market-specific adoption patterns

India’s EV market shows a distinct segmentation pattern, with electric three-wheelers leading adoption at over 580,000 units sold in 2023, a 65% increase from 2022, making India the world’s largest market for this segment 1.

This contrasts sharply with four-wheelers, which represented only 1.8% of total vehicle registrations in 2024. Electric two-wheelers and e-rickshaws dominated at 50% and 45% of total EV sales respectively 2.

The disparity reflects India’s unique market conditions where commercial viability drives adoption. Three-wheelers offer compelling economics with lower ownership costs and shorter payback periods due to their high daily utilization rates 1.

This segmented growth suggests that India’s path to electrification differs fundamentally from markets like China, where 50% of new cars sold in 2024 were electric 2. This indicates that policy frameworks need to be tailored to segment-specific barriers rather than applying one-size-fits-all approaches.

2️⃣ Rare earth supply vulnerabilities expose critical gaps in India’s EV strategy

The recent 51% drop in Chinese rare earth magnet exports (April 2025 vs. March) has created an acute vulnerability for global EV manufacturing, with India experiencing a severe 78% decline in imports 3.