Why did India's electric vehicle market share decline in 2025?

The market share of electric vehicles in two-wheelers and passenger cars slowed in 2025 due to a GST cut on petrol and diesel vehicles, making them more competitive.

Which segment of India's EV market showed strong growth in 2025?

Electric three-wheelers demonstrated significant improvement in penetration and sales volume in India during 2025.

What did automakers do to address the EV sales slowdown in India in 2025?

Automakers offered year-end discounts on electric vehicles to counteract slower demand following the GST reduction on traditional fuel vehicles.

Home / Business and Economy / EV Sales Dip: GST Cut Boosts Petrol Cars in 2025

EV Sales Dip: GST Cut Boosts Petrol Cars in 2025

2 Jan

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Summary

GST cut on petrol/diesel vehicles slowed EV market share in 2025.
Electric three-wheelers saw significant penetration improvement.
Automakers offered year-end discounts to offset declining EV demand.

EV Sales Dip: GST Cut Boosts Petrol Cars in 2025

The Indian electric vehicle market saw its momentum tempered in 2025, particularly in the two-wheeler and passenger car segments. A government-initiated Goods and Services Tax (GST) reduction on petrol and diesel vehicles, effective from October 2025, significantly narrowed the price gap with electric alternatives. This made conventional fuel vehicles more attractive, leading to a surge in their sales during the final quarter of 2025 and consequently impacting EV market share.

The electric three-wheeler segment, however, emerged as a strong performer, demonstrating consistent improvement in market penetration throughout 2025. While overall EV volumes still grew by 16% year-on-year to 2.27 million units in 2025, the slowdown in passenger and two-wheeler EV adoption was evident, with their market share softening in the latter part of the year.