India EV Sales May Jump 12-fold To 30 Million Units By 2032: IESA Report Explains Why

India's electric vehicle (EV) market could witness unprecedented expansion over the next several years, with annual sales projected to increase nearly 12-fold to 30.4 million units by 2032 under the high-growth National EV (NEV) Target scenario, according to a report by the India Energy Storage Alliance (IESA), prepared by Customized Energy Solutions.

The report estimates that annual EV sales will rise from 2.0 million units in 2024 to 2.6 million units in 2025, marking an approximate 26 per cent increase. The steady rise reflects growing consumer acceptance, expanding product choices and continued policy support for electric mobility.

What is driving India's EV growth?

According to the report, higher fuel prices are making electric vehicles more cost-competitive, while the growing range of sports utility vehicles (SUVs) and a wave of new EV launches are improving consumer appeal and expanding market visibility.

The report also highlights that EVs accounted for around 9.5 per cent of total vehicle sales in India in 2025, up from 8.1 per cent in 2024. This increase signals a continuing structural shift towards vehicle electrification across the country.

Which EV segments are leading the market?

Electric two-wheelers remained the biggest contributor to India's EV sales in 2025, accounting for 60.1 per cent of the market. Electric three-wheelers followed with a 31.6 per cent share.

Together, these two categories contributed more than 91 per cent of the nearly 2.5 million EVs sold during the year.

Electric four-wheelers continued to gain momentum, increasing their share to 7.7 per cent as more consumers adopted electric passenger vehicles. Electric buses represented 0.2 per cent of total sales, while electric trucks accounted for 0.4 per cent, supported by government procurement initiatives and fleet operators shifting towards cleaner transport.

Why battery demand is expected to surge

The rapid rise in EV adoption is also expected to transform India's battery market.

"In parallel, battery demand is expected to scale sharply, driven both by rising EV adoption and increasing average battery pack sizes, with total demand growing from 19 GWh to 362 GWh over the same period," the report added. "The widening gap between BAU and NEV scenarios post-2029 underscores that India's EV trajectory will ultimately be determined by the strength of policy support, the pace of infrastructure buildout, and the momentum in local manufacturing."

Battery demand reached around 19 GWh in 2025, up significantly from 13 GWh in 2024, reflecting both higher EV sales and larger battery packs across vehicle categories.

Which vehicles consume the most batteries?

A major shift has taken place in battery consumption patterns.

Electric four-wheelers now account for 40 per cent of total battery demand, making them the largest consumers despite representing a much smaller share of overall EV sales.

Electric three-wheelers contribute 27 per cent of battery demand, followed by electric two-wheelers at 23 per cent.

Electric buses account for 7.8 per cent of battery demand despite their limited sales volume because of their significantly larger battery packs. Electric trucks currently account for 1.9 per cent as adoption gradually expands across light, medium and heavy commercial vehicle segments.

How big is the EV components opportunity?

India's electric vehicle component market was valued at Rs 41,000 crore in 2025 and is projected to reach Rs 3,02,000 crore by 2032 under the Business-as-Usual (BAU) scenario, representing a compound annual growth rate of about 38 per cent.

Battery packs dominate the market with a 52 per cent share, followed by motors at 22 per cent, inverters at 12 per cent, battery management systems (BMS) at 11 per cent and DC-DC converters at 3 per cent.

Where does India still face challenges?

While EV adoption is accelerating, localisation of key components remains a major challenge.

The report noted that "India's motor and controller localization remains at 30-40%, inverter supply chains are heavily import-dependent, and BMS hardware localization lags well behind software capability."

It further stated, "The Rs 2,61,000 Cr incremental market being created between 2025 and 2032 will disproportionately reward players who establish domestic manufacturing depth in power electronics and drivetrain integration ahead of the demand inflection."

The findings suggest that while consumer demand for EVs is expected to grow rapidly, India's long-term success in the sector will depend on strengthening domestic manufacturing, expanding charging infrastructure and sustaining supportive government policies.

(With inputs from ANI)