India’s electric vehicle (EV) market could be approaching a turning point, with improving affordability, wider product choice and rising fuel costs supporting adoption across vehicle segments, according to a research report by Nomura dated October 12. The brokerage estimates that electric passenger vehicles accounted for 7.9% of industry retail sales in September 2026, up from 4% in FY26. Electric two-wheeler penetration rose to 11.6% from 6.5% over the same period.
The economics of owning an EV have also improved. Nomura estimates that an electric scooter can recover its higher upfront cost against a petrol alternative in around 2.4 years. For electric cars, the break-even period has fallen to approximately three years for compact SUVs, 2.5 years for mid-size SUVs and two years for large SUVs.
Higher fuel prices could accelerate adoption
Petrol, diesel and CNG prices have risen 8%, 9% and 13%, respectively, since December 2025, the report said. If Brent crude sustains at around $103 per barrel, petrol and diesel prices may need to increase by approximately ₹5–7 per litre, based on Nomura’s assumptions on refining costs and oil marketing company margins.
Further fuel-price increases could strengthen the cost advantage of electric vehicles, the brokerage said. State-level incentives, including road-tax exemptions and registration benefits, are also supporting adoption. Delhi, Telangana and Odisha led passenger EV penetration in September at 21.9%, 21% and 17%, respectively. In electric two-wheelers, Odisha topped the list at 23%, followed by Karnataka at 19.3% and Goa at 17.5%.
Passenger EV sales seen at 803,000 units by FY30
Nomura projects electric passenger-vehicle sales to rise to 803,000 units in FY30 from 185,000 in FY26, taking penetration to 12.7% from 3.9%. Electric two-wheeler sales could increase to 6.4 million units from 1.47 million over the same period, lifting penetration to 22% from 6.6%. Electric three-wheeler penetration is forecast to reach 70% by FY30.
The premium vehicle market is already reflecting the shift. BMW India is getting around 30% of its bookings from EVs, resulting in waiting periods of two to three months, according to the report.
Automakers face growing pressure to expand EV portfolios
Nomura expects automakers with competitive electric models and established EV technology to outperform the broader industry in the second half of FY27 and FY28. Manufacturers with portfolios concentrated on internal combustion engine vehicles could face increasing market-share pressure as adoption rises.
The brokerage firm favours Ather Energy, Mahindra & Mahindra and Hyundai Motor India among automakers positioned to benefit from the transition. It also expects auto-component suppliers to gain from higher EV price points and scope to increase component content.