Data released by the country’s top dealers body, Federation of Automobile Dealers Associations (Fada) on Friday showed that the total share of EVs—across scooters, bikes and cars—fell to its lowest level in the current financial year.
The share of electric two-wheelers dropped to 4.56% in October from 8.09% in September, while electric four-wheelers fell to 3.24% from 5.12%. These are the lowest levels in months—last seen at around 4% for two-wheelers in April 2024 and 3% for four-wheelers in February 2025.
Conversely, the share of conventional fuel or ICE (internal combustion engine) vehicles increased sharply in October compared to September—from 91.71% to 95.31% for two-wheelers, and from 65.61% to 68.1% for four-wheelers.
In September, the GST Council cut taxes for ICE two-wheelers and four-wheelers from 28% to 18% for many categories. However, EVs, which were already taxed at a low 5%, were left untouched. That decision also narrowed the price gap between EVs and ICE vehicles significantly.
Apart from passing on the GST rate cuts, leading automobile companies topped that with additional festive season discounts between Navratri and Diwali, making a strong case for buyers to opt for these vehicles.
What experts are saying
Analysts suggest that the GST cuts for ICE vehicles came as an additional problem for EV makers, which were already reeling from the rare earth magnet crisis.
“Consumer interest in EVs has softened following the latest GST revision, which narrowed the price gap between ICE vehicles and EVs, sparking increased sales of traditional ICE products during the festive season,” analysts at global equity research firm Bernstein wrote in a 6 November note.
“In addition, production at several OEMs was impacted by rare earth supply constraints. In response, most manufacturers have begun transitioning to motors utilizing ferrite-based designs rather than rare earth magnets, improving supply resilience,” the note added.
However, Fada president C.S. Vigneshwar told Mint that any assessment has to wait for a few months. “We should wait for the trend to stabilise in the coming months before drawing any conclusion on the numbers for EVs,” he said.
Another nuance came from Ashim Sharma, senior partner and group head at Nomura Research Institute. He said the GST cuts broadened the base by bringing in consumers in the small cars and entry-level motorcycle segments.
“EVs still grew, but their share went down as the base deepened with a much faster growth in the entry level segments in both cars and bike segments,” he said. “We hardly have any EVs in those segments so this is a consumer who was on the fence to either purchase an entry-level vehicle or not.”
Like Vigneshwar, Sharma, too, noted that the trend may just stabilise in the coming months, adding that EVs may have to match the growth in entry-level ICE segments to ensure that penetration doesn’t go down if the demand boost sustains.
Meanwhile, the EV industry is unruffled. Tarun Mehta, co-founder and chief executive of listed electric two-wheeler maker Ather Energy, remained unperturbed about GST cuts as he believed EVs have a long term value to offer. In an interview with Mint in August, he said EVs have fundamental strengths that will ensure the category keeps growing.
“It has enough true consumer value; its riding is better, its performance is better and it requires lesser maintenance,” Mehta said. “And its total cost of ownership (TCO) is so much better. Like even if costs of petrol vehicles were to come down by 10% with the current GST, it wouldn’t matter.”
The growth rates
Notably, overall passenger vehicles and two-wheelers—including both ICE and EV models—saw record sales last month, according to Fada’s data. Two-wheeler sales in October surged 52% year-on-year (y-o-y) to reach 3.15 million units, while passenger vehicle sales rose a more ‘modest’ 11% to reach 557,373 units in the same period.
In the electric segment, two-wheeler sales grew 6% y-o-y in October to 147,728 units, while four-wheelers rose 58% to 18,059 units, albeit on a low base. For electric two wheelers, this is the slowest growth since July’s 4%, and for electric four wheelers, the weakest since May’s 53%, Fada data showed.
ICE two wheelers saw a 55% surge to 3.02 million while ICE four wheelers saw a 10% surge to 539,314 units during the same month, Fada data showed.
Even though EV sales continued to rise in absolute numbers, their overall penetration remains closely watched—especially as India works toward its goal of 30% EV penetration by 2030.
Ola Electric, which was the country’s largest seller of two wheelers in financial year 2025, noted during its earnings commentary on Thursday that the electric two-wheeler industry has to contend with a slowdown as the sector is consolidating.
“In the recently concluded festive season, sales were flat year-on-year. We see this as a healthy transition phase before the next wave of mainstream adoption, driven by value-conscious consumers recognising the superior performance and lower cost of EV ownership,” Bhavish Aggarwal, chairman and managing director at Ola Electric, said in his letter to shareholders.
In the coming months, several EVs are lined up for launch, starting with Mahindra & Mahindra’s seven-seater EV this month, followed by Maruti Suzuki’s first EV for India—the e-Vitara—in December.
