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India's EV Market Booms, CAGR at 63%

  //automotive-transportation.news-articles.net/co .. 26/01/29/india-s-ev-market-booms-cagr-at-63.html
  Published in Automotive and Transportation on Thursday, January 29th 2026 at 5:03 GMT by moneycontrol.com
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New Delhi - January 29, 2026 - India is rapidly becoming a key player in the global electric vehicle (EV) market, according to the Economic Survey 2026, presented to Parliament today. The survey reveals a remarkable surge in EV adoption, with registrations nearing 2 million units in fiscal year 2025, fueled by a consistent compound annual growth rate (CAGR) of 63% over the last six years. This indicates a dramatic shift in consumer preferences and a growing commitment to sustainable transportation.

The impressive growth isn't simply a statistical anomaly; it reflects a convergence of factors. Soaring fuel prices have made EVs an increasingly attractive economic alternative, while heightened environmental awareness is driving consumer demand for cleaner transport options. Crucially, the Indian government's proactive policies, most notably the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme, have provided significant impetus by lowering the cost barrier for both manufacturers and consumers.

Beyond Subsidies: A Holistic Ecosystem

The FAME-II scheme, while instrumental, is just one piece of the puzzle. The Economic Survey underscores the need for a holistic ecosystem to sustain this growth trajectory. A central challenge identified is the expansion of charging infrastructure. While the number of EVs on the road is increasing exponentially, the availability of conveniently located and reliable charging stations lags behind. Addressing this 'range anxiety' is critical to encouraging widespread adoption, particularly in Tier 2 and Tier 3 cities where charging infrastructure is currently sparse. The survey suggests a need for public-private partnerships to accelerate the deployment of charging stations across the country, including fast-charging options and standardized charging protocols.

Another vital area for development is battery technology. The performance of EVs is intrinsically linked to battery capabilities - range, charging time, lifespan, and cost. The survey highlights the importance of continued research and development in battery chemistries, with a focus on indigenous battery manufacturing capabilities. Reducing reliance on imports for critical battery components is seen as essential for strengthening the domestic EV supply chain and ensuring price stability. Innovations like solid-state batteries and advancements in lithium-ion technology are expected to play a key role in addressing these challenges.

Skills Gap & Local Manufacturing The Economic Survey also draws attention to the need for a skilled workforce. The rapid expansion of the EV sector requires a pool of trained professionals capable of manufacturing, servicing, and maintaining EVs. This includes not only engineers and technicians but also skilled workers in areas like battery recycling and charging infrastructure installation. Investment in vocational training programs and collaboration between industry and educational institutions is crucial to bridging the skills gap.

Furthermore, the survey stresses the importance of localization of EV components. Currently, a significant portion of EV components are imported, increasing production costs and exposing the Indian market to global supply chain disruptions. Promoting domestic manufacturing of key components - motors, controllers, batteries, and power electronics - will not only reduce import dependence but also create new employment opportunities and foster innovation within the country. Incentives for local manufacturers and policies to attract foreign investment in domestic EV component production are key recommendations.

Future Outlook: Ambitious Targets and Sustainable Growth

The Economic Survey paints an optimistic picture of India's EV future. However, it emphasizes that sustaining the current momentum requires continued commitment from both the government and the private sector. Meeting the nation's ambitious EV targets will necessitate sustained investment in charging infrastructure, ongoing innovation in battery technology, and a concerted effort to develop a skilled workforce. Furthermore, incentivizing domestic manufacturing and reducing reliance on imports are vital to building a resilient and sustainable EV ecosystem. The report suggests that continued policy support, coupled with private sector innovation, could position India as a global leader in the EV revolution, contributing significantly to both economic growth and environmental sustainability.