Strong EV uptake positions India for next phase of manufacturing growth: Report

New Delhi: India's electric vehicle (EV) market is witnessing a sharp acceleration in adoption, creating significant opportunities for domestic manufacturing, localisation and investment across the battery and electronics value chain, a report said on Wednesday.

According to a report by HSBC Global Investment Research, EV adoption has gathered momentum in recent months, supported initially by oil price uncertainty and increasingly by growing consumer acceptance and network effects.

Rising sales are boosting confidence in the electric mobility ecosystem and strengthening the long-term case for electrification in India, it added.

HSBC believes the next phase of growth will be driven by localisation, scale and technological advancements, with growing demand for batteries, components and energy storage systems creating opportunities for domestic manufacturing and supply-chain development.

The report also highlighted the potential for battery energy storage systems (BESS) to play a key role in supporting India's renewable energy ambitions, with cumulative demand projected to reach 160 GWh by FY29.

Battery imports could rise to 95-100 GWh by FY30 if electric vehicle penetration reaches 15-17 per cent in two-wheelers, passenger vehicles and electric buses, 60 per cent in three-wheelers and 15 per cent in light commercial vehicles, according to the report estimates.

Additionally, India's EV retail sales rose 52.9 per cent year-on-year to an all-time August high of 2,98,448 units in 2026 with overall penetration increasing to 12.3 per cent from 9.5 per cent a year earlier, as per the Federation of Automobile Dealers Associations (FADA) data.

All four EV segments -- two-wheelers, three-wheelers, passenger vehicles and commercial vehicles -- recorded their highest-ever August retail sales.

Electric two-wheeler retail sales grew 67.05 per cent year-on-year to 1,83,204 units in August.

Electric three-wheeler sales rose 25.28 per cent year-on-year to 79,846 units.

The electric commercial vehicle segment emerged as the fastest-growing category with retail sales nearly tripling year-on-year to 4,702 units from 1,631 units in August 2025.

Electric passenger vehicle sales increased 51.89 per cent year-on-year to 30,696 units.

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