What to Expect from India’s EV Industry in 2025 Key Growth Areas and Emerging Challenges
The Indian electric vehicle (EV) industry has faced some hurdles in 2024, with a noticeable dip in funding, falling to $586 million from $808 million in 2023. However, despite these challenges, industry leaders are optimistic about 2025, anticipating that advances in battery technology, better charging infrastructure, and robust government policies will propel the sector forward.
While EV sales grew by 24.5% in 2024, reaching over 1.9 million units, the growth rate was slower compared to the 50% increase seen between 2022 and 2023. The introduction of the PM E-Drive Scheme, which replaces the FAME-II program, introduced subsidies for electric two-wheelers based on battery power, setting the stage for gradual changes in the market. While these numbers indicate progress, the sector is focused on what’s to come in the next year.
Industry experts have shared their thoughts on what lies ahead. Nitin Kapoor, Managing Director of SAERA Electric Auto Ltd, sees 2025 as a pivotal year, driven by advances in battery technology and global policy support. He predicts a significant surge in demand for electric three-wheelers and cargo vehicles, alongside deeper collaboration within the EV ecosystem. “The collaboration will help foster innovation, accessibility, and sustainability,” he says, emphasising the need for an integrated approach to accelerate EV adoption. Cybersecurity challenges are also a priority. As electric vehicles become more connected, Neehar Pathare, MD of 63SATS, highlights the need for proactive measures against vulnerabilities in chargers and autonomous systems. The adoption of international cybersecurity standards, like UNECE WP.29, will be key to addressing these risks. The expansion of green finance, especially in tier-2 and tier-3 cities, is another significant expectation. Nehal Gupta, Founder of AMU, notes that with a projected compound annual growth rate (CAGR) of 30% for 2025, digital financing platforms and battery analytics will make EVs more affordable and accessible to a larger population. This is expected to help bridge the gap for those in smaller cities, further boosting market growth.
Ajay Rao, CEO of Emiza, believes that the logistics sector will play a crucial role in the adoption of electric vehicles. “Advancements in battery technology and sustainability demands will accelerate EV adoption in logistics, helping to streamline last-mile delivery and reduce operational costs.”
As the EV sector looks to 2025, innovations are expected to focus on energy storage and delivery systems. Deepak Pahwa, Chairman of Bry-Air, stresses the importance of advancements in Li-ion and solid-state batteries to overcome current challenges like range anxiety, one of the primary concerns for consumers. With improved battery efficiency, the range and performance of EVs will enhance, making them a more viable option for daily use. Furthermore, the growing popularity of the Vehicle-as-a-Service (VaaS) and Battery-as-a-Service (BaaS) models could drive substantial progress in the sector. Ashish Bagadia from BDO India sees this as a key trend for 2025, as these services help reduce the upfront cost of EVs and batteries, making them more accessible to consumers. The electric two-wheeler market has already shown remarkable growth, with sales skyrocketing from 45,000 units in FY 2021 to nearly 950,000 units in FY 2024. Samarth Kholkar, CEO of BLive, predicts that by 2025, electric two-wheelers will redefine mobility in India. With nearly 30% of new vehicles in 2024 being electric, and the quick-commerce sector expanding rapidly, the demand for EVs, particularly for last-mile delivery, will continue to rise.
The combination of growing investments, improved policies, and technological breakthroughs will likely set the stage for significant change in India’s EV market. If the sector can overcome the challenges of scaling infrastructure and ensuring cybersecurity, India could see its EV industry thrive in the years ahead.
