Electric Vehicle Registrations Surpass 1 Million in H1 FY26; E-PV Sales Decline in September Due to GST Rate Adjustments
Registrations of electric vehicles (EVs) in India showed a mixed trend in September 2025, with a slight decline in month-on-month figures despite surpassing one million units in overall registrations for the first half of the fiscal year. According to Vahan data, battery-powered vehicle registrations fell to 182,000 units, a 3% decrease from August’s 188,000 units. This downturn was primarily driven by a significant drop in electric passenger vehicle sales, raising concerns among industry analysts about the impact of recent tax changes on consumer preferences.
Overall EV Registrations and Quarterly Trends
In the first half of the fiscal year 2026, total electric vehicle registrations exceeded one million units, marking an increase from 895,000 units during the same period last year. However, the month of September saw a decline in registrations, with 182,000 battery-powered vehicles recorded, down from 188,000 in August. Despite this monthly dip, the quarterly figures for the second quarter of FY26 showed improvement, with 570,000 units registered compared to 533,000 units in the first quarter. This indicates a growing trend in overall EV adoption, although the recent monthly decline raises questions about sustainability.
Decline in Electric Passenger Vehicle Sales
The electric passenger vehicle segment experienced a notable downturn in September, with registrations plummeting to 15,100 units from 18,290 units in August. Analysts attribute this decline to recent reductions in Goods and Services Tax (GST) rates for internal combustion engine (ICE) vehicles, which have created a wider price gap between ICE vehicles and EVs. The GST for ICE vehicles was cut from 28% to 18%, while hybrids saw a reduction from 43% to 40%. In contrast, the GST rate for electric vehicles remains unchanged at 5%. This shift has led to a decrease in EV penetration in the passenger vehicle segment, dropping from nearly 5% to about 4%, according to Puneet Gupta, director at S&P Global Mobility.
Impact on Two-Wheeler and Three-Wheeler Segments
Unlike the electric passenger vehicle market, the two-wheeler and three-wheeler segments have remained largely unaffected by the recent GST changes. In September, electric two-wheeler registrations were nearly flat at 104,000 units, compared to 105,000 units in August. The electric three-wheeler category recorded 61,000 units, down slightly from 63,500 units the previous month. In the two-wheeler market, TVS Motor led with 22,491 registrations, although this was a decrease from 24,282 in August. Bajaj Auto saw a significant increase, rising to 19,554 units from 11,822. Ather Energy followed closely with 18,122 units, while Ola Electric experienced a sharp decline to 13,374 units from 19,020.
Future Outlook for Electric Vehicle Sales
Industry experts are closely monitoring the situation to determine whether the decline in passenger EV sales in September is a temporary setback or indicative of a more prolonged slowdown. The recent GST cuts have shifted consumer preferences, particularly among price-sensitive buyers, leading to increased interest in ICE vehicles. Poonam Upadhyay, director at Crisil Ratings, emphasized the need for the industry to enhance EV adoption through improved charging infrastructure, financing options, and better total cost-of-ownership benefits. The coming months will be crucial in assessing the long-term impact of these policy changes on the electric vehicle market in India.
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