High petrol prices give EV shift fresh charge, Fada sees record adoption

EV penetration across segments touched an all-time high of 11% in May, compared with around 7% for the full FY 2025-26

The rise in conventional fuel prices amid the West Asia crisis appears to be turning into a boon for electric vehicle (EV) sales in India. EV penetration across segments touched an all-time high of 11 per cent in May, compared with around 7 per cent for the full financial year 2025–26 (FY26), the Federation of Automobile Dealers Associations (Fada) said on Monday.

 

This comes as India’s automobile retail sales posted their best-ever May numbers across passenger vehicles (PVs), three-wheelers (3Ws), tractors, and overall registrations, rising 10 per cent year-on-year (Y-o-Y) to 2.53 million units despite concerns stemming from the West Asia conflict.

 

Fuel prices have risen by about ₹7.5 per litre since May 15, as global crude oil prices surged due to the ongoing conflict in West Asia and supply concerns around the Strait of Hormuz. “Because of higher fuel prices, the shift towards EVs increased to over 11 per cent in May compared to 7 per cent in FY26,” said Fada President C S Vigneshwar.

 

In two-wheelers (2Ws), EV share climbed to 9.25 per cent from 6.11 per cent a year ago; in 3Ws, it rose from 61.46 per cent in May 2025 to 64.45 per cent this May; in PVs, from 4.51 per cent to 6.63 per cent; and in commercial vehicles (CVs), from 1.37 per cent to 2.86 per cent. During the month, PV sales rose 23 per cent, tractors 11 per cent, 2Ws 8 per cent, CVs 5 per cent, and 3Ws 4 per cent Y-o-Y.

 

“The sequential softness of 7 per cent versus April reflects the customary seasonal moderation after April and a delayed southwest monsoon, which kept May largely a pre-sowing month across much of rainfed India. That growth held up despite this confluence of pressures underlines the resilience of underlying demand,” said Vigneshwar.

 

PV retails were the clear standout at 402,591 units, marking a robust 23 per cent expansion, with the rural-led nature of the recovery remaining firmly intact. Rural markets grew 30 per cent against 19 per cent growth in urban markets. “Overall alternative fuel share rose to 38 per cent in May, as compressed natural gas share increased to 23 per cent and EV share improved to 7 per cent. Dealers pointed to a revival in small cars alongside sustained demand for sport utility vehicles,” he added.

 

Market leader Maruti Suzuki India recorded a 33 per cent rise in sales to 164,925 units during the period, while Tata Motors grew 39 per cent to 55,544 units and Mahindra & Mahindra rose 10 per cent to 51,311 units.

 

2W retails stood at 1.84 million units in May, up 8 per cent Y-o-Y, with urban markets growing 12 per cent Y-o-Y and rural markets 5 per cent Y-o-Y.

 

Dealers credited steady commuter and rural demand to marriage-season purchases and continued affordability under the GST 2.0 framework, even as heatwave conditions dampened showroom footfall in several markets and selective model-wise supply gaps weighed on momentum. In 2Ws, EV share climbed to 9 per cent from 6 per cent a year ago.

 

CV retails came in at 83,823 units, up 5 per cent Y-o-Y, with rural markets growing 8 per cent Y-o-Y, outpacing urban markets at 2.62 per cent — a sign that goods movement demand is expanding beyond the metros. Tractor sales also rose 11 per cent Y-o-Y to 83,092 units.

 

Looking ahead to June, dealer sentiment remains measured, with 50.52 per cent of dealers expecting growth, 39.9 per cent expecting a flat market, and only 9.59 per cent foreseeing a decline. With the southwest monsoon having set in over Kerala in June and beginning its northward advance, demand expectations are anchored on the progress of the monsoon, early kharif sowing activity, and the tail end of the marriage season, supported by a stable financing environment after the Reserve Bank of India held the repo rate at 5.25 per cent in its June review.