New Delhi: India’s electric vehicle (EV) market witnessed a significant rise in demand during May 2026, as increasing petrol and diesel prices encouraged consumers to switch to battery-powered alternatives, according to reports released by brokerage firms Nomura and HSBC.
Nomura reported that electric passenger vehicles accounted for 6.4 per cent of total passenger vehicle sales in May, compared to 4 per cent in FY26. Electric two-wheelers also gained momentum, capturing 8.9 per cent of overall two-wheeler sales, up from approximately 6.5 per cent last year.
The brokerage noted that consumer sentiment has increasingly shifted in favour of electric mobility, with demand continuing to gain traction across vehicle segments.
Echoing similar views, HSBC stated that recent fuel price hikes have prompted more customers to consider purchasing electric vehicles. The firm estimated electric two-wheeler penetration at 9.3 per cent and electric passenger vehicle penetration at 6.6 per cent during May.
Among automobile manufacturers, Tata Motors emerged as a key beneficiary of the growing EV adoption trend. The company recorded an 85 per cent year-on-year increase in electric vehicle sales, while EV bookings have risen 2.5 times over the past two months.
Nomura highlighted particularly strong demand for Tata Motors’ electric vehicles priced below Rs 15 lakh. To meet rising demand, the company plans to expand its monthly EV production capacity from 10,000 units to 15,000 units.
The growth trend was even more pronounced in the electric two-wheeler segment. TVS Motor retained its position as the market leader with approximately 42,000 electric scooter registrations in May. Bajaj Auto and Ather Energy followed closely behind.
Ather Energy posted more than double the sales recorded during the same period last year, helping the company increase its market share to 16.5 per cent, according to Nomura.
Despite concerns over rising commodity costs, both brokerage firms remain optimistic about the sector’s prospects. Nomura stated that electric vehicles are currently at an “inflection point” in India, supported by favourable government policies and growing consumer acceptance.
Fuel prices have emerged as a major factor driving EV adoption. Oil marketing companies increased petrol and diesel prices by nearly Rs 8 per litre over a two-week period in April. Meanwhile, the Indian crude oil basket remained above $100 per barrel for three consecutive months through May due to the prolonged Middle East crisis and disruptions in the Strait of Hormuz, a key route handling nearly 20 per cent of global oil and gas exports.
The continuing uncertainty surrounding peace negotiations between the United States and Iran, coupled with repeated ceasefire violations, has further heightened concerns about potential increases in global oil prices.
Industry observers note that while Indian oil marketing companies continue to absorb substantial losses—estimated at around Rs 550 crore per day—to shield consumers from the full impact of rising crude prices, the shift towards electric mobility is expected to accelerate if fuel costs remain elevated.
With stronger policy support, expanding charging infrastructure and rising consumer awareness, India’s electric vehicle sector appears poised for sustained growth in the coming years.
