Chennai: India retained its position as the world’s second-largest electric two-wheeler market in 2025 after China, amid single-digit growth, as reduced subsidies and tighter localisation requirements weighed on demand, according to the latest Global EV Outlook report by the International Energy Agency.Global electric two-wheeler sales rose 15% year-on-year to nearly 10mn units in 2025, accounting for about 14% of worldwide two-wheeler sales. China remained dominant, with sales surpassing 7mn units and electric models accounting for more than 55% of the country’s two-wheeler market. Chinese electric two-wheeler sales grew 10% during the year.India’s electric two-wheeler sales, by contrast, expanded at a far slower pace. Sales rose to about 1.3mn units in 2025, representing roughly 6% of total domestic two-wheeler sales, the report said.Under the earlier FAME-II scheme, electric two-wheelers were eligible for subsidies of up to $170 per kWh, covering up to 40% of vehicle costs. Under PM E-DRIVE, incentives were cut to $57 per kWh, capped at $115 per vehicle in FY25, before being reduced further to below $30 per kWh and capped at $57 per vehicle in FY26.Moreover, the new scheme introduced local content requirements that are costly for some OEMs to meet, reducing the number of models eligible for subsidies. Also, the reduction in GST for ICE two-wheelers weakened the purchase-price competitiveness of battery-powered vehicles.India nevertheless consolidated its lead in electric three-wheelers, remaining the world’s largest market in the segment. More than two-thirds of all three-wheelers sold in the country in 2025 were electric.Globally, three-wheeler sales fell 16% to about 4.5mn units in 2025, while electric three-wheeler sales climbed to more than 1.2mn units, taking their market share above 25%. China, India and Türkiye together accounted for more than 95% of global electric three-wheeler sales.In electric buses, India ranked as the world’s third-largest market for a second consecutive year, with sales crossing 4,000 units for the first time in 2025. The increase was supported by large-scale public procurement programmes, including PM E-DRIVE, the report said.
