Fuel price hikes power India's EV boom; registrations surge 70% despite lower subsidies: Bernstein - Moneycontrol.com

Published 4 June 2026 · india

Total EV registrations crossed 190,000 in May, while electric passenger vehicle sales hit a record 26,000 units as rising petrol, diesel and CNG prices strengthened

Total EV registrations crossed 190,000 in May, while electric passenger vehicle sales hit a record 26,000 units as rising petrol, diesel and CNG prices strengthened the economic case for EV adoption. Fuel-price hikes power India's EV boom; registrations surge 70% despite lower subsidies: Bernstein India's EV registrations rose 70% in May, topping 190,000 units Fuel price hikes drove EV demand more than government incentives Electric two-wheeler sales hit 167,000 units, up 66% year-on-year Did our AI summary help? India's electric vehicle market accelerated sharply in May, with total retail EV registrations crossing 190,000 units, up 70% year-on-year, as higher fuel prices emerged as a stronger demand driver than government incentives, according to Bernstein. The brokerage said the single biggest catalyst for the surge was the increase in petrol, diesel and CNG prices by oil marketing companies in the second half of May (the first such hike in four years) following geopolitical tensions in West Asia.

The impact was immediate. According to Bernstein, electric passenger vehicle sales in the first half of May stood at around 10,300 units, but surged to nearly 16,000 units in the second half of the month after fuel prices were raised, highlighting how total cost of ownership considerations are increasingly influencing buying decisions. "The data is unambiguous," Bernstein said, adding that the latest sales trend suggests the economics of EV ownership have become the most effective sales tool for the industry. The electric two-wheeler segment remained the largest contributor to overall volumes, recording around 167,000 units in May, a 66% increase from a year earlier. Electric two-wheelers now account for 8.9% of the overall two-wheeler market, up from 6.7% in January this year. The passenger EV segment posted even stronger growth. Electric four-wheeler sales touched a fresh all-time high of about 26,000 units during the month, nearly doubling from a year ago with 98% growth.

The milestone was driven by strong performances from domestic manufacturers, with Tata Motors crossing 10,000 monthly retail EV sales for the first time and Mahindra & Mahindra exceeding 6,000 units for the first time. Importantly, Bernstein noted that the latest growth appears to be driven by market demand rather than government support. The brokerage pointed out that benefits under the PM E-Drive scheme were reduced after March, yet EV sales continued to scale higher. This suggests that the cost advantage of electric vehicles over internal combustion engine vehicles is becoming sufficiently compelling to sustain demand even with lower subsidy support. "May's demand appears organic, not subsidy-induced," Bernstein said, arguing that the total-cost-of-ownership crossover between EVs and conventional vehicles is increasingly becoming a reality in urban India. The report also highlighted early signs of recovery at Ola Electric after a difficult start to the year. The company, whose monthly registrations had fallen to around 4,000 units in February, saw volumes recover to roughly 15,000 units in May.