India’s EV growth stays robust, but ICE vehicles continue to outpace adoption: BNP Paribas
India’s EV growth stays robust, but ICE vehicles continue to outpace adoption: BNP Paribas
India's electric vehicle market showed robust growth in January 2026, with electric two-wheeler and passenger vehicle registrations rising significantly. However, the faster expansion of internal combustion engine vehicle sales led to a decline in overall EV penetration. Despite this, TVS Motor and Tata Motors maintained strong market positions, while alternative powertrains like CNG gained traction.
EV volumes surge amid ICE boom: BNP Paribas flags penetration risks as two-wheeler, car sales rebound in Jan 2026
India’s electric vehicle (EV) market continued to post strong month-on-month growth across segments in January 2026, but faster expansion in internal combustion engine (ICE) vehicle sales led to a decline in overall EV penetration, according to a BNP Paribas research report.
Key segments
Electric two-wheeler (E2W) registrations rose about 26% month-on-month in January, aided by easing supply constraints, portfolio expansion by OEMs and improving consumer sentiment. However, penetration slipped by nearly 80 basis points to 6.6% as ICE two-wheeler registrations surged more than 40% during the month. TVS Motor strengthened its leadership, expanding market share by around 250 basis points to 28.3%, while Bajaj Auto gained share to about 21%. Ola Electric, meanwhile, saw its share contract sharply to just over 6%.
Passenger vehicles
In electric passenger vehicles (EPVs), registrations increased roughly 23% month-on-month, supported by new launches and wider availability across price points. Yet penetration declined by about 30 basis points to 3.8% as ICE passenger vehicle sales grew faster, rising nearly 36% on the back of fresh model introductions. Tata Motors maintained its dominant position with about 45% market share, while MG Motor emerged as a key gainer, lifting its share to around 26%. Mahindra & Mahindra’s share slipped despite volume growth.
Three-wheelers slump
The electric three-wheeler (E3W) segment saw a reversal, with registrations declining 14% month-on-month, dragging penetration down sharply by nine percentage points to 59%. The contraction was driven largely by weaker volumes from smaller players. Bajaj Auto gained leadership in the segment, increasing its market share to over 11%, while Mahindra & Mahindra also improved its share despite lower volumes.
Alternate powertrains rise
Beyond EVs, alternative powertrains continued to gain traction. Passenger vehicle CNG sales jumped nearly 47% month-on-month, pushing penetration to 23.5% of industry retail volumes. Hybrid vehicle registrations also increased, though penetration remained modest at about 2.2%.
Business outlook
BNP Paribas stated that the data highlights a key near-term risk for EV adoption: strong cyclical recovery and frequent ICE launches can temporarily slow penetration even when absolute EV volumes are rising. Over the longer term, however, the brokerage expects value redistribution among OEMs as electrification deepens, model pipelines expand and state-level adoption diverges.