India’s EV sector has received just 18% of the Rs 12.5 lakh crore required by 2030: Report
EV investment announcements shifted decisively from three-wheelers to four-wheelers in CY 2024 and 2026. Commercial EV borrowers face interest rates of 15–33%, which offset the total cost of ownership advantages of EVs
- Feb 25, 2026,
- Updated Feb 25, 2026 2:18 PM IST
India’s electric vehicle (EV) sector attracted Rs 2.23 lakh crore in investment from 2020 to 2025, which was just 18% of the estimated total investment needed by 2030 and the industry needs a cohesive investment framework to achieve its 2030 goals, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
Also read: EVs may lose zero-emission tag; PMO steps in
By 2030, India aims to increase the electric vehicle (EV) share of all private cars to 30%, 70% for commercial vehicles, 40% for buses, and 80% for two- and three-wheelers. Achieving these goals requires substantial investment in EV manufacturing, charging infrastructure, and supportive ecosystems.
From an in-depth analysis of capital flows, the authors estimate Rs 2.23 lakh crore was deployed across three core nodes of India’s electric transport ecosystem from 2020–2025: Manufacturing capacity accounted for the bulk, followed by public subsidies and incentives, and EV charging infrastructure.
“While Rs 2.23 lakh crore is significant capital mobilisation in just five years, it represents only about 18% of the Rs 12.5 lakh crore required by 2030. Mobilising the remaining by 2030 will require systemic financing reforms,” says co-author Subham Shrivastava, Climate Finance Analyst at IEEFA.
A breakdown of the investments shows internal accruals accounted for the largest share of realised EV manufacturing investment Rs 1.59 lakh crore, followed by debt Rs 36,738 crore and equity Rs 6,455 crore.
This aggregate pattern, however, masks meaningful variation across vehicle segments, where the balance between internal funding and external capital reflects differences in market structure, capital intensity, and firm composition.
For instance, the electric three-wheeler segment— characterised by a highly fragmented OEM base—relied predominantly on internal accruals and some debt, whereas segments such as electric four-wheelers and two-wheelers, led by more established incumbents, exhibited a relatively more diversified financing mix.
“From 2020–2025, electric three-wheelers attracted the largest share (78%) of investments among vehicle segments, due to the segment’s maturity and commercial-scale operations alongside its fragmented OEM base,” says co-author Saurabh Trivedi, Sustainable Finance Specialist at IEEFA. “However, recent investment announcements in 2024 and 2025 reveal a pivot towards electric four-wheelers, driven by rising demand for electric cars.”
Government subsidies under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and other Union- and state-level policies catalysed adoption by disbursing Rs 18,251 crore from FY2020–24.
However, investment in public EV charging has not kept pace with other segments of the EV sector. While public EV charging expanded significantly from 5,151 chargers in 2020 to 39,485 in 2025, India’s ratio of chargers to EVs remains far below global benchmarks.
Publicly available estimates suggest that Rs 20,600 crore of investment in charging infrastructure will be required for India to achieve its 2030 goals. Based on calculations of realised investment, the authors estimate that capital deployed from 2020–2025 accounted for only 9.6% of this amount, highlighting a significant investment gap.
With an estimated 82% of required investments still unmet, the central challenge is no longer policy ambition but the cost and structure of capital.
The report points out that commercial EV borrowers face interest rates ranging from 15% to 33%, significantly eroding the total cost of ownership advantages that electric vehicles otherwise offer. High financing costs dampen demand, delay fleet expansion, and ultimately slow manufacturing capacity growth.
India’s electric vehicle (EV) sector attracted Rs 2.23 lakh crore in investment from 2020 to 2025, which was just 18% of the estimated total investment needed by 2030 and the industry needs a cohesive investment framework to achieve its 2030 goals, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
Also read: EVs may lose zero-emission tag; PMO steps in
By 2030, India aims to increase the electric vehicle (EV) share of all private cars to 30%, 70% for commercial vehicles, 40% for buses, and 80% for two- and three-wheelers. Achieving these goals requires substantial investment in EV manufacturing, charging infrastructure, and supportive ecosystems.
From an in-depth analysis of capital flows, the authors estimate Rs 2.23 lakh crore was deployed across three core nodes of India’s electric transport ecosystem from 2020–2025: Manufacturing capacity accounted for the bulk, followed by public subsidies and incentives, and EV charging infrastructure.
“While Rs 2.23 lakh crore is significant capital mobilisation in just five years, it represents only about 18% of the Rs 12.5 lakh crore required by 2030. Mobilising the remaining by 2030 will require systemic financing reforms,” says co-author Subham Shrivastava, Climate Finance Analyst at IEEFA.
A breakdown of the investments shows internal accruals accounted for the largest share of realised EV manufacturing investment Rs 1.59 lakh crore, followed by debt Rs 36,738 crore and equity Rs 6,455 crore.
This aggregate pattern, however, masks meaningful variation across vehicle segments, where the balance between internal funding and external capital reflects differences in market structure, capital intensity, and firm composition.
For instance, the electric three-wheeler segment— characterised by a highly fragmented OEM base—relied predominantly on internal accruals and some debt, whereas segments such as electric four-wheelers and two-wheelers, led by more established incumbents, exhibited a relatively more diversified financing mix.
“From 2020–2025, electric three-wheelers attracted the largest share (78%) of investments among vehicle segments, due to the segment’s maturity and commercial-scale operations alongside its fragmented OEM base,” says co-author Saurabh Trivedi, Sustainable Finance Specialist at IEEFA. “However, recent investment announcements in 2024 and 2025 reveal a pivot towards electric four-wheelers, driven by rising demand for electric cars.”
Government subsidies under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and other Union- and state-level policies catalysed adoption by disbursing Rs 18,251 crore from FY2020–24.
However, investment in public EV charging has not kept pace with other segments of the EV sector. While public EV charging expanded significantly from 5,151 chargers in 2020 to 39,485 in 2025, India’s ratio of chargers to EVs remains far below global benchmarks.
Publicly available estimates suggest that Rs 20,600 crore of investment in charging infrastructure will be required for India to achieve its 2030 goals. Based on calculations of realised investment, the authors estimate that capital deployed from 2020–2025 accounted for only 9.6% of this amount, highlighting a significant investment gap.
With an estimated 82% of required investments still unmet, the central challenge is no longer policy ambition but the cost and structure of capital.
The report points out that commercial EV borrowers face interest rates ranging from 15% to 33%, significantly eroding the total cost of ownership advantages that electric vehicles otherwise offer. High financing costs dampen demand, delay fleet expansion, and ultimately slow manufacturing capacity growth.