India's transition to electric mobility is progressing at an uneven but increasing pace, with Kerala and Delhi emerging as key leaders in different electric vehicle (EV) segments, according to the latest research report by a financial services holdings company on India's EV market.

Kerala has recorded the highest electric passenger vehicle (EPV) penetration rate in the country, reaching 9.1% in March 2025, significantly above the national average of 2.9%. The state has consistently exceeded other regions, increasing from its 5.4% penetration rate for the 2025 fiscal year.

Factors influencing Kerala's EPV adoption

Several factors contribute to Kerala's position in electric passenger vehicle adoption. The state has the highest per capita expenditure among major Indian states, with residents possessing substantial disposable income.

Kerala's consumer market has shown a preference for high-end products, including premium automobiles, gold, and expensive mobile phones, making it receptive to EV adoption despite higher initial costs.

Additionally, Kerala's residential structure provides an advantage for EV ownership. Unlike high-income regions such as Mumbai and Bangalore, where a significant proportion of residents live in apartment complexes, Kerala's population predominantly resides in individual houses and villas.

This allows for easier installation of home charging infrastructure, reducing dependence on public charging networks.

Electricity costs in Kerala are also lower than in metropolitan centres such as Mumbai, further decreasing operational expenses for EV owners.

The state has a strong car ownership culture despite the presence of a developed public transport system. This, along with a history of adopting environmentally focused technologies, has supported the growth of EV adoption.

Kerala's relatively smooth traffic flow, in contrast to heavily congested cities such as Bangalore, also facilitates higher car usage, further supporting demand for electric vehicles.

Delhi's dominance in the EV three-wheeler market

Delhi continues to lead the electric three-wheeler (E3W) segment, recording an 86.3% penetration rate as of March 2025. The capital maintained its position throughout the fiscal year, concluding with an 83.5% adoption rate, indicating near-total electrification of its three-wheeler fleet.

Several factors have contributed to this trend. Delhi's air pollution levels have prompted policy interventions by the local government, leading to strong incentives for the transition to electric vehicles, particularly commercial vehicles such as three-wheelers, which operate extensively on a daily basis.

Delhi's urban layout also differs from that of Mumbai and Bangalore, with lower population density due to historical restrictions on high-rise developments. This has facilitated the development of parking and charging infrastructure, removing a significant barrier to E3W adoption. Commercial operators have found it easier to establish charging facilities, supporting the transition to electric fleets.

Regional disparities in EV adoption

EV adoption rates vary significantly across states. For example, Gujarat reported a 1.4% penetration rate for passenger EVs and 5.3% for three-wheelers in March 2025, highlighting the uneven pace of electrification.

Other states have recorded stronger adoption rates in the passenger vehicle segment, with Karnataka at 4.1% and West Bengal at 3.5%, both exceeding the national average. In the three-wheeler segment, Uttar Pradesh (84.6%) and Punjab (77.2%) followed Delhi in adoption rates.

Growth of the EV three-wheeler segment

The three-wheeler segment has seen the most extensive electrification among all vehicle categories. As of March 2025, its penetration rate had reached 59.3%, up from 56% in February.

Economic factors have played a key role in this transition. Lower operating costs and a favourable total cost of ownership have made electric three-wheelers a viable alternative to conventional models.

Mahindra & Mahindra remains the market leader in the E3W segment, holding an 11.3% share, while Bajaj Auto recorded the highest growth in March, increasing its market share to 9%, a 29-basis-point rise from the previous month.

The segment's expansion is not limited to the leading states. Tamil Nadu recorded a 23.6% E3W penetration rate, while Karnataka reached 17% in March 2025.

Industry analysts attribute this transition to economic advantages, government policies, and the segment's urban-centric operations, which reduce concerns related to range limitations. Fleet operators have increasingly adopted electric three-wheelers due to their lower daily operating costs and reduced maintenance requirements.

Outlook for India's EV market in 2025 and beyond

India's EV transition continues to expand, with Kerala leading in passenger vehicle adoption and Delhi in the three-wheeler segment. The widespread adoption of electric three-wheelers nationwide further demonstrates the potential for electrification across various categories.

With major manufacturers preparing new EV launches in 2025, including Maruti Suzuki's first electric vehicle, growth in the sector is expected to continue across all segments.