India’s electric vehicle (EV) market is no longer emerging; it is accelerating at scale. With sales crossing two million units in the last fiscal year and passenger EV volumes nearly doubling within months in 2025, electric mobility is moving decisively into the mainstream. EVs now account for about five per cent of passenger vehicle sales, a crucial milestone on the road to the government’s 30 per cent target by 2030. Budget 2026 arrives at a defining moment, carrying the potential to push the sector beyond early adoption into a phase of ecosystem-led, inclusive growth.
For founders building daily within the EV ecosystem, this moment is not just about headline numbers. It is about creating resilient systems that work on the ground, for manufacturers, fleet operators, gig workers and consumers alike. India has already proven its ability to develop world-class EVs through frugal engineering and local innovation. The next challenge is to ensure that policy keeps pace with ambition.
Localising the EV supply chain
One of the most pressing gaps in India’s EV journey is the domestic supply chain. While vehicle assembly and software development have progressed rapidly, core components such as motors, controllers, battery management systems and power electronics remain heavily import-dependent. This dependence raises costs and exposes businesses to supply risks, particularly affecting fleet operators who rely on high uptime to sustain livelihoods.
Budget 2026 can play a transformative role by encouraging localisation through targeted tax incentives for MSMEs, GST rationalisation on key raw materials, and support for battery chemistries suited to Indian climate and usage conditions. Strengthening local manufacturing is not merely an economic imperative; it is central to the Atmanirbhar Bharat vision and long-term EV affordability.
Micro factories and decentralised manufacturing
Alongside localisation, micro factories represent a powerful opportunity aligned with India’s social and economic structure. Traditional automotive manufacturing relies on large, centralised plants that are capital-intensive and inflexible. In contrast, micro factories are smaller, agile and embedded within local communities. They reduce logistics costs, generate local employment and allow regional customisation of EVs.
Decentralised production models have already demonstrated their value in Tier-2 and Tier-3 cities, enabling faster vehicle deployment and nurturing local supplier networks. Budget support in the form of easier access to capital, regional manufacturing clusters and shared testing infrastructure could significantly accelerate this shift, democratising EV manufacturing beyond metropolitan hubs.
Building energy and charging resilience
As commercial EV fleets expand, pressure on charging and battery swapping infrastructure is intensifying. Delivery vehicles, gig workers and shared mobility operators depend on fast, reliable energy access to remain viable. Clear policy frameworks for Battery-as-a-Service models, covering interoperability, safety standards, data governance and digital payments, are essential to unlocking scale.
Budget 2026 can further strengthen this backbone through viability gap funding for charging hubs, tax rationalisation to lower operational costs, and corridor-based charging strategies linking urban and rural centres. Reliable energy infrastructure is foundational to sustained EV adoption.
Financing inclusion for first-time EV users
Access to finance remains one of the most significant barriers to EV adoption. Many early users—gig workers, small fleet owners and delivery personnel—lack formal credit histories, despite demonstrating consistent earning potential. This disconnect limits uptake in precisely the segments where EVs deliver the greatest economic and environmental benefits.
Dedicated credit guarantee schemes under Budget 2026 could reduce lender risk and expand institutional lending to first-time buyers. Interest subvention for commercial EV loans would further ease adoption. Additionally, encouraging data-driven, usage-based financing models that leverage real-time vehicle data could reshape mobility lending to reflect modern operating realities.
Innovation and sustainability as growth multipliers
To remain globally competitive, India must continue investing in EV innovation. Technologies such as solid-state batteries, advanced thermal systems, lightweight materials, AI-enabled predictive maintenance and cloud-based telematics will define the next generation of mobility. A National EV Innovation Fund offering grants and early-stage capital could enable startups beyond major metros to contribute meaningfully to this transformation.
Equally important is battery lifecycle management. As EV volumes grow, end-of-life battery handling becomes critical. Budget incentives for recycling infrastructure, clear Extended Producer Responsibility frameworks and recycling hubs near industrial belts can help create a circular battery economy, strengthening both environmental outcomes and energy security.
A catalytic budget for electric mobility
Founders across India’s EV ecosystem share a common aspiration: a cohesive environment where technology, infrastructure, finance and policy work in harmony. Budget 2026 stands at this inflection point. With focused support for supply chain localisation, decentralised manufacturing, energy infrastructure, inclusive financing, innovation and sustainability, India can set a global benchmark for scalable electric mobility.
The world is accelerating towards electrification. India has the talent and ambition to lead. What it needs now is a catalytic budget that converts momentum into lasting impact.
