India’s Grid Strategy: The EV Boom

A MARKET CATCHING FIRE

India, however, is changing its journey. The subcontinent of a billion people is no longer shifting gears to the growls of petrol engines, but to silence. India’s 2025 total retail sales of electric vehicles exceeded 165,000 units, with battery electric vehicle sales reaching 176,500 units, a 77 per cent increase for all categories of vehicles in 2025, according to the International Energy Agency (IEA).

Illustration by The Geostrata

Two-wheelers and three-wheelers comprise the vast majority of electric mobility vehicles and registrations. In 2025, 60 per cent of the electric cars sold in India were from Indian manufacturers Tata and Mahindra. The most notable growth was from Mahindra, which sold 30,191 units in 2025 compared to 6,757 units in 2024 (a 347 per cent increase), excluding its BE 6 and XEV 9e electric sports utility vehicles (SUVs). This is no tale of foreign brands filling an open market. This is a tale of the mobility ambition of Indians driven by foreign policy, geopolitics, and a power network unprepared for what is to come. 

THE NUMBERS BEHIND THE POLICY

The push toward the adoption of EVs in India was driven by more and more granular industrial policies, beginning with the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme, which was succeeded in 2019 by FAME II, a ₹11,500 crore scheme that has led to the adoption of over 15.4 lakh EVs and 2,877 charging stations in 68 cities.

PM E-DRIVE is a new program with a new philosophy of thinking that was introduced in September 2024 with a budgetary allocation of ₹10,900 crore for electric buses, commercial vehicles, the charging supply chain, and last-mile logistics, but not for private passenger vehicles. The program allocated ₹2,000 crore for 72,300 public charging supply stations, indicating that the government considered the supply chain a critical part of the program.

In parallel, the government has also launched the PM PLI (Production Linked Incentive) scheme for Advanced Chemistry Cells (ACC), its first target for making batteries at home.

The PLI-ACC scheme targets 50 GWh of battery cells manufacturing, with the first three beneficiaries under the scheme - Reliance, Ola Electric, and Rajesh Exports - none able to meet the December 2024 targets, leading to a disbursement of ₹250 crore to ₹15.42 crore. The targets were aggressive, with the first manufacturer showing practically no results for the deadline. The program has begun, but the execution is far from complete.

“India has the consumer pull, the geopolitical urgency, and a partially built supply chain. 30% by 2030 is achievable- only if the manufacturing gap closes faster than oil dependence widens.” 

THE GRID PROBLEM NOBODY TALKS ABOUT

Deep down, the data and the public statements about policies, the situation is, of course, very different. India’s grid is not prepared for the additional burden that will be imposed by the mass adoption of EVs. Fully electrifying the transport sector could mean building power infrastructure to support that sector equals building a second National Electricity System, which would be 900 to 1,100 TWh of additional annual electricity generation.

This is not a uniform issue across the country; the available capacity is low, and the power grids are fragile in semi-urban and rural areas, with limits on building charging stations with more than 50 kW output capacity. In India, during the summer months, when the ambient temperatures reach 40 to 45°C, the charging stations are derated (i.e., they operate with more severe power limits). As a result, for about half of the year and for half of the country, the actual charging power is less than the maximum design charging capacity.

The numbers for the charging network corroborate this story: As of March 2026, India had 27,737 public charging stations, of which 22,753 were operational, leading to 1 operational public charging station per 235 registered EVs, whereas the global standard for these ratios is 1 charging station per 6-20 EVs. If India wants to achieve 30% EV adoption by 2030, it will require 1.32 million public charging stations, more than forty times the current capacity.

The evening charging problem is even more urgent: hundreds of gigawatts of new demand could be created by simultaneous charging during evening hours, potentially destabilising or even shutting down distribution networks. Proposed solutions are charging tariffs, charging at work during the day, and the use of batteries, which all require a significant modernisation of the grid, which is still under development.

SOLAR: THE SOLUTION AND THE PROBLEM

India takes a different approach to its grid problem: develop renewables to the point that all EVs are charged from solar. The statistics are stunning: India installed 31.25 GW of renewables in FY 2025, 24.28 GW of which was solar, for a total of 129 GW of renewables.

The National Electricity Plan in India targets 350 GW of renewables by 2026-27.

The PM Surya Ghar Rooftop Solar program is an acceleration of rooftop solar installations, with 9.56 GW of solar installed by March 2026, and almost 23.9 lakh homes reaping the benefits of the scheme. Solar generation would peak during the day, when EVs can be charged at offices and public stations, and batteries can store energy for evening peak demand. The Draft National Electricity Policy 2026 has a new approach that is focused on locally and digitally controlled grid systems with DSOs that coordinate battery storage and solar charging, but the policy is draft, the DSOs are proposals, and the timeline is not clear.

IN THE DRIVETRAINS

Every part of India's EV strategy is tied to an inescapable fact: China, which provides the only complete supply chain in the world from lithium mining to battery cells to complete motors, and for the foreseeable future, India will rely on China. China accounts for 61 per cent of natural graphite production and 98 per cent of processed graphite. Maintaining its monopoly, China announced in June 2025 that it will restrict exports of rare earth elements used to manufacture EV motors and electronics.

India has been pursuing a capacity-building strategy and, in the meantime, has been purchasing time. India has eased the localisation requirements of the PM E-Drive scheme by three years (2026) for EV truck and bus manufacturers to import subassemblies of traction motors from China. With China accounting for 60-70% of the global rare earth mining and 85-90% of processing and NdFeB magnet production, India's EV industrial policy remains incomplete.

THE ROLE OF GEOPOLITICS

One factor that has accelerated India's EV plans more than the economy or environmentalism is crude oil, which it now imports 85 per cent of. In the 2026 Strait of Hormuz crisis, it realised all its EV targets were not about climate but national security, as higher crude oil prices not only burden a nation with import bills but demonstrate a nation of 1.4 billion people dependent on foreign energy.

Sales of electric vehicles (EVs) in India are on the rise. The volatility in fuel prices has caused Indian citizens to be more concerned about the cost of operating a vehicle, yet the sales of EVs are on the rise. EV adoption in India is very different from that in Europe or California, where adoption is based on environmental friendliness or government mandates.

Indian EV adoption is a more rational reaction to the simple arithmetic of the operating cost of petrol versus electricity in a country that regularly faces fuel price volatility and shocks. India’s EV Market is thriving and reached 2.3 million sales in 2025. India is the leading country for the development and adoption of EVs during a time when the global market for EVs is losing momentum.

“GRID” STRATEGY INDIA NEEDS

India’s EV adoption is real, but so are the risks. India is not just experiencing a real case of over-accelerated vehicle adoption without the supporting infrastructure of the grid, battery supply chain, and charging infrastructure, but it also needs to create a true grid strategy rather than vehicle policies and regulations alone. Elements of this strategy are clear, although not fully synthesised. The smart charging tariffs will shift to solar daytime hours. 

Time-of-day tariffs used to shift EV demand to renewable supply are being adopted in the Indian states of Andhra Pradesh and Rajasthan, and are likely to be adopted in other states too. Battery swapping networks can reduce peak demand and are particularly relevant to two-wheelers and other commercial vehicles. They decouple the demand for battery charging from the demand for vehicle availability. Upgrading the Distribution grid, especially in Tier 2 cities and Semi-Urban Corridors, would be necessary due to an increasing demand from EVs.

The Indian EV market has a projected CAGR (Compound Annual Growth Rate) of 19% and is expected to grow from $5.28 billion in 2025 to $17.88 billion by 2032. These forecasts are expected assuming the country’s infrastructure keeps up with the EV growth. If infrastructure doesn’t grow, range anxiety will be replaced with charge anxiety, and the current momentum will stall.

The government of India has announced the target to reach sales of 30% of all cars, 70% of all commercial vehicles, 40% of all buses, and 80% of all two and three-wheelers will be electric by 2030. This translates to 80 million EVs being sold in India by 2030. These targets are not only for climate change, but also for energy security, industrial policies, and planning to reduce the country’s import bill.

India has always been a country where the pace of development has moved faster than the infrastructure could support it. The country built a world-class railway system for an empire on a subcontinent, and its digital payments have skipped an entire generation of banking. The EV transition may exhibit a similar progression: inevitability, improvisation, and speed. However, electricity is a more rigid framework than bandwidth. Wires must exist. India's grid strategy hinges on whether it can construct the second system before the first system collapses under the weight of the impending future.

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BY PRIYANKA YADAV

TEAM GEOSTRATA

info@thegeostrata.com