Electric Car Sales Slow Down After GST Cuts — Tata leads, MG & Mahindra Fight for Second Spot

Quick Highlights:

• EV sales fall 18% MoM in September 2025 to 15,038 units
• Tata Motors leads with 6,094 units, holding 40% share
• JSW MG Motor and Mahindra follow with 23% and 21% shares
• Tesla delivers 60 Model Ys in its India debut
• GST 2.0 cuts narrow price gap between ICE and EVs
• BYD India and Kia record best-ever EV sales months
• Luxury EV sales resilient, led by BMW and Mercedes-Benz
• Nine-month CY2025 EV sales surpass entire 2024 tally

EV Sales Dip in September 2025 as GST Cuts on ICE Cars Impact Momentum

After two consecutive months of record-breaking numbers, India’s electric passenger vehicle (e-PV) industry hit a slowdown in September 2025. Retail sales fell 18% month-on-month (MoM) to 15,038 units, down from August’s 18,307 units, according to Vahan statistics. This dip comes in sharp contrast to the segment’s remarkable 143% year-on-year (YoY) growth compared to September 2024, when only 6,184 e-PVs were sold.

The decline highlights the immediate impact of GST 2.0 price cuts on internal combustion engine (ICE) vehicles. With GST reduced from 28% to 18% and the compensation cess removed, ICE cars across petrol, diesel, and CNG variants have become significantly more affordable. Meanwhile, EVs continue to be taxed at 5%, but the once-large cost gap between EVs and entry-level ICE cars has shrunk, driving consumer preference toward ICE vehicles—particularly during the festive buying season.

Despite the dip, September marked an important milestone with two new entrants—Tesla and Vinfast—joining India’s e-PV market, expanding the playing field to 16 OEMs.

Tata Motors Retains Market Leadership

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Tata Motors continues to dominate the EV space with 6,094 units sold in September, though this represents an 18% decline from August’s 7,444 units. Even so, Tata maintains a commanding 40% market share.

The Harrier EV, launched earlier this year, has helped sustain demand alongside popular models like the Punch, Nexon, and Curvv EVs. The Tiago and Tigor EVs also remain volume contributors. However, Tata’s leadership is increasingly challenged by JSW MG Motor and Mahindra, both of whom have expanded aggressively with new EV launches.

JSW MG Motor India: Expanding with Premium Offerings

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JSW MG Motor India secured the second spot with 3,843 EVs sold in September, down 24% MoM from August’s 5,079 units. Despite the decline, it retains a healthy 23% share of the e-PV market.

MG’s strategy hinges on innovation and diversification. The Windsor EV with battery-as-a-service (BaaS) disrupted Tata’s dominance, while new premium entries—the M9 MPV and the Cyberster electric roadster (Rs 72.49 lakh)—are set to attract affluent urban buyers. These premium models are sold via the MG Select network, expanding MG’s reach beyond mass-market offerings like the ZS EV and Comet EV.

Mahindra & Mahindra: Prepping for Festive Demand

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Mahindra & Mahindra (M&M) sold 3,187 e-SUVs in September, a 14% MoM decline from August’s 3,699 units, but still holds a solid 21% market share.

The newly launched BE 6 and XEV 9e SUVs, alongside the XUV400, form the backbone of Mahindra’s EV push. Importantly, Mahindra’s Chakan factory produced a record 4,921 EVs in August, reflecting the company’s readiness to scale production for the festive season surge in demand.

BYD India: Defying the Trend

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China’s EV giant BYD India bucked the industry-wide slowdown, posting 541 units in September, up 13% MoM from August’s 478 units. This marks BYD’s best-ever month since May 2025 (531 units).

BYD’s diverse portfolio—Atto 3 SUV, Seal sedan, eMax 7 MPV, and Sealion 7 SUV—has begun resonating with Indian buyers, positioning it as a strong contender among mainstream EV brands.

Kia India: Best Month Yet

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Kia India reported 499 EVs sold in September, up 8% MoM from 463 units in August. This performance pushed Kia ahead of Hyundai, securing it the fifth spot in India’s EV OEM rankings.

The newly launched Carens Clavis EV MPV, a mass-market model, is the key driver of growth. While Kia also sells the premium EV6 and EV9 (imported CBUs), it is the Carens Clavis that has struck a chord with cost-sensitive buyers seeking value-driven EV options.

Hyundai India: Struggles with Creta Electric

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Hyundai Motor India recorded a steep decline, selling just 342 e-SUVs in September, down 45% from August’s 618 units.

Despite a strong start earlier this year with the Creta Electric, demand has slowed considerably. After peaking at 905 units in March 2025, sales have trended downward. Hyundai also offers the Ioniq 5, but it remains a niche product.

Luxury EVs: Resilience Amid Slowdown

The luxury EV market fared better than the mainstream segment, with 490 units sold in September, down only 2.5% from August’s 503 units.

• BMW India led with 307 units, though sales dipped from August’s 393.
• Mercedes-Benz India saw growth, selling 95 EVs, up from 80 in August.
• Volvo Auto India recorded 20 units, slightly down from 21 in August.
• Tesla India made its long-awaited debut, delivering 61 Model Ys to customers in Mumbai, Delhi, Pune, and Gurugram. Tesla has reportedly received over 600 bookings for the Model Y.
• Vinfast India, a new entrant in the Indian automotive scene, delivered 21 units of its locally assembled VF6 and VF7 e-SUVs.

All OEMs by Sales – September 2025

Cumulative Sales Cross 125,000 Units in 2025

Despite the September dip, India’s e-PV market is on track for a record year. Cumulative sales for January–September 2025 stand at 125,146 units, already surpassing the entire 2024 tally of 99,625 units.

Analysts project total sales of 150,000–155,000 units in 2025, underscoring the sector’s rapid expansion despite temporary headwinds.

The Road Ahead

The September slowdown is primarily a reflection of ICE vehicle price cuts under GST 2.0 coinciding with the festive buying season. As the Diwali season peaks in October, all eyes are on whether EV demand stabilizes or continues its downward trajectory.

With more OEMs entering the fray, expanding portfolios, and localized production reducing costs, the EV market remains on a long-term growth trajectory. The performance of Tata, MG, Mahindra, and new entrants like Tesla and Vinfast will be critical in shaping the next phase of India’s electric mobility journey.