As the dust settles on 2024, a year of transformative strides for ICE and electric vehicle (EV) industry, the stage is set for an even more promising 2025. Marked by robust growth across fleet expansions, innovative revenue models, and bold policy initiatives, 2024 has cemented EVs as a cornerstone of the country’s sustainable mobility vision. From the acceleration of mass-market adoption to the amplified ambitions of legacy automakers like Mahindra, Tata Motors and Hyundai, the EV ecosystem has flourished.
Emerging concepts such as Vehicle-as-a-Service (VaaS) and Battery-as-a-Service (BaaS) gained significant traction, while state governments played a pivotal role in nurturing the industry’s growth. With raw material costs falling and the total cost of ownership becoming more accessible, the year closed with an air of optimism, laying the foundation for an electrifying outlook on 2025.
Looking Ahead
The year 2025 is poised to be a transformative chapter for the Indian automotive industry, driven by rapid innovation, evolving consumer preferences, and supportive policy frameworks. With sustainability and technology at the forefront, the sector is expected to see an accelerated shift towards electric and hybrid vehicles, spurred by growing environmental awareness and government incentives.
The EV ecosystem, which made significant strides in 2024, is likely to witness further expansion, with increased investments in infrastructure, advancements in battery technology, and the emergence of new players. Autonomous and connected vehicle technologies may also gain traction as automakers invest in smarter, safer mobility solutions. Meanwhile, the traditional ICE segment will continue evolving, focusing on improved fuel efficiency and alternative fuels to remain relevant in a rapidly greening landscape.
On the commercial vehicles front, shared mobility platforms and VaaS models are set to gain prominence, reshaping how Indians perceive transportation. Supply chain localisation and innovations in manufacturing processes will drive competitiveness, while export opportunities, especially in EV components, could bolster India's position in the global market.
Year Of Convergence
The calendar 2025 promises to be a year of convergence where innovation, regulation, and consumer demand align, steering the Indian automotive industry toward a more sustainable, tech-driven, and globally competitive future.
Last few years marked the dawn of Advanced Driver Assistance Systems (ADAS) in India, as domestic OEMs began integrating this cutting-edge technology across the passenger car segment and, to a lesser extent, in commercial vehicles. Nearly every car launched in 2024 featured ADAS capabilities and connected technologies, signalling a pivotal shift toward smarter, safer mobility.
As the industry gears up for 2025, the momentum is set to accelerate, with Indian automakers aggressively positioning themselves at the forefront of a transformative era. This trajectory combines sustainability and technological innovation, paving the way for a future defined by intelligent, eco-friendly, and globally competitive mobility solutions.
Industry leaders are brimming with optimism, reflecting on the successes of the past year and laying out ambitious plans for the future.
Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd., shared an optimistic outlook for 2025, aligning with the evolving dynamics of the Indian automotive landscape. 'As we move into 2025, we see tremendous growth potential in the Indian passenger vehicle market. Tata Motors is well-positioned to capitalise on key industry shifts, from the surging demand for greener, emission-friendly powertrains to a growing preference for safer cars and SUVs. Our focus remains on building momentum, expanding market share, and enriching our portfolio with exciting new SUVs.
In the EV space, “we are committed to strengthening our leadership and tapping into emerging opportunities while ensuring customer satisfaction remains at the heart of our strategy. Our aim is to deliver an exceptional experience at every touchpoint, solidifying Tata Motors' reputation as a trusted partner in the journey toward a sustainable, technology-driven future,' Chandra added.
Piyush Arora, Managing Director & CEO of Škoda Auto Volkswagen India, shares an optimistic vision for 2025. “As we stride into 2025, we are thrilled to ‘Fuel Transformation’ within the Indian automotive landscape by expanding our product portfolio and intensifying efforts to cater to the evolving aspirations of Indian customers. Innovation, efficiency, and sustainability remain the pillars driving our journey forward,” he says.
This vision aligns seamlessly with the company’s strategy to strengthen the Group’s portfolio, encompassing a diverse range of advanced and eco-friendly BEV and ICE models across our five aspirational brands—Volkswagen, Skoda, Audi, Porsche, and Lamborghini. “In the coming year, we aim to introduce an array of exciting new products and strategic models, keeping the momentum alive while resonating with a broader customer base. These efforts also reflect our commitment to India’s ‘Make-in-India’ vision, as we continue to innovate and contribute to the nation’s automotive transformation,” Arora adds.
Satinder Singh Bajwa, Chief Commercial Officer of JSW MG Motor India, shared his vision for the company’s role in shaping India’s automotive future. 'As India accelerates towards becoming the third-largest automobile market by 2026, we are committed to driving this growth and innovation. With the electric vehicle market projected to triple in 2025, our focus on New Energy Vehicles (NEVs) will remain at the core of our business strategy, making EVs more attractive, accessible, and seamlessly integrated into the lives of consumers. To keep pace with this transformation, we plan to introduce a new product every six months, offering a dynamic mix of electric and ICE models that cater to diverse customer needs and preferences,' Bajwa adds.
Two-wheelers
In 2025, traditional ICE two-wheelers are expected to maintain a significant presence in the market, albeit facing increasing competition from the growing electric two-wheeler segment. Several factors will influence their performance including continued market dominance in Tier-2 and Tier-3 cities as the traditional two-wheelers will likely remain the preferred choice in rural and semi-urban areas due to their affordability, widespread availability, and familiarity. In regions where EV infrastructure is still developing, conventional two-wheelers will continue to be the go-to option for commuters and small businesses.
Manufacturers of ICE two-wheelers will increasingly adopt cleaner technologies to meet stringent emission norms such as BS-VI Stage 2 (RDE). This includes fuel-efficient engines, hybrid technology, and alternative fuels like ethanol blends and CNG, which will help these vehicles remain relevant in a sustainability-focused market.
Non-electric two-wheelers will likely remain more affordable upfront compared to their electric counterparts, making them attractive for price-sensitive consumers. However, rising fuel prices and lower total cost of ownership (TCO) for EVs might pose challenges to their market share.
With urban consumers showing a preference for advanced features and stylish designs, ICE two-wheelers in premium and niche segments (e.g., adventure bikes, cruisers, and performance bikes) will continue to thrive. This trend will be driven by enthusiasts and consumers seeking aspirational vehicles.
Indian manufacturers are well-positioned to leverage export markets where electric mobility adoption is slower. Traditional two-wheelers, known for their durability and affordability, are likely to perform strongly in such markets.
Challenges Ahead
Despite these strengths, traditional two-wheelers will face challenges from the expanding EV ecosystem, government incentives for electric vehicles, and increasing consumer awareness of environmental concerns. Their long-term performance will depend on manufacturers’ ability to innovate, adapt to changing regulations, and differentiate their offerings in a competitive landscape.
Overall, while the transition to electric mobility will accelerate, traditional two-wheelers are expected to retain a significant market share in 2025, particularly in regions where infrastructure, cost, and utility needs favour ICE vehicles.
Bonding For A Greener Tomorrow
According to S Sunil Kumar, Country President, Henkel Adhesives Technologies India, pivotal industry trends such as urbanisation, mobility, sustainability, and digitalisation set to drive transformative growth. In the realm of e-mobility, adhesives, sealants, and functional coatings are poised to play a crucial role in improving battery safety, efficiency, and performance—key elements for the continued growth of electric vehicles.
Investments in digital transformation are empowering organisations to streamline operations, optimise resource use, and enhance decision-making, ensuring they are future-ready, resilient, and competitive in a rapidly evolving landscape. “We are proud to lead this transformation. By harnessing our expertise, cultivating strategic partnerships, and delivering innovative, sustainable solutions, we are uniquely positioned to help our customers drive progress and achieve growth in an ever-changing industrial ecosystem,” he adds.
Samarth Kholkar, CEO and Co-Founder of BLive, envisions 2025 as a landmark year for the sector. “The electric two-wheeler market is poised to redefine India’s mobility landscape, setting new benchmarks for sustainable growth and transforming consumer perceptions about eco-friendly transportation,” he said.
Hyder Ali Khan, Director & CEO of Godawari Electric Motors, envisions an aggressive expansion of its product portfolio, alongside significant public and private orders that promise to accelerate the company’s growth trajectory.
Akash Gupta, Co-Founder and CEO of Zypp Electric, says the company, in 2025, is set to deploy 200,000 electric vehicles across the country within the next 12 to 18 months. “We are committed to doubling down on innovation, fleet expansion, and strategic partnerships to meet the surging demand for sustainable mobility,” Gupta says. “Our efforts will focus on strengthening EV charging infrastructure, advancing intelligent fleet management systems, and actively contributing to India's net-zero goals. Together, we aim to revolutionise last-mile logistics, setting a new benchmark for businesses and communities by making green mobility the standard,” he adds.
Madhumita Agrawal, Founder & CEO of Oben Electric, believes India is on the brink of emerging as a global leader in the EV revolution. The next phase of growth will be defined by enhanced affordability, extended range capabilities, a strengthened charging infrastructure, and deeper penetration into rural markets. Indigenous manufacturers are poised to set new benchmarks with innovative offerings, while sustained government investments will drive adoption across both urban and rural landscapes, propelling the country toward a transformative future in mobility.
Sameer Aggarwal, Founder & CEO of Revfin, anticipates 2025 as a pivotal year for scaling EV adoption. “With an intensified focus on developing robust EV charging infrastructure and scaling up battery-swapping networks, transitioning to electric mobility will become more seamless for consumers. Coupled with innovative financing models and efforts to reach underserved markets, the industry is set to overcome accessibility barriers, making sustainable mobility a reality for all,” he adds.
Ashish Bagadia, Corporate Finance and Investment Banking Partner at BDO India, highlights key developments expected in 2025. “We foresee continued adoption trends in 2025, with emerging segments such as the resale market for EVs and battery recycling gaining prominence. From a funding perspective, the investment landscape is becoming more diversified, as traditional and homegrown growth private equity investors show heightened interest. These investors are likely to focus on proven business models and write larger cheques, reflecting the sector’s maturity. Additionally, 2025 may mark a pivotal year for segment creators, as entry barriers are expected to rise significantly, fostering a more competitive and resilient ecosystem.”
Conclusion
As India’s automotive industry accelerates into 2025, it stands at the cusp of a transformative era defined by sustainability, innovation, and global competitiveness. With robust policy support, pioneering advancements in technology, and a surge in investment, the sector is poised to reshape mobility, not just within the country but on a global stage. From electrifying fleet operations to fostering emerging segments like battery recycling and resale markets, the year ahead promises to be a turning point. As the industry continues to innovate and adapt, India is well-positioned to lead the charge toward a cleaner, smarter, and more inclusive automotive future, setting benchmarks that resonate far beyond its borders.
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