Hyderabad: Rising fuel prices accelerated electric vehicle demand in India during May, according to Nomura and HSBC. The trend pushed EV penetration in both passenger vehicles and two-wheelers to recent highs.
Nomura said electric vehicles accounted for 6.4 per cent of passenger vehicle sales in May. The share stood at 4 per cent in FY26.
Electric two-wheelers increased their share to 8.9 per cent in May. The figure was around 6.5 per cent a year earlier.
HSBC reported a similar trend. The brokerage estimated electric two-wheeler penetration at 9.3 per cent. It pegged electric passenger vehicle penetration at 6.6 per cent during the month.
Among passenger vehicle manufacturers, Tata Motors emerged as a major beneficiary of the growing shift towards EVs. The company recorded an 85 per cent year-on-year increase in electric vehicle sales.
According to Nomura, EV bookings at Tata Motors increased 2.5 times over the past two months. The brokerage also noted strong demand in the sub-Rs 15 lakh segment.
Electric vehicle demand boosts automakers
To meet rising demand, Tata Motors plans to increase its EV production capacity from 10,000 units a month to 15,000 units.
The momentum was even stronger in the electric two-wheeler segment. TVS Motor retained the top position with around 42,000 electric scooter registrations in May.
Bajaj Auto ranked second in the segment. Ather Energy secured the third spot.
Ather more than doubled its sales year-on-year. The company expanded its market share to 16.5 per cent.
Brokerages said higher fuel prices played a key role in accelerating EV adoption. Oil marketing companies increased petrol and diesel prices by around Rs 8 per litre over two weeks in April.
Meanwhile, the Indian crude basket stayed above $100 per barrel for three straight months until May. The Middle East crisis continued to create uncertainty.
Disruptions around the Strait of Hormuz also kept oil prices elevated. The situation added pressure to fuel markets across the world.
Despite concerns over rising commodity costs, Nomura and HSBC expect EV adoption to maintain momentum. Nomura said the Indian EV market had reached an inflection point, supported by favourable policies and growing consumer acceptance.