Electric Passenger Vehicles Surge as Festive Demand Fuels Market Revival

Electric passenger vehicle sales have made a strong comeback following the initial downturn caused by reduced GST on internal combustion engine vehicles, reports YES Securities. The festive season has stimulated a healthy appetite for electric vehicles, evidenced by an average year-on-year retail growth of 15-20%.

Original equipment manufacturers are employing strategies such as offering higher incentives on stocks exceeding 90 days in age, alongside a Rs 50,000 loyalty discount for current brand customers to augment sales. Dealers maintain controlled EV inventory levels, shifting focus to the evolving dynamics of the internal combustion vehicle market.

An intriguing trend in the passenger vehicle segment is the 4-5% rise in first-time car buyers across regions, a promising indicator of market health. Preferences are notably veering towards compact and mid-sized SUVs. While demand for premium hatchbacks and SUVs stays robust, small cars are witnessing a notable 30-40% uptick in rural bookings.

The increased small car inquiries are largely attributed to substantial price slashes post-GST reduction, enhanced by a boost in 2-wheeler upgrades and vehicle swaps during the marriage season. However, the sustainability of this rebound past January 2026 is uncertain, relying on continued discounts or new model launches.

Industry forecasts suggest lasting revival in small car demand will require further price reductions or fresh market entries in the forthcoming months. The outlook for post-festive season market dynamics remains cautiously optimistic.