PV industry likely to touch record cumulative domestic and export volume of 50 lakh units in FY26: Crisil

Crisil Ratings in its latest report has said that passenger vehicle (PV) industry in India is expected to touch a record cumulative domestic and export volume of 50 lakh units this fiscal (FY26) despite the annual growth rate slowing down to 2-4%.

This marks the fourth consecutive year of record sales, although momentum has significantly eased from the 25% surge in fiscal 2023 after the pandemic.

However, the report said penetration of electric vehicles (EVs) is seen at a moderate 3-3.5% despite new launches and declining battery costs due to high prices, modest charging infrastructure and range anxiety, restricting the market to urban users as a second car option.

The growth in the EV segment has slowed after doubling last year on a low base. It said the domestic market accounted for about 85% of total volume last fiscal, with exports accounting for the rest. On the EV front, it said growth has slowed after doubling last year, but on a low base.

According to the report, the entry of global premium EV models, including Tesla would intensify competition in the premium segment, which accounts for less than 10% of the overall volume, and will likely reset consumer expectations across categories, pushing Indian Original Equipment Manufacturer (OEMs) to accelerate technology upgrades.

That said, the current high tariffs will limit imports. Going ahead, it said the pace of interest rate cuts and EV adoption, as well as potential supply shocks could impact the availability of chips and battery cells amid global tensions, and will, therefore, bear watching.