EV Commercial Sales Hit Record High in May 2025 Amid Supply Strain

India's electric vehicle sector posted its highest May sales ever in 2025. While two-wheelers and passenger vehicles contributed significantly, electric commercial vehicles (CVs), particularly three-wheelers, light goods vehicles, and buses, also delivered strong growth. But the rising demand faces a looming supply chain threat: a slowdown in rare earth magnet shipments from China, vital for EV motor production.

Electric Three-Wheelers Dominate Segment Growth

Electric three-wheelers led the charge in May 2025. Out of 104,448 three-wheelers sold (across all fuel types), 66,019 were electric, marking a 21% year-on-year growth. These vehicles held a 63% share of the total 3W market, up from 56% in May 2024. This growth came as CNG three-wheeler sales fell by 7% to 24,121 units. Diesel-powered models maintained an 11% share with 11,245 units sold. Higher CNG prices appear to be pushing customers toward electric alternatives, giving EVs a competitive edge in total cost of ownership.

The electric 3W segment is becoming more consolidated. Top performers included Mahindra Last Mile Mobility, Bajaj Auto, YC Electric Vehicles, Saera Electric Auto, Dilli Electric Auto, and Piaggio. TVS Motor, a new entrant, climbed quickly to the sixth spot. As the market matures, legacy OEMs are displacing smaller MSMEs by offering better-built vehicles, stronger support networks, and trusted brand names.

Electric Commercial Vehicles Register 82% YoY Growth

May 2025 saw 1,023 electric commercial vehicles sold: an 82% jump from May 2024’s 561 units. Electric light goods vehicles drove this surge, selling 642 units and capturing 63% of the segment’s volume.

Electric buses sold 345 units in May, rising 40% year-on-year. Additionally, they sold 36 electric heavy goods vehicles. This trend indicates broader fleet electrification across India’s urban and intercity transport systems.

Demand from logistics firms, especially for last-mile delivery, continues to pull up sales of light-duty electric trucks. Improved technology, better uptime, and favorable operating expenses are key drivers of adoption in this category.

Sales momentum in FY2026 has been strong so far.

The EV sector as a whole sold 179,851 units in May 2025, up from April’s 169,003 units. This growth followed FY2025’s record-breaking 1.96 million EVs. Combined April-May 2025 sales reached 348,854 units, a 74% rise from the same period last year. Commercial EVs are a small but rapidly growing part of this market. Their expansion reflects increased fleet orders, government procurement, and heightened environmental mandates in major cities.

Rare Earth Magnet Supply Threatens Future Output

Despite strong sales, a critical risk has emerged. China, which supplies over 90% of rare earth magnets used in EV motors like BLDC and PMSM types, has restricted exports. Since April 2025, import permits have become mandatory, slowing shipments globally.

Rajiv Bajaj (Bajaj Auto) and Rakesh Sharma (Executive Director, Bajaj Auto) voiced concerns in April and May about severe delays in magnet imports. Sharma explained the new clearance process involves approvals from Indian ministries, the Chinese embassy, and China’s own export authorities. He warned that production may suffer in July if the issue isn’t resolved.

EV motor supplier Sona Comstar echoed these concerns. CEO Vivek Vikram Singh noted in May that delays could disrupt global production. He mentioned that Sona is exploring alternative magnet materials, new technologies, and diversifying sourcing channels to reduce dependency on China.

Industry bodies SIAM and ACMA are urging the Indian government to intervene and fast-track approvals. The goal: resume smooth rare earth magnet imports before domestic EV production gets derailed.

Conclusion

India’s electric commercial vehicle segment is scaling rapidly, with May 2025 marking a record-breaking month. Yet, growth hinges not just on domestic demand but also on stable international supply chains. If magnet imports don’t resume soon, production and momentum could slow down in the months ahead.

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