Domestic automobile retail market continued its growth trajectory in May, with vehicle registrations rising 5.5% year-on-year (YoY), while electric vehicle (EV) sales expanded at more than seven times the pace of the overall market, according to Vahan data available till 12 pm on May 31.
Overall vehicle registrations stood at 2.44 million units in May 2026, compared with 2.32 million units in the corresponding month last year. On a month-on-month (MoM) basis, registrations were lower than the 2.72 million units recorded in April 2026, reflecting a decline of 10.1%.
Segment Breakdown
Segment-wise, passenger vehicles emerged as the strongest performer among major categories. Car registrations rose 18.9% YoY to 382,681 units in May from 321,860 units a year ago, indicating sustained consumer demand in the segment despite broader concerns around affordability and financing costs.
Two-wheelers, which account for nearly three-fourths of the country’s vehicle market, grew 4.8% YoY to 1.80 million units, compared with 1.72 million units in May 2025. Three-wheeler registrations rose a modest 1.5% to 109,125 units.
The divergence in growth rates suggests that demand remains strongest in relatively higher-value vehicle categories, while mass-market segments continue to expand at a more measured pace.
Electric Mobility Outpaces
EV registrations, meanwhile, rose to 263,989 units in May, up from 186,922 units a year earlier, translating into a robust 41.2%YoY growth. Compared with 250,851 units sold in April, EV sales were higher by 5.2% MoM, highlighting the segment’s continued momentum despite a broader seasonal slowdown in overall vehicle registrations.
The latest data underscores the increasingly important role EVs are playing in driving growth in the country’s automotive market.
The strong performance also comes against a relatively subdued base. The automobile industry entered the previous financial year amid concerns over slowing demand, elevated ownership costs and cautious consumer spending, particularly in mass-market segments. Growth remained uneven through much of the first half of the year before gaining momentum after the GST cuts during the festive season.
Industry executives had attributed the recovery in part to improving consumer sentiment, attractive promotional offers and policy support measures that helped revive demand in selected vehicle categories. As a result, retail sales strengthened considerably during the second half of the year, providing a more favourable backdrop for the current fiscal.
The rise in EV registrations also points to growing consumer acceptance of electric mobility across segments. Electric two-wheelers and three-wheelers continue to account for a significant share of volumes, supported by lower running costs and improving charging infrastructure. Fleet operators and commercial users are also increasingly adopting electric vehicles to reduce operating expenses.
Registrations of electric two-wheelers rose 58.2% YoY to 165,998 units in May. Electric passenger vehicles also continued their rapid expansion, with registrations climbing 73.2% YoY to 25,457 units from 14,699 units a year earlier. Although the category remains relatively small compared with electric two-wheelers
Electric three-wheeler registrations rose 6% YoY to 70,150 units, maintaining their position as a key pillar of commercial electrification, particularly in urban and last-mile mobility applications.