New Delhi, February 25 India's electric transport sector has attracted massive capital inflows over the past five years, but the industry needs a cohesive investment framework to achieve its 2030 goals, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
By 2030, India aims to have electric vehicles (EVs) account for 30 per cent of all private cars, 70 per cent of commercial vehicles, 40 per cent of buses, and 80 per cent of two- and three-wheelers.
IEEFA's report, 'Capital Flows in India's Electric Transport Sector', provides the first consolidated view of realized investments from 2020-2025, identifies investment gaps, and outlines pathways to mobilize capital for the next phase of the nation's electric transport transition.
Based on an in-depth analysis of capital flows, the authors estimate that approximately Rs 2.23 lakh crore was deployed across the three core nodes of India's electric transport ecosystem from 2020-2025. Manufacturing capacity accounted for the largest share, followed by public subsidies and incentives, and EV charging infrastructure.
"While Rs 2.23 lakh crore is a significant capital mobilization in just five years, it represents only about 18 per cent of the Rs 12,50,000 crore required by 2030," said co-author Subham Shrivastava, a Climate Finance Analyst at IEEFA.
"Mobilizing the remaining Rs 10.2 lakh crore by 2030 will require systemic financing reforms," he added.
A breakdown of the investments shows that internal accruals accounted for the largest share of realized EV manufacturing investment, Rs 1.59 lakh crore, followed by debt exceeding Rs 36,000 crore and equity exceeding Rs 6,400 crore.
This aggregate pattern, however, masks meaningful variation across vehicle segments, where the balance between internal funding and external capital reflects differences in market structure, capital intensity, and firm composition.
For instance, the electric three-wheeler segment – characterized by a highly fragmented OEM base – relied predominantly on internal accruals and some debt, whereas segments such as electric four-wheelers and two-wheelers, led by more established incumbents, exhibited a relatively more diversified financing mix.
"From 2020–2025, electric three-wheelers attracted the largest share (78 per cent) of investments among vehicle segments, due to the segment's maturity and commercial-scale operations, along with its fragmented OEM base," said co-author Saurabh Trivedi, a Sustainable Finance Specialist at IEEFA.
"However, recent investment announcements in 2024 and 2025 reveal a shift towards electric four-wheelers, driven by rising demand for electric cars," he added.
