ICE roars back as tax cuts, festive discounts skip EVs

EV sales rose in Oct, but share of sales plunges as more vehicles were sold overall

- Ayaan Kartik

There’s an interesting twist in this story, though perhaps not entirely unexpected. As buyers thronged showrooms in the thousands to snap up petrol and diesel cars after steep GST (goods and services tax) cuts in October, electric vehicles—which didn’t get a tax break—ended up as collateral damage.

Data released by the country's top dealers’ body, Federation of Automobile Dealers Associations (Fada) on Friday showed that during the month, the total share of EVs sold—across scooters, bikes and cars—fell to its lowest level in the current financial year.

The share of electric two-wheelers sold dropped to-4.56% in October from 8.09% in September, while electric four-wheelers fell to 3.24% from 5.12%. These are the lowest levels in months—last seen at around 4% for two-wheelers in April 2024.and 3% for four-wheelers in February 2025.

Conversely, the share of conventional fuel or ICE (internal combustion engine) vehicles sold increased sharply in October compared to September—from 91.71% to 95.31% for two-wheelers, and from 65.61% to 68.1% for four-wheelers.

In September, the GST Council cut taxes for ICE two-wheelers and four-wheelers from 28% to 18% for many categories. However, EVs, which were already taxed at a low 5%, were left untouched. That decision also narrowed the price gap between EVs and ICE vehicles significantly.

Apart from passing on the GST rate cuts, leading automobile companies topped that with additional festive season discounts between Navratri and Diwali, making a strong case for buyers to opt for these vehicles.