With an uptick in solar rooftop installation, market leader Tata Motors has seen an increase in electric vehicle penetration in tier 2 and tier 3 cities in 2024-25. 

Tier 2 cities contribute more than 50 per cent of the electric vehicles sales while tier 3 cities contribute 18 per cent of the sales. Earlier in 2021, two and three-tier cities together contributed 43 per cent of the company’s electric vehicle sales while tier 1 contributed to 57 per cent of sales

“This shift reflects the growing appeal of EVs across diverse geographies, driven by multiple factors reshaping rural and smaller city landscapes. The availability of space in rural areas simplifies the installation of home chargers, reducing dependence on public infrastructure. The government subsidies offered on rooftop solar installations further enable users to run their EVs at virtually no cost,” said Vivek Srivatsa, Chief Commercial Officer, Tata Passenger Electric Mobility to businessline. 

The price gap between electric and ICE vehicles has made the rural consumers cost-conscious.

“With the Curvv. ev and the Nexon.ev we have successfully established purchase price parity compared to their equivalent ICE counterparts. Cell prices, which form the core component of EV battery packs, have stabilised after seeing a sharp decline and no significant price correction of cell prices is expected in the future,” he added. 

businessline had earlier reported even as the demand for electric vehicles dipped during the first quarter of FY25, a survey conducted by Tata Motors revealed that 36 per cent of customers have let go of their ICE vehicles while 75 per cent of customers use electric vehicles as their primary vehicle.

Further, the company had also seen an uptick in sales in the rural market with contribution standing at 40 per cent as compared to 32 per cent pre-coronavirus with increased CNG and electric vehicle sales.