New Delhi, April 30 -- The expiration of electric vehicle (EV) subsidies in four key states, which together fueled over a third of India's EV sales in FY26, is creating a new hurdle for carmakers. These state-level incentives were critical in making EVs price-competitive with traditional internal combustion engine (ICE) vehicles, according to a review of state policies and an industry executive aware of the matter.

Worryingly for EV makers, Karnataka and Madhya Pradesh have also introduced fresh taxes on EVs in the past month, which experts believe could further dampen sales momentum in these markets.

The developments follow a blockbuster year for the industry, with EV sales surging 84% in FY26 to nearly 200,000 units, according to data...