July 2025 looked like a turning point: electric vehicles accounted for over 5 per cent of new registrations in India, about 179,000 new EVs that month, a clear signal that buyers and manufacturers are finally moving in the same direction.
That national moment is real and worth the cheer. But how those EVs live and die across India’s very different geographies, financial markets, and informal economies will determine whether this is a revolution or a pricey fad.
Why The Second-Hand Market Is The Crucible
India’s used-car market is massive (tens of billions of dollars) and is where most vehicles spend the bulk of their lives. If used EVs do not hold their value, buyers will factor that into purchase decisions, lenders will tighten terms, and the entire adoption curve could flatten. Organised market reports estimate India’s used market at tens of billions today and growing fast.
But EVs are different from petrol cars: the battery often represents a very large share of the vehicle’s economic value. That single component turns resale into a dice roll: a perfect body with a tired battery is worth a small fraction of a well-maintained ICE car.
The Resale Value Mirage
The biggest open secret in India’s EV market? Resale value. Even Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles, admits, “There are multiple reasons why mainstream buyers are still not coming forward to buy an EV and resale value is one of them.”
And the numbers sting. According to Spinny and CARS24, if you buy an EV in 2023 and try to resell it today, it has already lost around 23% of its value. Compare that with a 2020 EV, its value has fallen by 46%, worse than the 40% depreciation seen in a petrol/diesel car of the same vintage. In short, your EV isn’t just silent on the road, it’s also silently wiping out your savings in the resale market.
How Do Batteries Age?
Under mild conditions, many batteries lose about 1–2 per cent of their capacity per year. However, in hot climates and with frequent rapid charging, degradation can accelerate markedly. Industry data and lab studies show that losses under such stress can occur materially faster. In short: “one-size-fits-all” depreciation doesn’t work for EVs.
That variance is the problem. Two identical three-year-old cars can be worth very different sums depending on whether the battery was fast-charged outdoors in Chennai or trickle-charged overnight in a shaded parking lot in Jammu. Banks, insurers, and used-car platforms struggle to price that uncertainty.
BluSmart And The Risk Of Fire Sales
When fleet operators fail, the second-hand supply can flood the market. The BluSmart insolvency and repossession of EVs in 2025 is a case in point: lenders rushed to offload thousands of cars, creating sudden downward pressure on prices and exposing how immature EV price discovery is. That is the kind of shock that can destroy residual-value expectations overnight.
If financiers expect a sudden glut of off-lease EVs with uncertain battery health, they mark down residuals and cut loan-to-value ratios, which in turn makes new EVs more expensive on monthly payments and deters mainstream buyers.
Kerala’s Monsoons And Karnataka’s Waterlogging
Kerala’s monsoons and sudden floods in parts of Karnataka flood car parks and chargers; saltwater immersion is particularly hazardous for lithium-ion packs and has been linked to fires in post-flood situations elsewhere. Flooded charging infrastructure becomes unusable, and submerged batteries can develop hidden faults that pose fire risks later. That undermines confidence in EVs precisely when resilient mobility is most needed.
As automobile engineer S. T. Ravichandran warns, “The main risk is poor battery quality… grey-market sellers use recycled lithium-ion cells with weak thermal control. This raises the chances of overheating and fire.”
In fast-developing cities such as Bengaluru, intense waterlogging has already disrupted traffic and infrastructure. If owners fear flood damage or insurance hassles after water exposure, they delay purchases, which is bad news for scaling EV adoption beyond affluent, low-risk neighbourhoods.
Leh, Ladakh, And Kashmir Are A Different Problem
High altitude and cold climates do not reduce EV adoption because of intake losses (that’s an ICE problem); they create battery and infrastructure headaches. Cold drains usable range, slows charging, and forces thermal management systems to work harder, cutting practical kilometres per charge. In Leh or high passes, range on paper can quickly become optimism on the tarmac.
On top of that, chargers and maintenance services are sparse in remote regions. A community that used to rely on a single fuel pump now needs reliable grid upgrades or solar+battery charging hubs; otherwise, EVs remain a risky niche for local people and travellers.
Lithium, Supply Chains, And The Price Of Replacement Packs
India is attracting big manufacturing bets, yet domestic refining of lithium and battery-grade materials remains nascent; the country still depends heavily on global supply chains. If lithium prices spike or imports are disrupted, replacement battery costs rise, and the economics of used EVs collapse. That makes it harder to build a durable second-hand market.
This is solvable, but it’s a big industrial job: scale domestic processing, invest in cell production, and build circular recycling so spent packs become feedstock, not landfill.
Honda, at least, is honest. The company admitted to Times of India: “It is difficult for us to guarantee an EV battery if customers retain it for long. That is why Honda is prioritising battery swapping, which can mitigate longevity issues.”
Also Read: How Did Dubai Become A Graveyard For Supercars?
Financing, Insurance, And The Opaque Risk Premium
Lenders and insurers love predictability. Residual-value uncertainty for EVs produces higher rates, shorter tenures, and lower loan-to-value ratios. That directly hits the middle-class buyer who budgets monthly payments, not total cost. Without standardised battery SoH certificates, banks will treat EV loans as risky and demand higher premiums. (Yes, politics and climate goals are lovely, but pocketbook calculus wins.)
Insurance is no kinder: declared values fall if the battery is suspect, and claims become messier. The combined result is a less attractive total-cost-of-ownership picture than headline “lower running cost” claims suggest.
Cheap Scooters, Unsafe Packs, And Moral Hazard
Where official supply chains and warranties are expensive, informal markets rush in. The Times of India reports that Tamil Nadu has seen a flood of unregistered, ultra-cheap electric two-wheelers, many exploiting loopholes and using poor battery packs that are fire risks and cannot be insured. That undercuts organised firms, damages public confidence, and shifts risk into the informal sector.
Cheap is tempting. But cheap things that skip registration, insurance, and basic safety are not green; they’re fragile and dangerous. Policy needs to slam the loopholes shut and make safety non-negotiable.
Policy Fixes That Can Change The Mechanics (Not Just The PR)
Fixes are concrete: mandatory, tamper-proof State-of-Health certificates at sale and transfer; transferable OEM battery warranties; standards for charger siting in flood-risk zones; incentives for domestic refining and recycling; and subsidies targeted at mass market vehicles and rural charging, not just luxury launches. That combination would reduce uncertainty, shrink the grey market, and make second-hand values credible.
The July milestone was a genuine moment to celebrate, but it is the second life of these cars that will decide whether India’s EV story becomes a durable chapter or a flashy footnote. Resale value, regional realities, supply-chain brittleness, and informal markets are the real battlegrounds.
Fix those, and the headline numbers will follow. Ignore them, and we’ll have a lot of shiny, short-lived vehicles and a new problem: expensive batteries in scrapyards.
Images: Google Images
Sources: The Economic Times, Times of India, FinShots
Find the blogger: Katyayani Joshi
This post is tagged under: electric vehicles india, ev revolution, ev resale value, ev battery life, ev in kashmir, ev in kerala, ev in leh ladakh, india auto industry, battery swapping india, green mobility india, fintech for evs, climate action india, ev adoption challenges, indian monsoon floods, ev policy india, lithium battery crisis, future of transport india, ev resale market, sustainable mobility india, make in india evs, ev safety india, electric scooter india, tata evs, honda evs, grey market evs
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