Tata Motors, M&M, Hyundai Motor Shares Decline By Up To 6 Per Cent Ahead Of New EV Policy Launch

Shares of major automotive manufacturers such as Hyundai Motor India Ltd, Mahindra & Mahindra Ltd and Tata Motors Ltd declined up to 6 per cent on the NSE on February 21. The stocks declined following reports which claimed that the government is considering easing its policy for the import of Electric Vehicles (EVs). The entry of foreign players may increase competition for domestic EV manufacturers.

A report by the Times of India said that the Centre will notify the new electric vehicle (EV) policy, soon. As a part of the policy, the government may also consider reducing the import duty on EVs.

Apart from the reduction in import duties the government may also consider relaxing the norms which control the entry of foreign electric vehicle makers in India. India’s EV policy has been protective of the nascent domestic vehicle industry. However, a relaxation of norms would indicate a shift in policy aimed at bringing foreign players to Indian markets.

Hyundai Motor India, Mahindra & Mahindra and Tata Motors dominate the electric four-wheeler market. In 2024, Tata Motors had the largest market share among all electric car makers at 62 per cent. Other key players in the four-wheeler electric vehicle space include MG Motor India and Citroen.

Shares of Hyundai Motor India Ltd fell by 2.54 per cent to trade at an intraday low of Rs 1806.05 apiece and Tata Motors stock declined by 2.48 per cent to trade at an intraday low of Rs 672.65 apiece on the NSE. Mahindra & Mahindra shares declined the most, falling 6.55 per cent to Rs 2653.35 apiece on the NSE.

Earlier on February 1, Finance Minister Nirmala Sitharaman announced that the Basic Customs Duty (BCD) on fully built EVs which cost more than $40,000 has been reduced to 70 per cent.

Other relevant exemptions for electric vehicle manufacturers included the removal of the 10 per cent Social Welfare Surcharge (SWS) which has resulted in an effective import duty of 110 per cent for EVs above the $40,000 price point. EVs that cost less than $40,000 attract a 70 per cent import duty.

At the time of writing this story, shares of Mahindra & Mahindra traded at Rs 2,674.75 apiece, down by 5.8 per cent on the NSE. Stocks of Hyundai Motor India traded at Rs 1,801.95 apiece, down by 2.77 per cent and shares of Tata Motors traded at Rs 676.65 apiece down by 1.91 per cent.