From Tata Motors To M&M: Brokerages See No Immediate Risk From New EV Policy
The government has announced a new EV policy that's aimed at attracting global players to make and sell electric cars in India.
While the new electric vehicles policy will boost domestic auto component makers, brokerages see no risks for the likes of Tata Motors Ltd. and Mahindra & Mahindra Ltd. for the time being.
The new policy does not make a case for the competition for current models to increase. However, it does make the competitive landscape tougher for forthcoming electric cars from Indian original equipment manufacturers, Citi Research said in a report dated March 17.
From the entry of the likes of Tesla, domestic auto component makers like Sona Comstar and Motherson Sumi Wiring India Ltd. stand to gain. The policy will promote investments in the electric vehicle auto components ecosystem and charging infrastructure, according to Nomura Research.
Last week, the India government announced a new EV policy that's aimed at attracting global players to make and sell electric cars in India.
With the government cutting the incentives for the electric two-wheelers, Jefferies India Pvt. sees prices rising up to Rs 12,000. It said policymakers prefer incentives for manufacturing/capability over demand creation.
Higher subsidies boosted EV sales from 0.4% in financial year 2021 to 5% in the second half of the last fiscal, Jefferies said in a report on March 17. "Two-wheeler demand continues to shift towards EV at gradual pace."
Here's What Brokerages Say
Citi Sees Tougher Competition
No risks for the likes of Tata Motors and Mahindra & Mahindra for the time being.
New EV policy makes the competitive landscape tougher for future electric cars by Tata Motors, M&M.
Indian OEMs will need to offer an attractive value proposition to premium EV buyers.
New EV policy is likely to result in attractive opportunities for some of the Indian auto parts makers.
Boost For Auto Component Makers, Says Nomura
Auto component makers — Sona Comstar, Motherson Sumi and others — stand to benefit from the entry of the likes of Tesla.
New EV policy to support the entry of Tesla in India, some other global OEMs.
The policy will promote investments in the EV auto components ecosystem, charging infra.
Entry of Tesla may help to build aspirations for EVs in India.
Jefferies Sees Rise In Two-Wheeler EV Prices
Higher subsidies boosted EV sales from 0.4% in fiscal 2021 to 5% in the second half of fiscal 2023.
Two-wheeler demand continues to shift towards EV at a gradual pace.
Share of EVs in two-wheeler sales rebound at 4–6% over two years.
Electric two-wheeler prices are estimated to rise in the range of Rs 7,000–12,000.
Maximum incentives to 3.33 lakh units, similar to registrations in November to February.
Production-linked incentives can help cushion reduced FAME incentives.
Policymakers prefer incentives for manufacturing/capability over demand creation.
