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Budget 2025 Boosts EV Adoption; Auto Stocks Like Maruti Suzuki Gain

Written by: Team Angel OneUpdated on: Feb 1, 2025, 3:43 PM IST
The Union Budget 2025 has boosted EV adoption with key incentives for solar PV cells and battery manufacturing, driving gains in select auto stocks like Maruti Suzuki.
Budget 2025 Boosts EV Adoption; Auto Stocks Like Maruti Suzuki Gain
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Auto stocks surged on February 1, 2025, following the Union Budget 2025, which introduced measures aimed at accelerating electric vehicle (EV) adoption and strengthening infrastructure. Finance Minister Nirmala Sitharaman unveiled several initiatives to develop an ecosystem for solar PV cells and EV batteries, bolstering investor sentiment and driving gains across major auto stocks.

Maruti Suzuki Leads Gains Amid EV Plans

Maruti Suzuki’s share price rallied over 6%, benefiting from the Budget’s EV-focused incentives. The automaker is set to launch its first electric vehicle, the E-Vitara, under its premium NEXA brand in 2025. With a projected range of over 500 km and advanced safety features, Maruti’s entry into the EV market has heightened investor confidence. The stock also saw positive momentum from a 6.5% rise in January sales.

Mahindra & Mahindra Benefits from Local Battery Incentives

Mahindra & Mahindra (M&M), the best-performing Nifty 50 auto stock of 2024, gained over 3% by 2:13 PM, buoyed by incentives for local battery manufacturing. M&M’s focus on electric SUVs has kept the stock in an uptrend, further supported by 18% growth in domestic sales and nearly doubled exports in January. Hyundai Motor India also saw a 2% increase, expected to gain from similar Budget-driven advantages.

Tata Motors Faces Pressure Despite EV Leadership

While Tata Motors, India’s largest EV maker, has led the market in electric mobility, its stock declined over 1% following a dip in January sales. Despite its dominance in the sector, factors such as high battery costs and supply chain constraints continue to pose challenges.

Government’s E-Drive Scheme and Policy Outlook

The Prime Minister’s E-Drive scheme, backed by an ₹109 billion outlay, underscores India’s commitment to expanding EV adoption. The scheme aims to strengthen domestic EV manufacturing and charging infrastructure. However, obstacles such as high battery costs, reliance on imported components, and an inadequate charging network remain key concerns.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing

Published on: Feb 1, 2025, 3:43 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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