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’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 (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.
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.
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.
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Published on: Feb 1, 2025, 3:43 PM IST
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