Union Budget 2026: Tata Motors Seeks Incentives for Entry-level EVs

Ahead of the Union Budget 2026, Tata Motors has reportedly asked the government to consider incentives for entry-level electric vehicles, saying the segment continues to face pressure, as per PTI report.  

The company said that while passenger vehicle sales have improved overall, lower-priced electric cars have not seen the same recovery. 

Policy Changes Supported Overall Vehicle Demand 

In an interaction with PTI, Tata Motors Passenger Vehicles Managing Director and CEO Shailesh Chandra said several policy measures over the past year helped improve demand across the passenger vehicle market. These included changes under GST, reductions in repo rates and revisions to the tax regime. 

According to the company, these steps supported demand for petrol and diesel vehicles. However, the impact on entry-level electric cars has been limited, with buyers continuing to focus on upfront costs. 

Petrol Car Prices Narrow the Gap 

Tata Motors said GST-related changes have led to a reduction in petrol car prices. This has reduced the price gap between petrol vehicles and electric cars at the entry level, making it harder for electric models to compete. 

The company said this has added to the pressure on affordable electric vehicles, particularly in segments where buyers are highly price sensitive. 

Fleet Electric Vehicles Highlighted 

The automaker has also asked for electric cars used in fleet operations to be included under the PM E-DRIVE scheme. Fleet EVs make up about 7% of total passenger vehicle sales but account for nearly 33-35% of passenger kilometres travelled. 

Electric vehicles used by fleets were covered under the earlier FAME-II scheme but are not part of PM E-DRIVE. Tata Motors said fleet vehicles typically run much longer distances than privately owned cars. 

Input Costs and Pricing Outlook 

On costs, the company said higher commodity prices and foreign exchange movements have had an impact of around 2% on revenues. Most of this increase has not yet been passed on to customers. 

Tata Motors said it has taken some internal cost control measures and is still deciding the timing and extent of any price increases. Several automakers have already announced vehicle price hikes in recent weeks, citing similar cost pressures. 

Tata Motors Share Price Performance  

As of January 19, 2026, 9:55 am, Tata Motors Passenger Vehicles share price was trading at ₹343.15, a 2.96% decrease from the previous closing price. 

Read More: Tata Motors Subsidiary Acquires 26% Stake in Traveltime E-Mobility! 

Conclusion 

As the Union Budget 2026 approaches, Tata Motors has sought policy support for entry-level electric cars and fleet electrification, while pointing to ongoing cost pressures affecting the passenger vehicle market. 

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