Electric Vehicle Stocks in India (2026): Meaning, Budget Updates and Benefits

1. Tata Motors Passenger Vehicles Ltd: Tata Motors Passenger Vehicles Ltd is a wholly owned subsidiary of Tata Motors Ltd, established to house its domestic passenger vehicle and electric vehicle operations as a distinct business unit.
2. Samvardhana Motherson International Ltd: Samvardhana Motherson International Ltd is one of India’s largest auto component manufacturers and a significant player in the global automotive supply chain.
3. Hero MotoCorp Ltd: Hero MotoCorp Ltd is the world’s largest two-wheeler manufacturer by volume, with a dominant presence in the Indian motorcycle and scooter market.
4. Bosch Ltd: Bosch Ltd is the Indian-listed subsidiary of the German multinational Robert Bosch GmbH, primarily engaged in manufacturing automotive components, including fuel injection systems, starter motors, and braking solutions.
5. Bharat Forge Ltd: Bharat Forge Ltd is one of the world’s largest forging companies, manufacturing critical components for the automotive, aerospace, oil and gas, and defence sectors.

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• Customs Duty Relief for Cell Manufacturing: The Budget extended basic customs duty exemptions on capital goods required to manufacture lithium-ion cells for electric vehicles and battery energy storage systems (BESS). This lowers capital costs for setting up and expanding battery plants in India.
• Expansion of the Duty-Exempt Machinery List: The government added 35 capital goods for EV battery manufacturing and 28 for mobile phone battery manufacturing to the duty-exempt list. This aims to reduce upfront investment costs across multiple battery manufacturing segments.
• Duty-Free Recycling of Battery Scrap: Customs duty was removed on lithium-ion battery waste and scrap to support recycling and promote a circular economy. This step improves access to secondary raw materials and reduces dependence on imported inputs.
• Support for Critical Mineral Processing: Capital goods used for processing critical minerals such as lithium, cobalt, and rare earth elements received customs duty exemptions. This targets supply chain risks in battery and EV motor manufacturing.
• Rare Earth Corridors Announced: The Budget proposed dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to support permanent magnet manufacturing for EV motors and clean energy applications.
• Stronger Focus on BESS for Grid Stability: Continued duty exemptions and policy support for Battery Energy Storage Systems were aligned with renewable energy expansion, aiming to improve grid stability and make storage solutions more cost-competitive.

• EV Market Scope: India’s EV sector includes electric two-wheelers, three-wheelers, passenger vehicles, buses, charging infrastructure, batteries, auto components, and mobility technology.
• FY26 EV Sales: In FY 2025-26, India sold 25,50,865 electric vehicles across categories, with EVs accounting for 8.64% of total vehicle sales.
• 2W and 3W Adoption: Electric two-wheelers and three-wheelers lead adoption due to lower running costs, urban commuting demand, last-mile delivery, and fleet usage.
• Policy Support: The sector is supported by the PM E-DRIVE scheme, with a ₹10,900 cr outlay for electric mobility and charging infrastructure.
• EV Supply Chain: Battery manufacturing, charging networks, power electronics, motors, and auto components are becoming important parts of India’s EV supply chain.

• Rising EV Adoption: EV sales crossed 25.5 lakh units in FY 2025-26, supporting companies across vehicles, batteries, motors, components, and charging infrastructure.
• Two-Wheeler and Three-Wheeler Demand: Electric two-wheelers and three-wheelers benefit from lower running costs, urban mobility, last-mile delivery, and fleet demand.
• Policy Support: PM E-DRIVE supports e-2Ws, e-3Ws, e-ambulances, e-trucks, and public charging infrastructure through targeted incentives.
• Charging Infrastructure Growth: India had 27,737 EV chargers by March 2026, improving the support network for electric two-wheelers, cars, buses, and fleets.
• Battery Manufacturing Opportunity: The ₹18,100 cr ACC battery PLI scheme supports domestic battery manufacturing, energy storage, battery packs, and EV supply chains.

• High Valuation Risk: Many EV stocks are priced to reflect future growth expectations, so weaker sales, earnings, or order inflows can undermine valuations.
• Policy Dependence: EV demand is influenced by subsidies, state incentives, GST treatment, registration benefits, and charging infrastructure support.
• Battery and Raw Material Risk: Lithium-ion cells, semiconductors, rare earth materials, and imported components can affect costs, margins, and production timelines.
• Charging Infrastructure Gap: Charger availability, utilisation, grid readiness, and location quality remain key challenges, especially for four-wheelers and commercial EVs.
• Competition and Execution Risk: Legacy automakers, startups, battery makers, and charging players face risks from technology upgrades, warranty costs, battery safety, and scale-up execution.

• EV Category Exposure: EV-linked companies may operate across two-wheelers, passenger vehicles, buses, batteries, chargers, software, power electronics, or auto components. Each segment has a different adoption rate and margin profile.
• Sales Growth and EV Penetration: EV adoption varies across vehicle categories. Company performance can depend on whether growth comes from electric two-wheelers, passenger EVs, buses, or commercial EVs.
• Battery and Component Supply Chain: Batteries account for a major share of EV costs. Lithium prices, cell imports, localisation, battery pack technology, motors, controllers, and power electronics can affect profitability.
• Policy and Incentive Support: EV demand is influenced by subsidies, localisation norms, charging infrastructure support, and schemes such as PM E-DRIVE and the ACC battery PLI scheme.
• Competition and Profitability: EV companies face competition from ICE vehicles, hybrids, CNG models, and other EV players. Pricing pressure, warranty costs, scale, capacity utilisation, and after-sales performance can affect margins.