Mahindra & mahindra (M&M), one of India’s leading automakers, saw its
shares fall sharply on Tuesday, following news of a
proposed increase in taxes on luxury electric vehicles (EVs).
1. Market Movement Today
M&M shares slipped
2.40% to Rs 3,235.90 on the NSE.The stock lost nearly
Rs 80 from its previous close of Rs 3,315.40, reflecting investor concerns over policy changes.The company’s
market capitalization stands at Rs 3.87 trillion, while its
52-week range is Rs 2,425 to Rs 3,432.This decline highlights
market sensitivity to potential regulatory shifts affecting premium EVs.
2. Proposed GST Increase on Luxury EVs
According to government documents reviewed by
Reuters, the panel has recommended:Raising the
GST on EVs priced between Rs 20 lakh and Rs 40 lakh from 5% to 18%.Imposing
higher consumption taxes on EVs priced above $46,000 (approx. Rs 38 lakh).The rationale behind the proposal:
these luxury EVs are primarily used by the upper segment of society, and higher taxes could generate additional revenue.
3. Impact on M&M’s EV Portfolio
If implemented, the tax hike could
significantly impact mahindra & Mahindra’s premium EV lineup, including:
Born Electric range of high-end electric SUVs
Upcoming luxury EV models in developmentPlanned expansion of
EV manufacturing and market presenceAnalysts warn that higher GST rates could
temper demand for premium electric vehicles, potentially slowing adoption among high-income buyers.
4. Afternoon Trading Highlights
Shares
fell sharply in afternoon trade, losing investor confidence due to regulatory uncertainty.The decline underscores the
market’s sensitivity to policy changes affecting the EV sector.Investors are closely watching for
official government announcements to gauge the actual impact on sales and revenue.
5. M&M’s Position in India’s EV Landscape
Mahindra & mahindra has been
aggressively investing in electric mobility, focusing on:
High-performance electric SUVsLuxury EVs under the Born Electric rangeExpanding EV technology, R&D, and manufacturing capabilitiesThe company’s strong foothold in the EV sector makes it
vulnerable to policy-driven price adjustments for premium models.
6. Broader Implications for the EV Industry
The
proposed tax hike reflects a broader government approach to
revenue generation from high-end EVs.Premium EV manufacturers like M&M, Tata Motors, and others may see
reduced demand for expensive models.At the same time,
affordable EVs may remain largely unaffected, sustaining mass-market adoption.
7. Investor Takeaways
Short-term market reaction: M&M shares have experienced a
2.40% dip.Long-term outlook: Potential
policy shifts could influence premium EV sales, but M&M’s overall EV strategy remains strong.Investors are advised to
monitor government notifications and company updates for clear guidance.
Bottom Line
The
proposed EV tax hike triggered a notable drop in mahindra & mahindra shares, highlighting the
sensitivity of premium EV stocks to policy changes. While higher taxes could impact demand for luxury models, M&M continues to
invest heavily in India’s electric mobility future, aiming to lead in the evolving EV sector.