Shares of Mahindra & Mahindra and Tata Motors slipped in Monday’s trade, falling as much as 3% intraday, after reports emerged of a proposed sharp hike in taxes on electric vehicles (EVs).
According to a Reuters report, an Indian tax panel has recommended raising the GST rate on EVs priced between ₹20–40 lakh (approximately $24,000–$46,000) from the current 5% to 18%. The panel justified the move by arguing that such EVs are largely consumed by the “upper segment of society” and therefore merit a higher tax slab.
If implemented, this 13% hike could push EV prices higher by nearly ₹2.6–₹5.2 lakh per unit, significantly impacting demand. Analysts believe this would particularly affect manufacturers like Mahindra and Tata Motors, who have been pushing aggressively into the EV segment.
The news rattled investors, triggering a sell-off in auto counters. Mahindra & Mahindra shares fell over 2.5% to ₹3,235, while Tata Motors declined nearly 2% to ₹684. Both stocks extended losses through the afternoon session as traders digested the implications of the proposed tax changes.
The recommendation comes at a time when India is trying to accelerate EV adoption, and market watchers noted the proposal could act as a setback to the government’s electrification push. For now, investors are awaiting clarity on whether the GST Council will adopt the panel’s recommendations in its upcoming meetings.
