Tata Motors to M&M, weak rupee squeezes margins for electric vehicle makers

Taking into account that the localisation level in most of these vehicles is low, at less than 50 per cent, the impact of a weak rupee is high due to high import content

The sharp and unexpected depreciation of the rupee (against the dollar) has come as a shock to the domestic electric vehicle industry, especially companies such as Tata Motors, M&M and BYD-Goldstone, which won large orders in tenders for electric cars and buses.

These orders were awarded between September 2017 and February 2018, when the Indian currency was stable at around Rs 65 against the dollar. It has depreciated by over 11 per cent since then. Supplies of these vehicles are being done in a phased manner and are yet to be completed.

Taking into account that the localisation level in