Delhi EV Policy impact: Auto stocks skid; Eicher dips 7%, Ather at new high

Delhi EV Policy Impact: Bharat Forge, Hero MotoCorp, Bajaj Auto, Uno Minda, Sona BLW Precision Forgings and Samvardhana Motherson International were down in the range of 1 per cent to 5 per cent.

Auto shares price movement

 

Shares of automobile companies were under pressure, falling up to 7 per cent on the National Stock Exchange (NSE) in Tuesday’s intra-day deals after the Government of Delhi approved the new electric vehicle (EV) policy aimed at accelerating electric mobility adoption in the capital.  At 09:32 AM, the Nifty Auto index was down 1.2 per cent, as compared to 0.22 per cent decline in the Nifty 50. In the past two trading days, auto index slipped 3.25 per cent.

 

Among individual stocks from the Nifty Auto index, Eicher Motors, parent of Royal Enfield, global leader in the middleweight motorcycles segment (250cc - 750cc), plunged 6.5 per cent. The stock price of Bharat Forge declined 5 per cent. Hero MotoCorp, Bajaj Auto, Uno Minda, Sona BLW Precision Forgings and Samvardhana Motherson International were down in the range of 1 per cent to 3 per cent.

 

 

Meanwhile, the share price of Ather Energy hit a new high of ₹1,125, surging 4 per cent on the NSE in intra-day deals. Thus far in the calendar year 2026, the stock price of the EV 2W company zoomed 49 per cent, as against 8.7 per cent decline in the Nifty 50.

 

Delhi announces new EV policy from July 1

 

The Delhi government on Monday announced that it will stop fresh registrations of internal combustion engine (ICE) two-wheelers (2Ws) and three-wheelers (3Ws) over the next two years, leaving major automobile (auto) makers scrambling amid fears that other states could follow suit and force them to redraw product launch plans and investment strategies.

 

The Delhi government approved the EV policy (EV Policy 2.0), aiming to significantly accelerate EV adoption while strengthening the supporting infrastructure across the state. The policy will come into effect from July 1, 2026 and will remain applicable until March 31, 2030.

 

The Government is mandating that only electric auto-rickshaws can be registered from January 1, 2027 and only electric two-wheelers from April 1, 2028. The policy also offers scrapping incentives of up to ₹1 lakh for BS-IV cars, subsidies for electric two- and three-wheelers, excludes hybrid vehicles from incentives, and is expected to spend nearly ₹15,000 crore over the next four years. 

 

The policy also offers purchase incentives for electric 2Ws (up to ₹30K in the first year, calculated at ₹10K per kWh and capped at that level, reducing to ₹20K and then ₹10k in subsequent years), auto-rickshaws (fixed incentives of ₹50K in the first year, tapering to ₹40K and ₹30K over the next two years). 

 

Brokerages view on auto sector

 

Delhi launched the first phase of its EV policy in 2020 which helped boost the share of electric models to 12 per cent of all new vehicle sales in 2024. This policy is more comprehensive than earlier ones, say reports, making it a strong long-term demand catalyst for EV makers such as Tata Motors, Mahindra, Ola Electric, Ather and e-three-wheeler manufacturers. Incentives for sub-₹30 lakh EV cars can expand mass-market adoption, while mandatory electrification of 2Ws, autos and fleets creates a structurally large replacement opportunity, ICICI Securities said in a note.

 

However, the ban on the sale of fossil fuel 2Ws from 2028, is negative for manufacturers such as Bajaj Motors, TVS, etc., which may be offset by increased sales of their electric 2Ws. According to Vahan Database, in FY26, Delhi share in domestic 2W registration stands at 2.7 per cent while share in total EV registrations stood at 3 per cent, the brokerage firm said.

 

Analysts at Nomura said, the approval of Delhi EV Policy 2.0 strengthens the long-term structural EV adoption story in India. EV penetration in India is reaching an inflection point. This policy further reinforces that view that government policies are increasingly focusing on faster EV adoption. Large investment in charging infrastructure is a key long-term positive, the brokerage firm said. 

 

Analysts note that hybrids have not been given any incentives under this policy. Beyond Delhi, Nomura believes the policy could act as a blueprint for large states to introduce comparable EV policies.

 

In particular, Royal Enfield may be more impacted due to this policy due to its higher Delhi exposure and very low EV mix potential. In addition, CAFE norms for EV 2Ws may also impact it the most. One concern though may be availability of enough EV capacity by 2027, the brokerage firm said. It also views the policy as positive for suppliers such as Sona Comstar, Motherson Sumi and Uno Minda given their EV component exposure.  ===============================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.