5 Auto Stocks Likely to Benefit from the Electric Car Manufacturing Scheme

To attract global auto firms to make electric cars in India, the Indian government has introduced a new scheme.

It will enable companies to import a limited number of electric cars at a lower import duty of 15%, compared to the existing duty, between 70-110%.

Companies approved under the scheme can import electric cars valued at US $35,000 or more by paying 15% duty. 8,000 units per year can be imported at this rate.

However, it comes with a condition. The lower duty can be availed of only if companies commit to investing Rs 41.5 billion (bn) in manufacturing electric cars within three years of receiving approval.

The scheme also promotes India's Make in India initiative. It mandates a minimum domestic value addition of 25% within three years and 50% within five years.

As such, these 5 companies stand to benefit from the scheme in the long run.

Let's take a look...

#1 Sona Comstar

First on the list is Sona Comstar.

Sona Comstar is one of India's leading manufacturers of precision forged differential bevel gears and differential assemblies for various vehicle segments.

The company derives 71% of its revenue from the PV segment. It has a market share of 8.8% in global differential gears and 4.4% in starter motors. Exports account for 71% of its revenue, while the remaining comes from India.

It has global clients, including 7 of the top 10 passenger vehicle (PV) manufacturers. Clients include Tata, Maruti Suzuki, John Deere, Mahindra & Mahindra, and Tesla.

Apart from this, it's also a major player in the battery-electric vehicle (BEV) segment, with 36% of its revenue coming from this segment.

The company's revenue grew 12% over the previous year to Rs 35.5 billion (bn) in FY25, thanks to a 38% increase in revenue from the BEV segment. The margins were 27.4%, leading to a 17% YoY increase in net profit to Rs 6 bn.

Looking ahead, the company's net order book stood at Rs 242 bn at the end of FY25. Of this, Rs 187 bn came from EVs.

With a strong order book and a solid position in the EV sector, Sona Comstar is poised to benefit not only from domestic manufacturing but also from after-sales services.

Check out Sona Comstar's financial factsheet and quarterly snapshot to know more.

#2 Tata Motors

Second on the list is Tata Motors.

Tata Motors, part of the Tata Group, is a leading global automobile company with strong fundamentals.

It sells passenger vehicles (PVs), utility vehicles (UVs), and commercial vehicles (CVs) in about 125 countries. It also has a presence in the premium PV market through Jaguar Land Rover (JLR).

It leads the CV segment in India and ranks third in the PV segment. Moreover, it dominates the electric vehicle (EV) segment with a 35% market share as of May 2025.

With a lower import duty, Tata Motors can import JLR models to India at a lower landing cost, which will help it gain an advantage in the luxury car segment.

With ongoing trade tensions, JLR will also shift part of its production to India, allowing it to benefit from lower costs and access to incentives under the manufacturing scheme.

The company's financials remained subdued in FY25 due to the sectoral slowdown. Revenue fell 1.3% to Rs 4.4 trillion (tn), while net profit fell 11.5% to Rs 281.5 bn.

Looking ahead, Tata Motors is betting big on a strong rebound in the EV segment as its volume fell 13% in FY25. It recently launched the EV version of the Harrier and plans to launch the Sierra, along with upgrades to its existing EV lineup, to boost demand.

It has also set an ambitious target of increasing its market share in the PV segment to 18-20% by FY30 from 13.2% in FY25.

Meanwhile, JLR faces major challenges due to the ongoing trade war. Nevertheless, it plans to invest €18 bn over five years, which will be funded entirely from internal sources.

Check out Tata Motors' financial factsheet and quarterly snapshot to know more.

#3 Hyundai Motor India

Third on the list is Hyundai Motor India.

Hyundai Motor India, part of the Hyundai Motor group, is India's second-largest PV company.

The company holds a 14% market share in FY25, lagging behind Maruti Suzuki. It's also the top vehicle exporter on a cumulative basis.

Hyundai has already expressed interest in the scheme to boost the manufacturing of electric passenger cars in India. With EV accounting for 1% of its product mix, the company could be a beneficiary.

Hyundai has contributed significantly to the localisation plan, achieving 82% value addition in FY25.

Like Tata Motors, sectoral headwinds also hurt Hyundai. Revenue fell 0.9% to Rs 692 bn, due to a fall in volumes. Meanwhile, the net profit also declined 6.9% to Rs 56.4 bn.

Looking ahead, the company aims to grow broadly in line with the industry. In FY26, it will focus on increasing exports. Exports accounted for 22% of its revenue.

Hyundai also plans to invest Rs 70 bn to drive mid to long-term growth. Hyundai's new plant in Talegaon, Maharashtra, will open in the second half of FY26.

This capacity is crucial for boosting volumes, as its existing facility is already operating at over 90% capacity.

While it expects an impact on profit before tax due to depreciation on the new plant, it aims to maintain double-digit margins, in line with the FY25 margin of 12.9%.

Check out Hyundai Motor's financial factsheet and quarterly snapshot to know more.

#4 Exide Industries

Fourth on the list is Exide Industries.

Exide is India's leading battery manufacturer, with a 50% market share in the domestic battery market.

The company has a diversified product portfolio, featuring batteries with capacities ranging from 2.5 ampere-hours (Ah) to 20,200 Ah.

As more companies adopt the scheme, Exide will benefit from increased demand for batteries.

It expects Li-ion battery demand to reach 120 gigawatt-hours (GWh) by 2030. It is expanding aggressively to capitalize on the demand. It has announced a Rs 36 bn investment in its Li-ion venture, Exide Energy Solutions.

Exide is the first company to be in the advanced stages of setting up a 12 GWh greenfield lithium-ion cell manufacturing project. Of this, 6 GWh is expected to be commercialised in the ongoing financial year.

The company has also signed a multi-year collaboration with SVOLT Technology (a leading Li-ion cell manufacturer) for Li-ion cell technology.

The company's performance in FY25 remained subdued. Revenue rose just 4% to Rs 172 bn, impacted by challenges in the infrastructure and telecom segments.

Net profit declined 9.4% to Rs 8 bn, due to high raw material costs and a write-off of slow-moving stock.

Nevertheless, the company expects a better FY26 due to improving demand and price hikes implemented between February and April 2025.

But the company expects lower margins due to investments in capacity expansion.

Check out Exide Industries' financial factsheet and quarterly snapshot to know more.

#5 Landmark Cars

Last on the list is Landmark Cars.

Landmark Cars is a multi-brand, multi-location premium and luxury auto retailer.

The company has partnerships with 10 leading brands, including Mercedes-Benz, Honda, Jeep, Citroen, Volkswagen, BYD, MG Motors, Renault, Mahindra, and Kia Motors. It manages 131 showrooms, including nine upcoming outlets.

The duty cut, along with local manufacturing, will benefit Landmark cars due to its partnership with leading electric car companies, such as BYD and MG Motors. Landmark Cars currently has 8 BYD outlets and holds a 20.8% market share in the brand's sales.

BYD, which imports its cars from China, is now planning to establish a local manufacturing facility in India.

With the reduced import duties and incentives under the new scheme, it stands to benefit significantly, and so does Landmark, given its close partnership and distribution role.

The company's revenue increased 22.4% to Rs 40.3 bn, driven by store expansion. However, net profit declined 70% to Rs 1.7 bn, due to high depreciation of new outlets and finance costs.

It's expanding rapidly with fast-growing premium brands like Mercedes, MG, and Kia. Geographically, it plans to enter emerging high-growth cities like Hyderabad, Jaipur, and Patna.

The full impact of new showrooms is expected to be reflected in FY26 and FY27.

Check out Landmark Cars' financial factsheet and quarterly snapshot to know more.

Conclusion

The new manufacturing scheme not only aims to reduce the cost of imported electric cars but also aligns with India's Make in India initiatives.

While companies have been allowed to import 8,000 vehicles at lower rates, the mandatory domestic value addition of 25% within 3 years and 50% within five years augurs well for domestic manufacturers.

As such, electric car parts and accessories suppliers like Sona Comstar and Exide are poised to benefit.

Tata Motors, Landmark Cars, and Hyundai stand to gain from increased local assembly, distribution partnerships, and a stronger electric product pipeline over time.

However, no matter how attractive the opportunity is, it's always essential to carefully analyze the company's fundamentals, corporate governance practices, and growth strategies.

Happy Investing.

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