Auto stocks are under pressure with individual scrips ending up to 4 percent lower on June 24 after the government think-tank NITI Aayog gave the industry a deadline of two weeks to come up with a plan to switch to electric vehicles.
The government intends to ban internal-combustion powered two and three-wheelers by 2023 and 2025, respectively. NITI Aayog has proposed to prepare a framework to phase out the sale of diesel and petrol vehicles by 2030.
Nifty Auto ended half a percent in the red with 2 and 3-wheeler stocks falling the most. The top losers included TVS Motor Company, Bajaj Auto, and Hero MotoCorp.
The other losers from the auto space included Motherson Sumi Systems, Eicher Motors, Bharat Forge, Exide Industries and Amara Raja Batteries. However, Mahindra & Mahindra closed in the green, up over 1 percent.
Automakers, allegedly, opposed the proposal and warned that a sudden transition, at a time when auto sales have slumped to a two-decade low, would cause market disruption and job losses.
Hero MotoCorp, Bajaj Auto and TVS Motor Company along with the lobbying body the Society of Indian Automobile Manufacturers (SIAM) have criticised the proposal in unison, stating that six years is too short a period for making the transition.
Minoru Kato, President and CEO, HMSI, said, “As of today we can say that 2025 is too short a target to switch over to 100 percent electric. We need to talk to the government and SIAM.”
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