Panel flags EV gaps, backs incentives; Nomura sees gains for Ather, M&M

A Parliamentary Standing Committee on Industry has recommended extending demand incentives for electric two- and three-wheelers until March 2028, while also proposing targeted consumer subsidies for electric passenger vehicles to address affordability challenges.

The recommendations are part of the committee’s 332nd report on the Ministry of Heavy Industries’ FY27 demands for grants. In a note analysing the findings, Nomura said the proposed measures could accelerate EV adoption while improving the outlook for select OEMs and component makers.

EV adoption remains uneven across segments

The committee noted that EV adoption in India remains skewed towards two- and three-wheelers, with limited progress in electric buses, trucks and ambulances. It has recommended continuing incentives for high-adoption segments under the PM E-DRIVE scheme through 2028, along with restoring targets for electric three-wheelers such as e-rickshaws and carts.

For slower segments, the panel has called for stricter implementation timelines, including faster deployment of electric buses post tender finalisation and a more structured rollout of electric trucks and ambulances.

A key recommendation is the introduction of demand-side incentives for electric passenger vehicles. The committee highlighted that while supply-side support exists, high upfront costs continue to limit EV car adoption. It has proposed a targeted, time-bound incentive framework linked to parameters such as battery capacity, efficiency and price caps. Nomura said such incentives could improve ownership economics and reduce the breakeven distance compared to internal combustion engine vehicles.

On the manufacturing front, the committee flagged concerns around the execution of the Production-Linked Incentive (PLI) auto scheme. It noted inconsistent utilisation and repeated revisions from budget estimates to revised estimates in the early years. The panel has recommended pipeline-based budgeting linked to verified claims, and flagged that current eligibility thresholds may be too stringent for emerging EV manufacturers.

Ather, M&M, Tata Motors and suppliers seen as beneficiaries

To address this, it has proposed more flexible or differentiated eligibility criteria to enable participation from high-potential startups without diluting financial safeguards. Nomura said a relaxation could benefit Ather Energy, which currently falls outside the PLI framework, with incentives potentially supporting product development and technology investments.

The brokerage also highlighted that faster EV adoption would benefit component suppliers such as Sona BLW Precision Forgings (Sona Comstar) and Uno Minda, while OEMs, including Tata Motors Passenger Vehicles and Mahindra & Mahindra, could gain from stronger EV demand.

The committee also flagged gaps in charging infrastructure, citing limited support for private and commercial charging networks, and called for a revised subsidy framework to encourage private participation. It further highlighted underutilisation in the PLI scheme for advanced chemistry cell battery storage, recommending closer monitoring and better alignment of budget allocations.

Nomura said implementation of these measures could accelerate EV adoption in India while strengthening the domestic manufacturing ecosystem.

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