Shares of passenger car manufacturers have experienced heightened volatility in recent days, but analysts predict that intensifying competition in India’s electric vehicle (EV) race will reshape the performance of these automakers on the bourses.

Tata Motors, with a commanding 58% market share in EVs (as of October 2024), currently leads the pack with a portfolio that includes five EVs - Nexon, Punch, Tiago, Tigor, and the newly launched Tata Curvv EV. However, its dominance is under pressure—down from a 74% share a year ago—as rivals like Mahindra & Mahindra (M&M) and Maruti Suzuki step up.

"The EV party in India is running delayed, with players only focusing on assembling vehicles currently," says Nirav Karkera of Fisdom Research. "It’s more like a pre-party right now. While Tata Motors has the first-mover advantage, M&M and Maruti appear to be the ‘best dressed’ contenders for the party once it starts."

The Challengers

M&M has made bold moves, launching two new EV models and investing heavily in the EV ecosystem. "Mahindra is putting its money where its mouth is, and that’s great," Karkera said

Meanwhile, Maruti Suzuki is making its long-awaited debut with the e-Vitara, an electric SUV set to roll out from Suzuki’s Gujarat plant in 2025. Unveiled recently in Milan, this vehicle will cater to both domestic and global markets, with nearly half its production earmarked for export.

Challenges and Opportunities

Despite the excitement, EV adoption faces significant hurdles, including inadequate charging infrastructure and unfavorable economics. "Government policies such as the FAME II scheme have provided some incentives, but more measures are needed to accelerate demand," Karkera explained.

Tata Motors offered steep discounts during the festive season but still struggled to drive significant EV sales, highlighting sluggish demand.

Interestingly, the delayed pace of EV adoption could work in favor of late entrants like Maruti Suzuki. "This might be one of those rare occasions where being late to the party is not a disadvantage," Karkera added. Maruti’s upcoming EV lineup, featuring models with 5-star NCAP safety ratings, could be its unique selling proposition.

Market Performance

Tata Motors’ stock has soared nearly 400% since its EV journey began five years ago. M&M, riding on successful internal combustion launches like the Thar and XUV500, has delivered similar returns. In contrast, Maruti’s stock has lagged, offering just about 50% returns, significantly underperforming the even frontline indices.

But the tide may be turning. Tata Motors has seen a correction since July due to market share losses, while Maruti’s stock has been consolidating since September. Analysts suggest Hyundai is yet to reveal details of its pipeline of launches, so M&M and Maruti could take the lead in the coming year, driven by new EV launches and competitive strategies.