Shares of Ola Electric Mobility Ltd., JBM Auto Ltd. and Ashok Leyland Ltd., among other automakers in the electric vehicle space, rallied in early trade on Thursday, after the government approved a new subsidy scheme for the sector focused on two-wheelers, three-wheelers and buses.
The government approved a new Rs 10,900 crore EV subsidy scheme for two years, in yet another attempt to step up adoption of electric mobility in the world's third largest automotive industry.
Called PM Electric Drive Revolution in Innovative Vehicle Enhancement, or PM E-Drive, the scheme will support 24.79 lakh electric two-wheelers, 3.16 lakh electric three-wheelers and 14,028 electric buses with a total outlay of Rs 3,679 crore.
The scheme proposes the installation of 22,100 fast chargers for electric cars, 1,800 fast chargers for electric buses and 48,400 fast chargers for electric two- and three-wheelers. The outlay is set at Rs 2,000 crore.
A sum of Rs 4,391 crore has been provided for the procurement of 14,028 electric buses by public transport agencies. An additional Rs 500 crore has been allocated for hybrid ambulances.
The PM E-Drive follows the second phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles, which expired on March 31, 2024, after a five-year run.
Shares of electric bus manufacturer JBM Auto jumped nearly 9% intraday to a one-month high of Rs 2,093.7 apiece. While those of Olectra Greentech gained 5% to a one-month high of Rs 1,699.3 per share. Ashok Leyland stock advanced 2.6%, while Ola Electric rose 2.3%, intraday.
Nifty Auto was up 0.56% as most of its constituents traded in green. The benchmark Nifty 50 saw a 0.46% advance.
Tata Motors Ltd. scrip bucked the trend to open over 1% lower as the new EV scheme skipped any benefits for electric or hybrid cars. The company is the market leader in EV cars.
EV Subsidy To Benefit All Makers: Morgan Stanley
The broad trend of the industry remains that as production-linked incentives are ramping up, demand-side incentives at the consumer level are decreasing, Morgan Stanley said in a note. Changes made in the EV scheme are positive for all listed OEMs, as they have qualified for PLIs while a lot of startups don't get incentives.
The procurement of 14,028 e-buses will benefit Ashok Leyland and Tata Motors, the investment bank said.
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