Solely 3 Nifty Auto shares zoom this 12 months. Will Tesla’s India entry preserve Motown in crimson?

Indian auto shares have been below stress, with the Nifty Auto index shedding 7 per cent in February to this point and displaying an analogous decline in 2025 YTD. Whereas the Nifty Auto sector remained flat in January, it has been in a corrective part since October 2024, shedding 21 per cent of its worth. The downturn has been fueled by weak gross sales, slowing city shopper demand, and contracting margins.

Including to issues, automakers count on a reasonable efficiency within the monetary 12 months 2025-26, mirroring the present fiscal 12 months’s development. Weak point in small automobile gross sales—pushed by affordability challenges, easing pent-up demand, and a excessive base impact—has considerably impacted the sector’s development trajectory.

Moreover, exterior components such because the Donald Trump administration’s proposed 25 per cent tariff on car imports to the U.S. and experiences of Tesla’s potential entry into India have additional weighed on sentiment. Tesla’s arrival might intensify competitors within the electrical car (EV) market, disrupting native carmakers’ enlargement plans.

Regardless of these headwinds, the Nifty Auto index stays up over 4 per cent previously 12 months, outperforming the benchmark Nifty, which has gained simply 1.5 per cent in the identical interval.

Nifty Auto Constituents: Winners and losers

To date in 2025, solely three of the 15 Nifty Auto index constituents have managed to remain in constructive territory.

Maruti Suzuki is the highest gainer, up virtually 14 per cent in 2025 year-to-date (YTD) whereas Ashok Leyland and Eicher Motors have added over 1.5 per cent every.

In the meantime, Apollo Tyres has emerged as the most important laggard within the sector on this interval, down over 26 per cent adopted by Bosch, Samvardhana Motherson, and Bharat Forge, which have shed over 20 per cent every in 2025 YTD.

MRF has misplaced 19 per cent whereas Tata Motors, Exide and Hero Moto have misplaced over 10 per cent every.

Professional Take: Must you spend money on auto area?

As India’s auto sector navigates a difficult part marked by slowing gross sales and margin pressures, analysts are carefully watching the evolving regulatory panorama and the potential impression of Tesla’s entry into the market. 

Proposed EV insurance policies might harm funding in home ICE section

HSBC has raised issues over India’s proposed EV coverage adjustments, which might probably favour imported EVs over domestically manufactured inside combustion engine (ICE) autos. Stories recommend that the federal government is contemplating reducing import duties on EVs—an initiative believed to be aimed toward attracting Tesla following Prime Minister Narendra Modi’s discussions with Elon Musk within the U.S.

HSBC famous that the proposed 15 per cent import responsibility on EVs is considerably decrease than the 43-50 per cent GST imposed on domestically produced ICE passenger autos, which additionally incur an extra 13 per cent highway tax. Whereas India at present imports solely about 8,000 EVs yearly, the brokerage warned that such a coverage shift might deter long-term funding within the home ICE section, probably impacting the broader auto business.

Tesla unlikely to disrupt home leaders

Based on brokerages CLSA and Nomura Tesla’s entry into India is unlikely to considerably impression native leaders like Maruti Suzuki or Tata Motors however may gain advantage key suppliers reminiscent of Sona Comstar, Sansera Engineering, and Motherson Sumi.

CLSA mentioned market pleasure surrounding Tesla’s entry into India is perhaps overstated. Whereas a sub- ₹25 lakh Tesla mannequin might achieve market share, the brokerage doesn’t foresee the U.S. large considerably disrupting home leaders like Maruti Suzuki, Hyundai, or Tata Motors. As an alternative, it expects Tesla’s presence to speed up premiumization in India’s auto market. 

CLSA additionally emphasised that Tesla would require native manufacturing to scale successfully. Even with import duties lowered to beneath 20 per cent, pricing its fashions below ₹35-40 lakh could be tough with out a home manufacturing base.

Echoing comparable views, Nomura mentioned that whereas Tesla’s entry might reshape the EV section, established gamers will proceed to dominate, particularly within the mid-market and funds segments.

It believes that India’s evolving EV insurance policies will velocity up electrical car adoption, making it simpler for world gamers like Tesla to spend money on the nation. The coverage adjustments are additionally anticipated to spice up India’s EV infrastructure, benefiting key suppliers reminiscent of Sona Comstar, Sansera Engineering, and Motherson Sumi, Nomura added.

Disclaimer: The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise traders to examine with licensed specialists earlier than taking any funding selections.