The Maharashtra government has announced a motor tax hike for EV and CNG vehicles in its annual budget, causing a shocking in the auto sector. This new tax is expected to negatively impact the shares of companies manufacturing EV and CNG vehicles.
Impact on EV and CNG Vehicle Sales
While there were high hopes for the growth of the EV segment in India, sales dropped in February 2025, with only 8,968 EV units sold, against a target of 2 million units for FY 2025. On the other hand, demand for CNG vehicles remains strong, but the new tax structure by the Maharashtra government might affect them too.
Effect of Maharashtra New Tax Rules
Maharashtra’s Finance Minister Ajit Pawar announced the motor vehicle tax increase in the 2025-26 budget:
- A 1% additional motor tax will be applied on CNG and PNG four-wheelers, bringing in an additional revenue of ₹150 crore. Currently, these vehicles are subject to 7-9% motor tax, depending on the car’s price and category.
- EVs priced above ₹30 lakh will attract an additional 6% tax, expected to generate ₹170 crore in revenue.
- A 7% motor vehicle tax will be imposed on construction and light commercial vehicles, resulting in an additional income of ₹625 crore.
Pressure on the EV and Auto Sector
The automobile sector in India is already facing challenges due to recession, slowing economic growth, low consumer sentiment, inventory buildup, and cautious loan policies by banks. This new tax structure could negatively impact the sales of EV and CNG vehicle manufacturers.
Also Read: Why Railway Stocks Crashed over 60% in the last 6 months? Budget 2025 Impact Explained
5 Major Stocks Affected by Maharashtra Government’s Decision
After the Maharashtra government’s motor tax hike decision, these 5 major companies’ shares were impacted:
- Maruti Suzuki India Ltd
- Market Cap: ₹3.64 lakh crore
- Share Price: ₹11,621.00
- Impact: 0.46% increase in shares
- Tata Motors Ltd
- Market Cap: ₹2.37 lakh crore
- Share Price: ₹645.50
- Impact: 0.37% decrease in shares
- Mahindra & Mahindra Ltd
- Market Cap: ₹3.30 lakh crore
- Share Price: ₹2,656.00
- Impact: 2% decrease in shares
- Hyundai Motor India Ltd
- Market Cap: ₹1.34 lakh crore
- Share Price: ₹1,659.80
- Impact: 1% decrease in shares
- Bajaj Auto Limited
- Market Cap: ₹2.07 lakh crore
- Share Price: ₹7,419.80
- Impact: 0.49% increase in shares