📑 GST Proposal on Electric Vehicles (EVs) – Report

1. Key Proposal Highlights Mass-market EVs (Tata Nexon EV, MG ZS EV, etc.) GST remains at 5% → No price change. Luxury EVs (Tesla, BMW, Mercedes, BYD premium models) Proposed GST hike to 18–40% → These vehicles will become significantly costlier. Swappable Batteries Proposal to reduce GST → Positive for scooters, e-rickshaws, and fleet operators. Hybrids & Small Petrol/Diesel Cars GST may fall from 28% to 18% → These vehicles become cheaper. 2. Government’s Rationale Collect more tax from luxury cars (rich buyers can pay more). Keep affordable EVs attractive for middle-class buyers. Support the battery swapping ecosystem (important for fleets & deliveries). Boost sales of hybrids and small ICE cars to balance cleaner mobility options. 3. Implications For Consumers Mass EV buyers: No impact, prices stable. Luxury EV buyers: Cars get much more expensive. General buyers: Hybrids and small cars become more affordable, creating strong competition for EVs. For Automakers Negative:

& (leaders in EVs) → EV adoption pace may slow. Positive: , Toyota, Honda (hybrid players) → Likely beneficiaries. Global luxury EV makers (Tesla, BMW, Mercedes, BYD): Lose price competitiveness. For Stock Market Auto stocks fell because: EV adoption may slow. Hybrids/ICE cars will compete more strongly. Luxury EVs face heavy taxation → weak demand outlook. 4. Overall Impact Positive: Affordable EVs remain at 5% GST; lower tax on swappable batteries supports EV infrastructure. Negative: Luxury EV segment hit hard; hybrids gain at EVs’ expense; EV-focused Indian automakers face slower growth. ✅ In Summary: The GST proposal balances revenue needs and EV adoption. Affordable EVs stay supported, but hybrids and ICE cars get a tax boost, slowing the pure EV push. This shift made auto investors nervous, leading to a fall in EV-focused stocks.