Ashok Leyland, M&M, Tata Motors Drag Nifty Auto Index Down As Tesla Gears Up for India Hiring

Last Updated:February 18, 2025, 14:38 IST

Nifty Auto Index faced selling pressure on February 18, slipping by over 1%, weighed down by key stocks like Ashok Leyland, Mahindra & Mahindra, and Tata Motors

Selloff in Nifty Auto as Elon Musk’s Tesla Starts India Hiring

The Nifty Auto Index faced selling pressure on February 18, slipping by over 1%, weighed down by key stocks like Ashok Leyland, Mahindra & Mahindra, and Tata Motors. This decline coincided with reports indicating that Tesla is ramping up its hiring efforts in India, a move that could signal the company’s interest in entering the country’s automotive market.

Tesla’s hiring push in India is seen as a potential precursor to a larger expansion strategy, potentially intensifying competition in India’s premium electric vehicle (EV) sector. However, analysts are cautious about the immediate impact Tesla’s presence may have on the market.

Ashok Leyland emerged as the worst performer in the index, dropping 2.59% intraday, while Tata Motors saw a 1.76% dip, touching an intraday low of Rs 674.50. Mahindra & Mahindra fell 2.19%, closing at Rs 2,770 per share on the NSE, extending its losing streak to a seventh consecutive session, during which it has lost over 13%. Bajaj Auto also declined by 1.4%, reaching an intraday low of Rs 8,417.55.

Tesla’s India hiring initiative includes 13 roles in customer-facing and back-end functions, following a meeting between Tesla CEO Elon Musk and Indian Prime Minister Narendra Modi during his recent visit to the US.

Parthiv Shah, Director at Tracom Stock Brokers, noted that while India’s EV sales are growing rapidly, the country’s charging infrastructure remains underdeveloped, limiting the likelihood of immediate disruption from new market entrants. He also pointed out that existing players like BYD and Hyundai are already well-established in the EV space, with domestic automakers such as Tata Motors showing stronger market penetration. Shah suggested that Tesla’s focus is more likely to be on the luxury EV segment, while the greatest demand in India currently lies in the Rs 10-25 lakh range, where Tesla does not yet have an offering.

Sanjeev Hota, Head of Research at Mirae Asset Sharekhan, echoed this sentiment, stating that Tesla’s entry is unlikely to have a significant impact on India’s automotive market in the near term.

In an effort to make the Indian market more attractive to foreign players, the government has lowered customs duties on high-end cars priced above $40,000 from 110% to 70%. This move could encourage Tesla to reconsider its India plans, which had been on hold due to high import duties.

India’s EV market remains in its early stages compared to China, with around 100,000 electric cars sold in 2024, compared to China’s 11 million. A potential Tesla foray into India could offer growth opportunities, particularly at a time when Tesla has reported its first annual decline in EV sales in over a decade.

Mahindra & Mahindra’s newly launched electric SUVs, the XUV E9 and BE 6, have already seen strong demand, with total bookings amounting to Rs 8,472 crore (ex-showroom).

The Nifty Auto Index has corrected by 21% from its all-time high in September 2024. However, market participants are hopeful that sentiment will improve, buoyed by strong industry tailwinds such as price hikes, interest rate cuts, and tax reliefs introduced in the Union Budget. The EV segment, in particular, is expected to see increased competition and growth as new models cater to the rising demand for electric vehicles.

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