Life after subsidies: EV makers say lower manufacturing costs hold the key to profitability

What happened

India's big-ticket electric-vehicle subsidies are set to expire on 31 March 2028. Bajaj Auto and Tata Motors, both beneficiaries of government incentive schemes, say lowering manufacturing costs will be important to profitability after support is reduced. Bajaj Auto says it is already working on cost reductions.

Confirmed

Global impact / market context

Incentives currently support electric-vehicle profitability, so their reduction could leave makers with less income per vehicle unless lower production costs compensate. If companies cannot close that gap, weaker profits could limit investment in models or production capacity and make growth harder to sustain.

Analyst inference

Indian electric-vehicle sales have risen, with two-wheelers above 10% and cars above 8% of vehicle sales, while support is scheduled to end in March 2028. The article says subsidy withdrawals coincided with lower EV sales in the United States and China, raising concern about a similar risk in India.

Confirmed

What to watch

1. Watch for Bajaj Auto's disclosed progress on platform costs and further cost reductions, since those savings are its stated route to stronger profitability after incentives decline. Analyst inference
2. Look for details from Tata Motors on cost-cutting plans and how it expects to maintain electric-vehicle profitability as government support is reduced. Analyst inference
3. Track Indian electric-vehicle sales as the subsidy expiry approaches; a slowdown could weaken makers' revenue growth, while continued demand could help offset reduced support. Analyst inference

Evidence

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