Rising commodity costs and the end of EV subsidies reportedly threaten India’s two‑wheeler makers, with price hikes looming and margins set to shrink by 300 basis points.
India’s electric two-wheeler manufacturers are preparing for margin pressures and potential demand slowdown as the withdrawal of subsidies coincides with rising commodity costs linked to the West Asia conflict, according to an exclusive Mint report.
From April 2026, subsidies under the PM E‑Drive scheme are scheduled to end, removing the ₹15,000 incentive currently offered on each electric two‑wheeler. The report estimates this could lead to price increases of up to ₹5000 per unit.
Companies including TVS Motor, Bajaj Auto and Hero MotoCorp have sought an extension of the scheme, but industry executives say clarity from the government remains limited.
At the same time, commodity prices have surged. Trading Economics data show that aluminium and platinum group metals have risen by 14%-19% since October 2025. Analysts expect this to reduce margins by around 300 basis points, leaving manufacturers with the choice of passing costs on to consumers or absorbing them.
Emkay Global noted in a 16 March report that ongoing geopolitical tensions could cause further volatility, with a 300-400 basis point impact possible.
TVS Motor ended 2025 as the market leader in electric two‑wheelers, selling 298,881 units, followed by Bajaj Auto with 269,847. Analysts warn that removing subsidies could slow adoption in the short term, though an extension until March 2028 would support penetration.
According to Mint, the industry’s sensitivity to price changes makes the situation particularly challenging. A senior executive said even if subsidies are extended, they are unlikely to last beyond three to four months, forcing companies to plan for higher costs.
With demand growth at risk, manufacturers face a difficult balance between maintaining affordability and protecting profitability. The outcome of government decisions on incentives will be critical in shaping the trajectory of India’s electric two‑wheeler market in 2026.
