Nomura Sees EV Adoption at Inflection Point in India, Picks Ather, M&M, Hyundai

Nomura has told clients that India's electric vehicle market is at an inflection point. In a note dated October 14, the brokerage picked Ather Energy, Mahindra & Mahindra, and Hyundai as its preferred plays on the theme.

The call comes as EV sales in India gather pace across two- and four-wheelers, helped by state subsidies, falling battery prices, and a wider choice of models. Nomura didn't give price targets or detailed financial projections in the summary available, but its stock preferences signal where it sees the strongest positioning.

Why these three?

Ather Energy is a pure-play electric two-wheeler maker. It listed on Indian bourses recently and competes with Ola Electric, TVS Motor, and Bajaj Auto in the fast-growing electric scooter segment. Nomura's pick suggests it expects Ather to hold its own in a market where scale and distribution matter.

Mahindra & Mahindra has been the most aggressive among legacy carmakers on electric SUVs. Its XUV400 and upcoming models have given it a first-mover edge in the e-SUV space. The company has also outlined plans to build a dedicated EV manufacturing facility in Pune.

Hyundai, India's second-largest carmaker by volume, is set to launch its first mass-market electric SUV, the Creta EV, in early 2025. The company has committed to localising battery packs and has a long-term plan to make India an export hub for EVs.

Nomura's preference for these three doesn't mean it's bearish on others. The note simply flags where it sees the best risk-reward. Other players like Tata Motors, which leads the electric car market, and TVS, which has a strong hybrid and EV portfolio, remain part of the broader ecosystem.

What's driving the inflection

Several factors are converging. Battery cell prices have fallen sharply over the past two years, making EVs more affordable. The government's FAME-II scheme, though scaled back, still supports adoption. And charging infrastructure, while still patchy, is expanding in metros and along highways.

Two-wheeler EVs have seen the fastest uptake, with electric scooters now accounting for a double-digit share of total scooter sales in some months. The four-wheeler EV market is smaller but growing, led by Tata Motors and MG Motor.

Nomura's note adds to a growing chorus of bullish calls on India's EV supply chain. Brokerages have been highlighting opportunities in battery makers, charging companies, and component suppliers as well.

For investors, the inflection point means the next few quarters will be crucial. Companies that can scale production, manage costs, and navigate policy changes will likely pull ahead. Nomura's picks reflect a bet on those that have already built a head start.

The brokerage's view is not without risks. EV adoption in India still faces hurdles: high upfront costs, limited charging options in smaller towns, and uncertainty over long-term subsidies. How these play out will determine whether the inflection turns into a sustained climb.