The Centre has made electric vehicles the default choice for staff-car procurement by government ministries and departments, while raising the Net Dealer Price ceiling for electric cars to Rs 20 lakh from the earlier Rs 10 lakh limit for internal combustion engine vehicles.
The revised instructions from the Department of Expenditure under the Ministry of Finance were reported on Wednesday, November 11, as shares of automobile and electric vehicle companies rose sharply during trading. Mahindra & Mahindra led the gains, climbing 4.81% to an intra-day high of Rs 3,449, while Ola Electric Mobility advanced 3.53% to Rs 35.16.
The policy change means ministries and departments are expected to ordinarily procure electric vehicles when purchasing or replacing staff cars. The higher price ceiling expands the range of electric cars that can qualify for government procurement compared with the previous limit of Rs 10 lakh.
The revised instructions do not, however, impose a complete ban on conventional vehicles. Departments that consider electric vehicle procurement or deployment impractical may propose purchasing internal combustion engine vehicles. Such purchases would require justification and case-specific relaxation from the Department of Expenditure, along with the necessary approvals.
The announcement was followed by gains across several automobile and electric mobility companies. Hyundai Motor India rose 3.08% to an intra-day high of Rs 2,175, while TVS Motor Company gained 2.89% to Rs 4,636.10. Ather Energy advanced 2.40% to Rs 1,904.50. Maruti Suzuki India rose 2.10% to Rs 13,199, and Tata Motors Passenger Vehicles gained 2.03% to Rs 301.
Other companies also moved higher during the session. JBM Auto advanced 2% to Rs 511.95, while Bajaj Auto rose 1.28% to Rs 11,120. At the last check cited in the report, Mahindra & Mahindra was trading 4.5% higher, followed by TVS Motor Company at 2.53% and Ola Electric Mobility at 2.20%. Hyundai Motor India was up 2.3%, Maruti Suzuki India gained 2%, and Tata Motors Passenger Vehicles and Ather Energy rose 1.5% each. Bajaj Auto and JBM Auto were trading 0.5% higher, while Ashok Leyland was flat.
The revised procurement approach places government ministries and departments at the centre of the initial demand shift, but its implementation will depend on individual departments assessing vehicle deployment requirements. Where an electric vehicle is considered impractical, the department must seek the prescribed relaxation before purchasing a conventional vehicle. The Department of Expenditure’s revised instructions will therefore determine how the default EV preference is applied across government fleets.
