Automaker Showdown Intensifies

The race for the second-largest carmaker in India is reaching a fever pitch. Tata Motors and Mahindra & Mahindra are rolling out a wave of facelifts, upgraded models, and new electric vehicles (EVs) throughout 2026. This strategic product offensive aims to outmaneuver each other for the coveted No.2 position in the passenger vehicle market, trailing significantly behind the dominant Maruti Suzuki India Ltd.

Tata Motors Passenger Vehicles is set to launch the facelifted Tata Punch this week, signaling the start of its nearly half-dozen new and refreshed models. This initiative closely follows Mahindra's unveiling of upgraded versions of its flagship SUVs, the XUV700 and XUV 3XO. These product plans are crucial as automakers prepare for the third phase of Corporate Average Fuel Efficiency (CAFE) norms, slated for April 2027, which will mandate stricter fleet-level emission targets and accelerate the adoption of clean-fuel vehicles.

Closing the Gap

Mahindra & Mahindra concluded 2025 as India's second-largest carmaker, recording retail sales of 592,771 units. Tata Motors followed closely with 567,607 units, according to Federation of Automobile Dealers Associations data. Both Indian manufacturers surpassed Hyundai Motor India Ltd, which had long held the No.2 spot. Mahindra confirmed plans for one to two refreshes across its EV and internal combustion engine (ICE) portfolios in 2026, building on its early January SUV launches.

EVs and Refreshes Take Center Stage

Mahindra plans to prioritize updates to its existing lineup before introducing new models on its latest NU_IQ vehicle platform. "Besides these (two major launches in January), we plan to have one to two refreshes in both EV and ICE in due course of 2026," stated Nalinikanth Gollagunta, CEO of Mahindra's automotive division. "Our next major milestone will be the first production vehicles from the new NU_IQ architecture... with initial launches expected in calendar 2027."

Tata Motors is also gearing up with at least three product introductions in 2026, with a pronounced emphasis on EVs. The company intends to launch an electric version of the recently unveiled Sierra SUV and an upgraded Tata Punch EV. Tata Motors aims to introduce its premium electric brand Avinya by the end of the current calendar year. The company is also set to launch a facelift of the sub-compact Tata Punch SUV on January 13. Tata's strategy heavily relies on expanding its EV presence, where it sold over 70,000 units in 2025, achieving 13% growth. Shailesh Chandra, MD and CEO of Tata Motors Passenger Vehicles, expressed confidence in achieving a "steady EV market share of 45–50%."

Navigating Emission Norms and Analyst Outlook

Analysts view both automakers as well-positioned to manage tighter emission standards and maintain profitability. Rishi Vora and Apurva Desai of Kotak Institutional Equities noted, "Tata Motors is best positioned, with a 15% battery electric vehicle mix and strong platform depth, followed by Mahindra & Mahindra." Motilal Oswal Financial Services highlighted Mahindra's aggressive launch pipeline as a key driver for sustained growth, forecasting a "14% volume CAGR over FY25–28E."

Since the start of 2026, Tata Motors PV share price has declined by 3.94%, while Mahindra's share price has fallen by 2.89%. The Nifty Auto index has seen a 1.69% decrease in the same period.