'Don't ignore legacy automakers in the EV rush'

Summary: While EVs dominate headlines, UTI Mutual Fund’s Sachin Trivedi believes the real opportunity lies in balance: backing legacy automakers adapting to change and ancillaries benefiting from regulatory shifts. He shares why patience, product leadership and contrarian investing remain the cornerstones of long-term success in the auto sector. Electric vehicles (EVs) may have captured the market’s imagination, but Sachin Trivedi, Senior Vice President, Head of Research and Fund Manager, Equity at UTI Mutual Fund, believes their true turning point is still some distance away. Trivedi, who manages five schemes with a combined asset base of Rs 14,800 crore, including the UTI Transportation and Logistics Fund, says the EV story will unfold steadily rather than suddenly. While falling battery prices, government incentives and early adoption have set the stage, Trivedi emphasises that long-term success will depend on execution, scale and cost efficiency. In this interview, he shares why legacy automakers remain well placed to thrive, how premiumisation and regulatory shifts are reshaping the auto sector and why taking the contrarian approach and patience are key to surviving the sector’s ups and downs. EVs have been in the spotlight for a few years now. Is the hype justified, or have expectations outpaced reality? Yes. In the initial phase, about three to four years ago, there was definitely some overhype surrounding EVs. We saw that quite clearly in global markets, where even established conventional automakers with strong balance sheets and good reported numbers faced significant de-rating. Their valuations corrected sharply simply because the narrative had shifted heavily in favour of EVs. That said, the hype at that time did have some merit. A few successful EV models gained genuine traction and consumer acceptance improved meaningfully. Alongside that, there was substantial government support through stricter emission norms, consumer incentives and subsidies, which helped push adoption. Battery prices were also falling rapidly, which strengthened the expectation that EV penetration would rise quickly. However, over time, the excitement has settled into a more practical phase. Governments have gradually reduced incentives, realising that pushing too hard through regulation isn’t sustainable. Consumers, too, are becoming more cautious, asking questions about charging infrastructure, resale value and long-term battery life. So, what we’re seeing now is a normalisation of expectations. Despite that, I firmly believe the future lies in EVs. Most automakers’ incremental R&D spend today is directed towards electrification. But the transition will be gradual, not abrupt. Globally, China is clearly leading, while in Europe, a few companies are doing well. In India, the two-wheeler space has seen some early success, with adoption rates of around 7-8 p