India’s largest electric car manufacturer Tata Motors has said the government should look at incentivising electric four wheelers for personal mobility as it would give further impetus to the industry and accelerate the overall shift to electric mobility.
The company recently launched its second offering in the market–the Tigor EV, which it expects to do as well if not better than the existing Nexon EV. The Tigor EV comes with a starting price of Rs 11.99 lakh, which makes it at least Rs 2 lakh cheaper than the Nexon EV.
“Tigor should do similar if not better than the Nexon EV in the market. That much I am confident of. It is a more affordable vehicle than the Nexon while giving similar kind of performance and driving range. It is going to be a force multiplier for EVs,” said Shailesh Chandra, president, passenger vehicle business unit, Tata Motors. “Currently FAME 2 incentives are not applicable for electric four wheelers for personal use but the government should look into that. It will make vehicles more affordable and accessible to a larger set of consumers. In India, pricing is always a key factor.”
Despite the pandemic, sale of electric vehicles more than doubled in fiscal 2021 largely due to the launch of the Nexon EV, which was the first electric car for personal mobility at under Rs 15 lakh. The segment registered overall sales of nearly 6000 units which was more than double over 2019-20 when it was under 3,000 units. Nexon was the highest selling model with over 3800 units accounting for over 60 percent share in the segment, followed by MG Motor’s ZS EV at about 1500 units.
“Demand is no longer a problem for us. It was initially when people were not aware of the technology but not anymore. Infact with the announcement of EV policies by various state governments, we have seen demand go up nearly two and a half times in the last two months alone. So we are struggling to supply as nobody could have anticipated that,” Chandra said. “On top of that the semiconductor issue (chip shortage) has hit some of the critical components. The combination of both is really hurting the ability to service the demand.”
“If supply constraints do not become more acute, we should see a doubling of sales this fiscal too and will cross the 10,000 unit mark this year. That is very much on the cards,” he added.
Currently, the entire market is free for Tata to exploit as neither market leader Maruti, the Korean twins Hyundai and Kia, the Japanese firms Honda and Toyota or the Europeans Volkswagen group have any immediate plans of launching an EV in the mass market segment. Chandra believes others should join in and accelerate the development of the market.
“It is very clear to us that the consumer is ready. We are happy that others are not around so we are benefitting from all the demand that is being generated but from a market development perspective, it is important for other companies to enter this space. We need to bring cars at different price points and segments,” he said.
If supply constraints do not become more acute, we should see a doubling of sales this fiscal too and will cross the 10,000 unit mark this year. That is very much on the cardsShailesh Chandra, president, passenger vehicle business unit, Tata Motors
While most companies have devised their EV strategy based on the incentives on offer by the government, Tata Motors has been an outlier. Its focus on personal mobility in four wheeler is despite not getting the FAME 2 subsidy. Even though when it entered the market in 2017 through the EESL tender route, it was in the fleet segment.
“In 2017 when we participated in the tender, we were only half prepared. We had the technology as we had been working for quite sometime, but we were not completely ready,” Chandra said. “When we looked at the tender, we knew it would be challenging but it was worth getting into. We had to tweak the specifications of the vehicle to meet the requirements of the tender but we had the flexibility as we did not have an existing product in the market. So we were able to optimise the product which in turn enabled us to bid aggressively.”
“When we conceptualised Nexon EV we were clear it would be for the personal mobility space. This is 90 percent of the market. In shared mobility, even if you succeed in high penetration, the impact in the overall market and the conjoined ecosystem would be limited. While in the personal mobility space, even if the penetration is lower, there is a higher awareness and acceptance of the technology in the market.”
