Consumers are not ditching diesel and petrol in hordes and charging into electric passenger vehicle showrooms yet, but they are increasingly warming up to the emerging technology. For Tata Motors, the market leader in this emerging segment, the share of electric vehicles (EV) has reached 20% for its set of models, Nexon and Tigor, which offer an electric option. Tata Motors expects that level of contribution from EVs in its overall PV portfolio by 2027-28.
For the quarter ended March 31, 2022, sales contribution from EVs stood at 8%. “Hopefully this financial year we will be in double digit penetration,” Shailesh Chandra, MD, Tata Passenger Electric Mobility (TPEM) told ETAuto. The Economic Times had reported that Tata Motors plans to produce 80,000 EVs this financial year.
The OEM plans to have 10 EV models in its stable by 2025. Key among them will be the ones based on its ALFA (Agile Light Flexible Advanced) platform, as they are expected to be the entry-level models in terms of price. It’s quite likely that Tata Motors would look at launching a model or two below the INR 10 lakh mark. “We will hit the place where the velocity of demand will be,” Chandra said. The average price of a car sold in India is gradually driving towards the INR 9 lakh mark.
Citing the example of the Tata Nexon witnessing 55% of purchases made by first-time car buyers, Chandra said that affordability in the domestic automobile industry is getting redefined. “The confident new age customers who directly buy the car with the best features and the size” are driving much of this trend, added.
The on-road price of an entry-level Nexon is close to INR 9 lakh in Mumbai. Usually, the higher trim levels see better market demand. “This is the next level of what we see as affordable cars. These are the price points that we are talking about,” Chandra said.
With a more favourable TCO (Total Cost of Ownership) than ICE vehicles, EVs with an acceptable driving range stand a good chance to be accepted by the young India. Powering TPEM’s strategy will be a mix of its Generations 1, 2, and 3 platform approach. Models like Nexon EV and Tigor EV which are electrified variants of the existing ICE models fall in Gen 1 category, more efficient EVs which may also have an ICE version would be Gen 2, and Gen 3 models would be ground up electric.
Definitely, we would consider mature markets because in electrification everyone is on the same page, or similar state of maturityShailesh Chandra, MD, Tata Passenger Electric Mobility (TPEM)
The Avinya Concept, Tata’s first fully dedicated electric vehicle, based on a ‘skateboard’ platform will lead the charge under the Gen 3 approach. A mix of an MPV “It will spawn more products in different footprints, range points and body styles,” he said. The design of the Avinya reflects a mix of a hatchback, an MPV and a little bit of SUV.Software-intensive EV megatrend: An opportunity to go global
The software-intensive EV megatrend is a good opportunity for Indian OEMs to go global. With the Avinya concept, Tata Motors plans to tap EV markets overseas, including the mature markets of Europe and the US. “Definitely, we would consider mature markets because in electrification everyone is on the same page, or similar state of maturity. It’s not a gap of decades unlike in the ICE world,” Chandra said.
The Avinya, scheduled to make a market debut in 2025, may offer L3 autonomous driving technology, or more. TMEP plans to leverage Avinya’s design and technology-mix to woo buyers in overseas markets too. he said, “If we realise this (the Concept as planned) it is a desirable product for all the markets, including the mature markets because not many cars of this nature you will see globally”.
Tata Motors’ industry peer and fellow homegrown OEM Mahindra & Mahindra (M&M) is also looking at having a global presence with its EVs. M&M is expected to unveil its ‘Born Electric’ model/s and strategy on August 15th.
Megatrends like electrification, autonomous driving, and connected vehicles are increasingly redefining the car as a software on wheels, something which Tata Sons Chairman N Chandrasekaran also highlighted in a recent speech. As software technologies make inroads into the automobile, India’s strength and credibility as a software technology hub may come more than handy for the Indian OEMs to go global in the EV era.
“Till it was the ICE world it was fine that our credibility might have been less, but when it is becoming “software on wheels”, which nation has the highest credibility on software? So, this is a big opportunity for India as a brand to really move global,” Chandra said.
Tata Motors and M&M belong to groups that have global software business entities.
The global plays may not be too far away, but before that happens the domestic EV market is set to get busier. Currently, EVs contribute only around 1% of the total domestic passenger vehicle (PV) sales. At the global level, the figure is estimated to be around 7%.
The EV share in the domestic industry, which Chandra believes should be rather compared in terms of penetration in the models that offer an electric as there is a dearth of EVs currently, is set to grow. Pretty much like Tata’s projection of achieving 20% of PV sales from EVs. “Now imagine, replicate this with all the manufacturers, and the choices increase. Already it is doing better than conventional diesels, right? So, there’s a huge potential,” Chandra said.
Raw material price challenge
EV demand is on the rise, but could the rise in raw materials for Lithium-ion batteries be a case for worry? “Commodity by nature is volatile. It’s always a manifestation of the demand, supply and therefore there will always be short-term volatility in any commodity. We had not seen this in Lithium-ion cells for quite some time,” he said. Chandra added that with new mining capacities coming up, and a lot of batteries from EVs sold earlier coming in for recycling, prices and sustainability of the supply chain may not be much to be worried about.
