Backed by a billion-dollar funding from TPG Capital and a new range of models, Tata Motors is taking an early lead in the electric vehicles race with a plan to produce 50,000 EVs in the next fiscal year starting April.
The company has sounded out vendors on an assured production plan of 50,000 EVs in fiscal 2023 and scale it up to 125,000-150,000 units annually in the following two years, said several people aware of the matter. If it is able to deliver on the targets, the EV business could potentially generate revenue of INR 5,000 crore for Tata Motors in FY23 itself, justifying the steep valuation at which it sold a stake in the EV business to the PE fund.
With bookings for 15,000 vehicles and plans of launching three affordable electric cars in the sub-INR 10 lakh range in the coming 12-18 months, the maker of the Nexon EV is confident of scaling upon its early advantage.
Apart from a new Nexon EV with a higher range (mileage), Tata Motors has lined up an all-new Tiago EV, as well as the electric versions of the Punch small SUV and Altroz hatchback in the under-INR 10 lakh range, which will likely bring in new buyers over the next two years. The company’s EVs are expected to offer a minimum range of 200 kms per full charge.
Shailesh Chandra, MD, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility’ said the company will keep expanding into new cities and by adding products to increase accessibility, but he did not share specifics.
“We will be launching one or two products every year, which will be at different price points which will increase affordability. Nexon is our core today, you will see action below Nexon as well as above the product in the coming years,” said Chandra.
He declined to give any guidance on the production and the sales plan, but reiterated that the long-term vision of the company is to make 20% of its total sales from electric vehicles.
Tata Motors chairman had announced plans of launching 10 EVs by FY26, in his address to shareholders in FY21.
Meanwhile, passenger vehicle market leaders Maruti Suzuki and Hyundai Motor India aren’t expected to launch mainstream EVs in India before 2024-25, which means less competition for Tata Motors at least until then.
The share of electric vehicles in Tata Motors’ total passenger vehicle volume was 0.2% in fiscal 2020, which has risen to 5.6% in December 2021. At 50,000 units in FY23, this could top 12% of its total targeted volumes.
On potential volume growth, Chandra said: “There is a very strong demand pipeline. We have been getting booking rates of 3,500 a month, I am not even counting the fleet orders.”
There is a waiting period of 5-6 month, even as supply has been steeply ramped up, he said. “Tata Motors EV has a huge pending booking, there is heavy and pending demand for both Nexon and Tigor EVs. We are clearly seeing a strong acceptance amongst the EV buyers. Earlier we used to get 30% buyers for whom the Nexon EV used to be a personal vehicle; now that has shot up to 65%.”
The demand is higher in states such as Gujarat and Maharashtra where government policies result in additional demand incentives. The company is also seeking to open more dealerships to sell EVs.
The growth of the battery-operated vehicle, or BOV, is gradually picking up in India — as many as 311,358 BOVs were registered in 2021, compared with 119,654 in 2020, show data from the government’s Vahan portal.
Tata Motors sold 350 EVs in FY19, which increased to 1,300 the following fiscal year and to 4,200 in FY21. Its EV volume in the ongoing FY22 is expected to be 17,000-18,000 units. In the first nine months of FY22, Tata Motors sold around 10,000 EVs.
The company’s market share in EVs has jumped from 18% in FY19 to 82% at the end of 2021.
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