Tata's Shift to Electric Vehicles in PV Portfolio
【Summary】Tata Motors is revamping its passenger vehicle line-up, including electric vehicles (EVs), to compete in the growing Indian market. The company has relaunched the Nexon EV and its IC-engine version and plans to establish exclusive EV-only retail outlets. They aim to separate EV and internal combustion engine (ICE) vehicles within two years and introduce more advanced features and gadgetization in their EVs. EVs currently contribute to 13-15% of Tata Motors' sales and 18-20% of its revenue.
Tata Motors, the leading electric passenger vehicle company in India, is taking steps to revamp its passenger vehicle line-up, including electric vehicles (EVs), in order to stay competitive in a market where automakers are offering more choices to young, aspirational Indian buyers.
The company is scaling up its EV production, which will allow for further localization and improved cost structures. As part of this effort, Tata Motors has relaunched the Nexon, India's largest selling electric car, as well as its internal combustion engine (ICE) version. The starting prices for the Nexon EV and ICE are ₹14.74 lakh and ₹8.09 lakh ex-showroom, respectively.
The Nexon has been a popular SUV, with monthly sales ranging from 14,000 to 15,000 units. Tata Motors has also created a dedicated EV storefront called Tata.ev and implemented a distinct marketing strategy for electric vehicles. The company plans to gradually transition to exclusive EV-only retail outlets, starting in cities where market penetration is sufficient to make the model viable. This transition will be done in phases, with new retail outlets expected to be established over the next few quarters.
According to Shailesh Chandra, the managing director of Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, the long-term plan is to separate EVs and ICE vehicles, as the company will have a portfolio of 10 electric vehicles and expects increased demand. Chandra stated, "Eventually we will need to separate the two because we will have a portfolio of 10 electric vehicles and a lot more demand as well. After two years, the majority of EVs will be sold through exclusive outlets."
Chandra also emphasized that the customer base for EVs and ICE vehicles is different. As Tata Motors enhances its existing EVs, they will incorporate more gadgets and offer a seamless, connected experience. Customers in this segment want their cars to be a part of their gadget universe.
Currently, EVs account for 13-15% of Tata Motors' passenger vehicle sales and contribute to 18-20% of its revenue. The company sells around 6,500 EV units per month.
In addition to the Nexon, both the EV and ICE versions of the Harrier SUV will receive significant upgrades. The EV version of the Nexon will feature a more futuristic design and incorporate advanced features. Tata Motors also plans to launch mid-cycle refreshes of the Harrier and Safari models.
The Harrier SUV, which competes with Mahindra's XUV700, is currently available only in a diesel version. Chandra stated that diesel is the most popular choice in this segment, with monthly sales of around 4,500 units for the Harrier and Safari combined. Tata Motors has temporarily reduced production of these models to accommodate demand for other models, but plans to implement lifecycle interventions for the entire portfolio, starting with the Nexon.
Furthermore, Tata Motors is in the process of setting up a manufacturing unit for the 1.5 litre GDI petrol engine, which will be used in the Harrier and Safari models. However, Chandra noted that mid-cycle enhancements cannot wait for the introduction of petrol variants.
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