Electric vehicle production to get priority over other cars: Tata Motors 

Unabated demand for electric cars has forced Tata Motors, India’s third largest car-maker, to accord priority on the production lines in its factories which also manufactures petrol and diesel-powered vehicles.

The Mumbai-based company is operating its plants at ‘high utilisation levels’ presently and therefore will have to adjust production of its electric cars with those which are powered by fossil fuels to meet demand.

With a share of more than 70 per cent, Tata Motors is the market leader in the electric four-wheeler segment. While at present it has two models that are powered by batteries – Nexon and Tigor – but the number of offerings is expected to touch 10 models in the next three years.

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Demand growth

Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said, “We will have to prioritise EVs given that it is in a steep growth phase. We are going through a demand discovery phase and to ensure that we unleash the full demand potential it is quite logical to give certain priority to EV and that is what we are doing.”

Tata Motors’ electric vehicle company, in which the investors TPG Rise Climate and ADQ own 11-15 per cent stake, does not have any factories of its own. It has to rely on the production facilities of Tata Motors Passenger Vehicles for supplies.

While Tata Motors’ non-electric vehicles are also facing huge waiting periods extending to beyond 4 months the waiting on the electric models are around six months.

Robust order book

It is presently accepting bookings for EVs which are 60 per cent more than its peak delivery capacity. “The order book is extremely healthy. For EVs, we have a monthly rate of bookings which is near 3,500 units and we did a peak supply of 2,200 in December,” Chandra added.

As of December 2021, the share of EVs in Tata Motors’ total domestic passenger vehicle sales stood at 6 per cent, which has been the highest since the company’s entry into EVs in January 2020. This share is only heading north with the introduction of new models and expansion of markets.

“Oneout of five vehicles should be an EV in the next five years which translates to 20 per cent penetration. We only have two EVs from the seven offerings we have which has given us a six per cent penetration. The penetration of electric in Nexon and Tigor is more than 15 per cent. As we move forward, as we electrify more models, this percentage is going to increase,” Chandra added.

While Chandra refused to share the actual installed production capacity of Tata Motors, he admitted that there is high utilisation levels of all of its passenger car producing factories. As per the latest information shared by Tata Motors Chief Financial Officer PB Balaji, the company has an installed capacity of 480,000 units a year or 40,000 units a month. The company sold nearly 35,300 in December 2021.

“We have undertaken de-bottlenecking actions (of production lines). The utilisation levels are quite high but we also have a partner capacity in Ranjangaon, which we try to leverage on, because there was spare capacity available. But it is true that our capacity utilisation levels used to be very low,” Chandra added. 

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