‘Govt has driven the growth of the EV segment’

The fleet segment was impacted due to lower utilisation. For EVs, it’s even lower because the primary use of EVs in fleet is employee transport and e-mobility service companies such as Ola and Uber. With work from home, mobility was disrupted. People are still hesitant about travelling in Olas. However, the personal segment is doing well due to a shift towards personal mobility, and that has rubbed off on the EV industry as well. Buying a car is now at the top of the disposable income. Also, consumers are more conscious of going green.

From a government perspective, they have taken several interventions to create an enabling environment. They have been one of the single-most drivers to trigger the growth of the EV segment. They have done a thorough job in understanding as to how the existing barriers have to be removed to create an environment conducive for EVs from an economical point of view as well as finding ways to make it sustainable through localisation. While GST rate was cut to 5 per cent, FAME II has been possibly the best thought through across the world.

They have tried to bridge the gap between the cost of ownership of an ICE and EV, which would have worked well had the fleet segment not been impacted. The phase-wise plan has also been really well thought through, and it is a very practical plan despite it being stretched as it allows manufacturers to localise battery packs, motors so that value addition gets done and as the transition happens, employment remains impact. From an ecosystem perspective, they have allocated ₹1,000 crore to the charging infrastructure, which is one single big thing that needs to pick up to create impact in terms of what the government has done.

We have to do a good job in terms of raising awareness that TCO parity is already there, and let us split this into two parts — shared mobility and the personal segment. In the fleet/shared mobility segment, the typical annual running is about 50,000 km. Typically, fuel cost for diesel cars used to be ₹20,000 per month. For a Tigor EV, it is just ₹5,000-6,000 so you are saving ₹15,000 a month and therefore the payback is faster. Your incremental EMI for an expensive EV (versus a diesel car) comes to about ₹7,000. So, one can actually make a gain of ₹7,000-8,000 in EV. Thus, TCO for an electric vehicle in the fleet segment is already better. Also, maintenance costs are cheaper for EVs.

In the personal segment, cars do about 12,000-15,000 km a year. Fuel cost will range from ₹50,000-60,000 a year. If the price of the Nexon EV was twice as much, TCO parity wouldn’t have been there. Since the Nexon EV has been brought to 10-15 per cent, we matched the TCO and see surge in sales. Going forward, as emission norms become stricter, prices of conventional cars will rise and battery prices will drop. Therefore, EVs will be far superior.

The commercial and fleet segment people are very TCO savvy. When you come to the personal segment, it depends on the category you are talking about. If it is above ₹10 lakh, TCO is not an issue. As you go to lower price segments, then this is the conversation that will be discussed.

As far as adoption is concerned, price gap is not the major reason, because we have tested this in our Nexon. We see the potential for double-digit penetration in whichever segment we bring an EV into. The biggest change that has to come is in the charging infrastructure as it will bring comfort to society. The pandemic has slowed the charging infrastructure. But it will be ramped up in the next one or two years. There is also still a need for more models at different price points in the market and once there are options to choose from, it will trigger excitement and more and more people will consider them. Cars will have to deliver higher range so they can be used as a primary car. Going forward, choices, higher range and charging infrastructure will drive faster adoption of EVs.

Has Tata Motors adopted a differentiated strategy to drive EV sales?

There are three-four things in combination that would make us unique. Out of the 14 OEMs in this category, we are the only ones who are sure-footed about the approach and we are leading this category with a 75 per cent market share. Since we decided earlier, we are also creating a portfolio of products. The ecosystem we are developing will be the single biggest factor in this approach and we are also taking localisation seriously. We have aligned our localisation to meet government requirements — the Nexon EV is the only car that meets all requirements for the FAME-II incentive, thereby making our journey more sustainable going forward. We are also the only ones who are focussing on fleet, personal and government in the EV segment.

We decided that in order to put an EV product on the road, we needed to provide an ecosystem supporting it. We decided to drive the growth of the ecosystem in a collaborative manner. We have partnered with Tata Power to address the challenge of charging, and both companies decided to provide suite of charging solutions for the home, workplace, and for captive and public charging. Tata Chemicals, which is working on manufacturing lithium-ion battery cells, is exploring active chemical manufacturing and battery recycling. Tata Autocomp is working on the localisation of battery pack assembly and motor assembly. For attractive financial solutions, we have tied with Tata Motors Finance and Tata Capital. Further, we are exploring partnerships with some of the leading mobility service providers to open up multiple options to access Tata Motors’ EV. We also use JLR’s expertise into our vehicle design and have utilized the entire ecosystem a lot.

We are committed to having the widest portfolio to cater to specific customer demands. Our launches are going to be continuous — it can be variants or refreshes. We have already announced the Altroz EV — there is no specific timeline but it is the biggest one yet. The ALFA architecture is the biggest advantage we have as it is electrification ready. Therefore, we can electrify the entire range if we wanted to. We are not going for immediate electrification because you have to meet boundaries to make it an acceptable product. We will keep electrifying the product depending on when the evolution is ready from it. Also, we have many technologies, including low voltage one. It’s essentially about when I press the button.

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