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Tata Motor’s move to launch the Tiago EV as the most affordable electric car could change the pricing dynamics of the industry as other carmakers look at lowering prices for their EV portfolio.
Last week, Tata Motors introduced the Tiago EV at ₹8.49 lakh for the first 10,000 bookings. The aggressive pricing of EVs will increase the penetration in the Indian market and will be a crucial factor in making EVs a mass product.
Analysts believe that with disruptive pricing, other automobile makers will be forced to launch EVs at similar price points.
"The price that the industry is offering for EVs is lucrative and is setting the benchmark for others to provide products with better prices and quality. It will also increase consumer expectations from the automobile market," said Hemal Thakker, Director-- Transport, Logistics &Mobility, Crisil Limited.
Switch to EVs
As EVs are being offered at competitive prices, analysts also believe that consumers would switch from hybrid diesel and petrol vehicles to complete electric vehicles. According to the data available on the Vahan website that records vehicle registrations across India, in September, 66 diesel hybrids were registered, 18,710 petrol hybrids, and 91,581 electric vehicles were registered. In the first week of October, so far 12 diesel hybrids, 3,934 petrol hybrids, and 15,006 electric vehicles have been registered.
"Penetration of hybrid is less than one percent and it is expensive as compared to regular petrol and diesel cars. If the volume supply of electric vehicles is achieved, consumers will prefer EV over hybrid," added Thakker.
Focus on entry-level
As automobile makers introduce new electric vehicles in the Indian automobile market, experts believe that the focus should be on entry-level consumers.
"The electric vehicle success story in the country cannot be focused on niche segments but on entry-level vehicle consumers. The cost of operation of electric vehicles is negligible and with Center and State subsidiary available for EVs, it will be a game changer," said Manish Raj Singhania, President, Federation of Automobile Dealers Association (FADA).
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