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How Tata made Nexon EV a success story

G Balachandar Chennai | Updated on December 29, 2020

The compact SUV charged up the entire ecosystem with smart partnerships

In one month, Tata Motors will be celebrating the first anniversary of the launch of its electric compact SUV Nexon in the Indian market. The journey of this ‘Made in India’ electric car will go down as one of the successful stories of Covid-19-battered 2020.

 

Tata Nexon EV, formally introduced on January 28, 2020, has defied market trends with strong growth in sales despite the non-availability of what the industry called a major EV adoption segment — the fleet, which was crippled by the pandemic.

Covid-19 and the resultant lockdown slammed the brakes on the evolving EV ecosystem, particularly the development of charging infrastructure. All key growth segments — public transport, mobility in cities and the fleet segment — were impacted.

But Tata’s Nexon EV managed to crack the market and a good number of people bought it amid the slowdown in the market.

Breaking barriers

Despite losing the first quarter due to the lockdown, the industry has sold about 3,000 electric cars (2,959 units precisely) during the April-November 2020 period. This is without the fleet segment, which reported 80-85 per cent decline as it was underutilised. So, the entire growth was driven by the personal segment, which was perceived as a slower adopter due to some barriers. Of the 2,959 units sold, 2,800 came from the personal segment, an increase of 2.5 times over the previous year (a low base period).

The impressive part of the story is that of the total sales of 2,959 units, the Nexon EV accounted for 2,086 units (2,200 units since the launch) — about 70 per cent of the total industry sales and 4-4.5 times growth for Tata’s EV sales (it started selling Tigor EV before Nexon). Thus, the entire growth of electric car industry has been driven by Nexon EV. Without it, the industry would have declined by 15-20 per cent. Also, the Nexon EV has surpassed the cumulative sales of any EVs in the past.

“A smart strategy with a clear focus on breaking the key EV barriers and partnerships with group companies such as Tata Power, Tata Chemicals, Tata AutoComp Systems, and Tata Capital for establishing the EV ecosystem, has paid dividends for the company,” says Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors.

Tata Motors took the bold decision of entering personal segment when all pointers were directing towards fleet for growth. “We felt that since 85-90 per cent of industry sales come from the personal segment, we opted to conceive an EV for that segment,” he adds.

Attracting users

A consumer survey during the conceptual stage revealed that the company should overcome three major barriers to make its EVs attractive. First, electric cars are priced 2-2.5 times higher; and the message was that its EVs should not be priced more than 20-25 per cent as compared to conventional cars. Second, the clear answer for range concerns was that buyers will not show interest if the range was less than 200 km. Third, EVs did not provide a thrill while driving.

“We took these boundary conditions and designed the Nexon EV to bust all the key myths, and it was done within just 14-16 months. We brought a vehicle that was tailor-made to the needs of the customers,” says Chandra.

The Nexon EV is just ₹1-1.5 lakh more expensive than the Nexon diesel AMT. In fact, in Delhi, the Nexon EV is cheaper than the diesel AMT variant due to the incentives offered by the governments.

“Of course, the Nexon model itself is stylish and the safest car with the highest rating. Combinations all these factors helped change buyer perception about EVs. Today, if anyone is planning to by a car in ₹10-15 lakh range in big cities, he/she will definitely consider Nexon EV,” points out Chandra.

Published on December 28, 2020

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