The market leader in electric passenger vehicles, Tata Motors, has slashed prices for two of its electric vehicle (EV) cars by up to ₹1.2 lakh in a first such cut by a car maker in India.
The price of the Nexon.ev has been cut by up to ₹1.2 lakh with the long range Nexon.ev now starting from ₹16.99 lakh. The Tiago.ev has got a price reduction of up to ₹70,000 with the base model now starting at ₹7.99 lakh.
Tata Passenger Electric Mobility Ltd. (TPEM) attributed the decision to the reduction in raw material cost.
“Battery constitute a substantial part of the overall cost of an EV. With battery cell prices having softened and considering their potential reduction in the foreseeable future, we have chosen to pass on the benefits to customers,” a press statement quoted Mr. Vivek Srivatsa, Chief Commercial Officer, TPEM.
The inaugural prices of the recently launched Punch.ev, however remain unchanged as they already factor in reduction in battery price in the foreseeable future, the company said.
Sector watchers say that the implications of the decision are two-fold. “One, it signals Tata’s continued aggressive push for EVs. They not only have a strong portfolio of EV cars, but also a robust production capacity. They have a strong desire to push EVs to the next level, and there seems to be a close collaboration with the government towards that ambition as was evident in the prime minister visiting their stall at the Bharat Mobility Global Expo 2024 last week. So, we see that even a slight improvement in raw material cost is being passed on to the customers,” said Vinkesh Gulati, Chairman, Research and Academy, Federation of Automobile Dealers’ Associations.
“Secondly, the EV sales in the past two to three months have been lower than expected,” added Mr. Gulati.
The most important deterrent is the price gap between an internal combustion engine (ICE) car and an EV, apart from the battery range or the distance a car can cover before the battery needs to be recharged as well as the availability of charging stations.
In October 2023 retail sales of electric passenger vehicles grew by 17.86% month-on-month, followed by a degrowth of -2.5% in November and a growth rate of 2.2% in December. In CY2023, the EV segment grew by more than 90% against the 8% growth recorded by the PV industry. TPEM has more than 70% market share in the EV segment.