Tata Motors hopes that the government will consider providing incentives to electric passenger vehicles used in the commercial fleet segment, which has seen a sharp decline after withdrawal of support, company group CFO PB Balaji said on Friday.
Electric four-wheeler passenger vehicles registered for commercial purposes or public transport used to get incentives under FAME II scheme which concluded on March 31, 2024.
The subsidy was withdrawn when the government introduced Electric Mobility Promotion Scheme 2024 with an outlay of Rs 500 crore before the introduction of PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme in September this year with an outlay of Rs 10,900 crore over a period of two years.
"Fundamentally it impacts the fleet segment, where we are seeing a sharp slowdown in that segment," Balaji told reporters in an earnings call.
He was responding to a query on how the withdrawal of subsidy for electric passenger vehicles for commercial purposes has impacted sales in the fleet segment.
The fleet segment accounted for 15 per cent of the total industry EV portfolio, he added "We believe the FAME incentives (for electric passenger vehicles) for the public segment is something which the government will consider, we hope, and at the same time we are continuing to work to ensure that the right TCO (total cost of ownership) proposition is given to the fleet operator. Even from our side, we are working through the product propositions for that," Balaji said.
Tata Motors had "a higher indexation on the fleet sales in EVs, because for them (fleet operators), TCO is a very important factor in their thought process" and the FAME incentive was serving on that particular front, he added.
"FAME incentives ensured that the electric mobility, which is shared public transport, is actually incentivised to the extent of getting the put down price lower…That is what has got impacted when the FAME incentives were withdrawn," Balaji said.
Therefore there was a slowdown there, he said, adding, "One would expect the proportion of EVs coming (down) and CNG is also getting much more prominent in that (fleet) segment, in any case".
On the outlook for electric PV sales in the fleet segment, he said, "The fleet is a segment that will take its time, they work purely on TCO. Therefore, to that extent, one will have to watch how fast that particular segment reacts." He, however, said as long as the personal segment, which accounts for 85 per cent of the electric PV market, continues to see volume growth coming through "with the launches coming through, we are quite comfortable looking ahead where we stand on the EV business".
"We are continuing to see the new launches that we have put in place, particularly with Curvv EV coming on board, as well as the Nexon 45kwh, we are starting to see demand come through now. October was a key month on that, and we would expect to see this grow from here on," Balaji said.
Tata Motors is continuing to build "the EV ecosystem in its entirety, and we are focusing on the various aspects of it", he said adding, "As the new high range cars start coming through, we are also starting to see a new customer class, also starting to adopt EVs".
Therefore, he said, "We believe this journey continues, and we continue to stay committed to it in terms of product offensive, market development, as well as ensuring the right technology is being provided."
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