Tata EVs’ total cost of ownership will be on par with petrol, diesel cars by 2023: Shailesh Chandra

To use a soon-to-be outdated phrase, Tata Motors is firing on all cylinders. The brand has enjoyed a recent resurgence thanks to a major design overhaul, improvements in build quality and as the frontrunner in the domestic electric vehicles (EV) race. Shailesh Chandra, the President of Tata Motors’ Passenger Vehicles Business, throws some light on just how far ahead the brand has come in the EV space, and what it envisions for the future.

Edited excerpts from an interview:

Q: Tata Motors has chosen to form an all-electric subsidiary at a time when brands are creating electric sub-brands while simultaneously phasing out internal combustion engine (ICE) cars from their line-up. What prompted this decision?

A: The Indian EV market is on an exponential growth path. It is being shaped by a series of favorable factors such as positive word-of-mouth from existing customers, policy push, increase in petrol and diesel prices and an expected reduction in battery cost. In addition, given the inherent advantages of better drivability, performance, and an operational cost advantage, the customer base is now shifting from early adopters to early majority.

Tata Motors has established itself as a leader in the EV market in India and aspires to continue to win proactively going forward. Thus, to drive this narrative, Tata Motors has committed 10 new electric vehicles by investing proactively in drivetrains, products, platforms etc., while simultaneously leveraging the charging infrastructure. To fund this growth, EV business will require a significant investment to reach our targets. The passenger vehicle business on its own would be unable to fund the required investment. Thus, we believe that creating an all-electric subsidiary will help to drive the required focus and efforts on all aspects of electrification.

Q: With TML EVCo taking care of all future EV projects, where do you see Tata Motors and its ICE cars in the next 10 years? Particularly with regards to diesel and petrol? Essentially what happens to the Tata Motors brand when the time for ICE cars is up?

A: Unlike western countries where 4-wheeler passenger vehicle sales have reached a saturation point, there is low car penetration in India. This, along with an increase in spending of middle income group, improvement in highway infrastructure, increase in need for personal mobility in the post-COVID era and new launches are some of the factors which are projected to propel growth in Indian passenger vehicle (PV) industry to 6.5 – 7 million annual sales in 2030 from 2.8 million in FY21.

If we consider the target set by the government of achieving 30 percent penetration of EV, today’s PV market will grow from 2.8 million to 4.9 million units and EV market will grow to 2.1 million units by 2030. ICE vehicles, of course, will see a natural evolution towards more emission friendly technologies driven by stringent emission norms. However, at least for the next decade, ICE and EV vehicles will co-exist in India and will present a significant growth opportunity for OEMs in both these spaces.

Q: Battery recycling will play a major role, not only in keeping the EV business sustainable but in lowering battery production costs for brands. Where is Tata Motors at the moment, when it comes to battery recycling infrastructure?

A: Efficient battery recycling and deployment of circular economy will ensure that the recovered materials are put back into the value chain thus providing supply security to some extent. We at Tata Motors are consciously striving towards this with certain partners. We are also looking into reuse/repurposing the batteries after their automotive use is over, but still it may be good for certain applications.

Q: The Tata Group wants and is in the process of being an end-to-end solutions provider in the EV ecosystem. When do you foresee all these elements coming together in a way that will bring parity between the prices of EVs and their ICE counterparts?

A: For private car owners, Tata EVs (for annual running of 10K km) will achieve total cost of ownership parity with both petrol and diesel by end of FY23. Tata EVs (for annual running of 50K km) have already achieved parity in terms of total cost of ownership with CNG and Diesel.

For the rapid adoption of EVs, it is critical that the supporting levers must be in place such as vehicle financing, home and public charging infra, localization of e-powertrain and electric components. To deliver this, the Tata Group has come together to build an EV ecosystem. The Tata EV UniEVerse, launched alongside the Nexon EV, is based on this concept.

Tata Motors partnered with Tata Power to proactively address the challenges of home, workplace, captive and public charging. The other elements of the ecosystem include a supplier base for EV components, vehicle financing and mobility services partners. We’ve also collaborated with Tata Autocomp for the localization of battery pack assembly and motor assembly. For financial solutions for both fleet and personal segments, we collaborated with Tata Motors Finance and Tata Capital to introduce affordable financing solutions.

The ecosystem is already in play and enabling consumers to enjoy the benefits of an Electric Vehicle. Going forward, the Tata UniEVerse will see the participation of other group companies to further improve localization levels.

Q: The Central Government recently claimed that it is targeting 30 percent EV market penetration in the passenger car space, by 2030. Do you think the EV market is on track to meet that target? If not, what needs to be ramped-up to do so?

A: Over the last few years, the government has taken multiple initiatives to promote EV adoption. At the same time, they have announced stringent emission regulations such as BSVI Phase II and CAFE which discourages ICEs with higher emission levels and forces OEMs to include battery electric vehicles (BEVs) in their portfolio to meet the guidelines. All these indicators suggest that we are moving in the right direction to achieve a higher level of EV penetration.

In the near future, with more EV options available for customers in various segments and an increase in charging infrastructure, we will witness even higher penetration. Given the current momentum, we are optimistic that with joint efforts from all ecosystem players, the Indian market will be able to achieve the set target.

Q: With cars like the Tata Punch receiving five stars in adult passenger safety, Tata Motors has clearly established itself as a maker of some of the safest cars on sale. Do you think the customer mindset has evolved enough to take cognizance of the importance of safety? If not, then what measures would it take to make the general population value safety over other features?

Tata Motors has established itself as a leader in the EV market in India

Q: Speaking purely in terms of sales and market share, has the emphasis on safety paid off in a manner you’d hoped, or exceeded it?

A: Nexon, Altroz and Punch are three cars in our portfolio which received a 5 star (Global NCAP) safety rating. In our internal customer surveys we are repeatedly observing that safety features are among the top most reasons to buy these vehicles. Consequently, we have witnessed a significant increase in market shares of Nexon and Altroz in their respective segments. Punch, in its first month since its launch, nearly sold 8,500 units. At an overall TML level, market share has grown from 4.8 percent in FY20 to 8.2 percent in FY21 to 11.3 percent as on YTD Q2 FY22. This is clear evidence that customers are increasingly choosing to buy our cars with safety being one of the key reasons.