Tata eyes bid for 6,000 e-buses without joining price wars

Tata Motors, the newly carved out commercial-vehicle unit that listed separately on stock exchanges in November last year, is planning its first major product offensive post-demerger.

• Tata Motors to bid for a government tender of up to 6,000 electric buses
• Tata focuses on disciplined pricing, avoiding steep discounts in bus tenders
• Company recently launched 17 new truck models, including electric variants

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Tata Motors Ltd. is preparing to bid for a government tender of as many as 6,000 electric buses, as it seeks to claw back market share without joining the steep discounting that has defined recent auctions, its top official said.

India’s largest commercial vehicle maker has already supplied about 3,600 battery-powered buses across Indian cities over the past seven years, Chief Executive Officer Girish Wagh said in an interview. That experience, he said, has pushed Tata toward more disciplined pricing as it weighs the full operating and financial risks embedded in India’s bus-procurement model.

The upcoming tender will require operators to run and maintain buses for 12 years, a structure that shifts long-term performance and safety risks, among others, onto suppliers.

“Running buses for 12 years is not just about supplying vehicles — it’s about safety management, uptime, passenger convenience, penalties and receivables over the entire period,” Wagh said. “Those risks have to be priced in.”

Tata’s insistence on factoring in those risks has cost it ground in recent tenders run by Convergence Energy Services Ltd., a state-backed agency that aggregates demand for electric buses. Newer rivals have won orders by bidding far lower, while Tata stuck to requirements around payment security, asset-light participation and returns over the full contract life, Wagh said.

Some of those aggressive bidders are now reassessing their pricing after confronting operational realities, he added, without sharing more details.

The company has completed deliveries under its existing electric-bus orders and recently won a smaller state contract in Tamil Nadu for 200 vehicles. The upcoming CESL tender for about 6,000 electric buses will be the next major test of whether Tata can secure new contracts while sticking to its strategy of price discipline.

Tata Motors, the newly carved out commercial-vehicle unit that listed separately on stock exchanges in November last year, is planning its first major product offensive post-demerger.

The company on Tuesday rolled out 17 truck models, including electric variants, as it refreshes its commercial vehicle lineup. Capital expenditure is expected to remain at about 2% to 4% of revenue, Wagh said, as the company works to complete its acquisition of Iveco Group NV’s commercial vehicle business this financial year ending March 31.