Lacklustre EV volumes a temporary aberration: Tata Motors CFO

While sharpening its focus on BEVs, Tata Motors said that it expects momentum to build back after the Curvv EV lau

Despite witnessing a drop in battery-driven cars for four months in a row, Tata Motors affirmed that it is doubling down on increasing electric vehicles’ penetration in the medium term. A senior official of the company said that the recent lacklustre volumes is a temporary aberration and the company is doubling down on its EV business by launching new models such as Curvv EV, and building charging infrastructure.

“Going forward, I think the excitement begins now with the launch of Curvv and therefore with the pricing corrections thanks to the battery price reductions also in place, we do expect the momentum to build back in the EV business,” said P.B. Balaji, chief financial officer, Tata Motors, in a post-earnings conference.

He went on to add, “Our focus remains on building the markets, focusing on improving the EV infrastructure, access to charging, combining with the solar (chargers). So, there's a host of activities that have been lined up and therefore our task remains driving up penetration of EVs in the overall portfolio.”

Tata Motors stated that it sold 5,027 EVs in July 2024, which is a reduction of 21 percent compared to its sales figures for July 2023 (6,329 units). This follows Tata witnessing its lowest EV sales in an 18-month period in June, when it declined by a whopping 34 per cent year-on-year 4,657 units. Its July figures are only a 7.9 per cent increase over last month’s EV sales.

Balaji had attributed the decline in sales to a notable drop in demand after the FAME-II subsidy scheme concluded in March. As he puts it, “Since FAMEII incentives are not there in the first quarter (of FY25) and till July-end, impacted (EV) sales. And that forms a sizable portion of our portfolio and therefore, it is logical that there's been an impact on that.”

While exuding confidence that the BEV market will bounce back, he maintained, “This is a temporary aberration and once FAMEIII comes in, we will be back into the growth path on EVs. So, nothing changes as far as our plans are concerned. We are just doubling up EV penetration.”

At present, Tata Motors offers five EV models – the Tiago EV, Tigor EV, Punch EV, Nexon EV, Xpres-T EV (for fleet sales). The Xpres-T previously qualified for a subsidy of up to Rs 2.15 lakh under the FAME-II scheme but was eventually ineligible for any incentives with the phase out of the policy.
In Balaji's view, some degree of the market slowdown is evident in the month of July across the board not just in EVs but in ICEV as well.

“We do expect this to recover from here on and particularly the festive demand coming up, we should expect to see that build back. And there's enough launch activities also planned so enough and more noise there to get the buzz back in the market.”

Balaji is anticipating that the FAME-III policy will also be extended to the private fleet buying segment.

In his view, “If it is going into the fleet segment and therefore it is public transport that is getting electrified (and) these are not personal buyers. Therefore, there is a logical case for this. It has been made out and we do believe the authorities are sympathetic to the logic. But let's wait and see how the fine print finally evolves.”

While sharpening its focus on BEVs, Tata Motors said that it expects momentum to build back after the Curvv EV launch. The company aims to anticipate better EV sales in the second half of the year.

On Thursday, Tata Motors reported a 74 percent year-on-year jump in consolidated net profit at Rs 5,566 crore in Q1 FY25. Its revenue increased by nearly 6 percent year-on-year to Rs 1.08 lakh crore.