A senior Tata Motors official stated that its British arm Jaguar Land Rover (JLR) has no plans to leverage on India's new electric vehicle (EV) policy that offers import duty concessions to firms setting up manufacturing units in the country, as it is not suitable for the company.
The Indian government, had come out with the EV Policy earlier this year to incentivise global giants such as Tesla to set up manufacturing units in the country. While announcing the policy, the government had stated that the new EV policy sought to promote India as a manufacturing destination for EVs and attract investment from reputed global manufacturers.
“If we are able to leverage upon the policy environment, we will definitely consider it. At this point in time that specific policy is not something that is suitable for us. So, we don't intend to leverage that at this point in time,” Tata Motors' Group Chief Financial Officer P.B. Balaji told reporters in a post-earnings conference call.
Balaji said that currently, JLR's business in India is on a very "good wicket” and is growing very strongly.
“We have just localised the manufacturing of Range Rover and Range Rover Sport. We're seeing huge pickup in orders on that front. As volumes pick up; we will want to keep localising to the extent possible,” added Balaji.
As per the EV policy announced in March, global carmakers can import completely built-in units (electric) at a concessional rate of duty for five years if they invest at least $500 million (Rs 4,150 crore) to manufacture in India within three years, and also provide a bank guarantee.
For manufacturers setting up facilities in India within a three-year period, customs duty of 15 percent will be levied on electric vehicles of minimum CIF (cost, insurance and freight) value of $35,000 (around Rs 30 lakh) for a period of five years.
Balaji, however, hinted that the company will continue to look at opportunities of CKD (completely knocked down) operations to ensure that it will take the same benefits of 15 percent customs duty without taking on “additional obligations” in terms of both localisation as well as bank guarantees.
“We continue to evaluate CKD operations as more attractive to us, given our size and scale in India at this point in time," Balaji further added.
Meanwhile, JLR is gearing up the Range Rover Electric, which is current undergoing test runs and is slated for a global rollout next year. Balaji revealed that the electric car has already received 41,000 sign-ups on the waiting list.
“It is as much a brand launch as it is a powertrain launch. From that perspective, it’s Range Rover first then an electric next,” said Balaji, “We are excited with the next phase of JLR as it increasingly becomes an electric vehicle company.”
Going all-electric in Jaguar, remaining flexible in platforms
Balaji also reiterated that it will go all-electric in its Jaguar portfolio by 2025, with the first model currently undergoing prototype road testing. He revealed that most of the products will eventually be based on Jaguar Electrified Architecture (JEA) platform.
“We are consciously moving the Jaguar business to an all-electric portfolio and that is a business strategy call. We believe we can redefine and rediscover Jaguar in an electric avatar. And the products are on the road testing. As I said earlier, excellent performance coming through and the consumer clinics have also been outstanding,” asserted Balaji.
Tata Motors said that its British subsidiary will retain the flexible modular longitudinal architecture (MLA) on which Range Rover and Range Rover Sport are built offering internal combustion engine (ICE), Hybrid (overseas markets) and battery electric vehicle (BEV) options.
“The bulk of our performance today comes out of the flexible MLA architecture. So we are absolutely neutral to what happens to the EV penetration as far as that part of the portfolio is concerned,” noted Balaji.
JLR will also be banking on its next generation medium‑size SUV architecture, electrified modular architecture (EMA). “As far as the EMA portfolio is concerned, that's an area where we will we will look at how the EV penetration is exploring and we will flex those portfolios to see how long we can continue ICE on this and when we move parts of it to BEV.”
Meanwhile, Tata Motors stated that is likely to witness “constrained production” in the second and third quarter of the current fiscal, reflecting the annual summer plant shutdown and floods at a key aluminium supplier.
The wholesale volumes for JLR during the quarter were up 5 percent year-on-year at 98,000 thousand units, while the retail sales in the April-June period grew 9 percent year-on-year to 1.11 lakh units, according to the company.
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