Tata Motors Ltd will continue to roll out diesel-driven variants of its existing models like Altoz, Harrier, Safari and the facelifted Nexon as long as favourable market dynamics and regulations permit, said a top company official.
"We aim to be net zero by 2040, which means a fast acceleration of EVs (electric vehicles). At the same time, thousands of people want diesel engine models. So, as an OEM (original equipment manufacturer), our policy is simple. We will keep adapting to the market and regulations. We will continue making diesel vehicles till there is demand," said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.
Chandra’s remarks came days after Union Minister for Road Transport Nitin Gadkari urged the auto industry to stop producing vehicles running on "polluting diesel". He also stated that he would request Finance Minister Nirmala Sitharaman to levy a "10 percent additional tax" on all types of diesel vehicles, such as cars, tractors and construction equipment. Gadkari, however, clarified half an hour later that there is no such proposal under "active consideration".
Chandra also said that the company had phased out many diesel-fired passenger vehicles (PVs) in the past and the existence of any technology will be governed by the prevailing regulations.
"When the regulatory requirements become so stringent that a certain powertrain cannot exist, we will follow that. We now have diesel models in only a few segments, and maybe those too will come under further pressure after BS-VII, and we will have to discontinue them. So, we will follow the market forces, and we will follow what the government brings in," added Chandra.
He was also of the view that other companies should foray into EVs to contribute to green mobility. However, he didn’t specify the names of the companies.
"We have shown the biggest commitment to what the government wants, which is EVs. Unfortunately, people are talking about diesel and not asking manufacturers who are not moving to EVs, but we are asking questions about diesel. Diesel will decline on its own," Chandra further added.
Like Tata Motors, another homegrown automaker, Mahindra and Mahindra (M&M), had also categorically stated that it will not be walking away from internal combustion engine (ICE) vehicles, especially diesel engines. Japanese carmaker Toyota Motor Corporation also stated that it will not shun diesel engines from its portfolio.
Industry analysts reckon that diesel vehicles have higher fuel efficiency and are an important part of last-mile mobility. "If we look at recent numbers, entry-segment cars and hatchbacks are posting negative numbers, while robust growth is happening in the utility vehicle (UV) segment. For bigger vehicles, higher fuel efficiency vehicles have a significant dependence on diesel, be it the Hyundai Alcazar, Tata Harrier, Hyundai Creta, or Mahindra Bolero, even though they remain under constant pressure from stringent emission norms," stated Gaurav Vangaal, Associate Director, S&P Global Mobility.
Domestic sales of diesel vehicles in India have nosedived since the price of the fuel was deregulated in 2014. As per industry estimates, nearly 18 percent of all passenger vehicles sold in the domestic market in FY23 comprised diesel models compared to 53 percent in FY14.
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