Tata Motors, a prominent player in India’s automotive sector, unveiled a pioneering initiative by reducing the prices of its electric vehicles by up to 120,000 rupees (~$1,450). This strategic maneuver comes amid sluggish EV sales, where electric variants constitute merely 2% of total car sales, primarily due to apprehensions regarding upfront expenses and range concerns.
Vivek Srivatsa, Chief Commercial Officer at Tata Passenger Electric Mobility, elucidated the rationale behind this groundbreaking decision, stating, “With battery cell prices having softened in the recent past and considering their potential reduction in the foreseeable future, we have chosen to proactively pass on the resulting benefits directly to customers.”
The price revision spans Tata Motors’ popular models, notably the Nexon.ev, witnessing a reduction of 1.4% to 1.45 million rupees, down from its previous starting price of 1.47 million rupees. Furthermore, the company slashed the price of its electric small car Tiago by 70,000 rupees, rendering the base version around 8.1% more affordable at 799,000 rupees.
The introduction of these competitive prices aims to amplify the appeal of Tata’s EV offerings, with the Nexon.ev emerging as a formidable contender in India’s electric SUV segment since its launch in 2020. Despite facing stiff competition, Tata Motors remains resolute in its commitment to bolstering EV penetration, aiming to capture 25% of its total car sales by 2025, up from 9.3% in fiscal 2023.
While Tata Motors’ strategic price cuts signal a paradigm shift in India’s EV market dynamics, industry experts anticipate a ripple effect, compelling competitors to recalibrate their pricing strategies. Jay Kale, Vice President at Elara Capital, remarked, “Tata’s price cut in India could prompt its rivals to also price their cars more competitively and launch newer EVs at aggressive prices.”
Nevertheless, while the four-wheeler EV market undergoes transformation, India’s two-wheeler segment portrays a contrasting narrative, characterized by intense price competition between key players like Ola Electric and Ather. Tata Motors, cognizant of market dynamics, forays ahead with plans to expand its EV portfolio and establish a robust dealership network dedicated to electric vehicles.
Despite the strategic maneuvering, Tata Motors’ shares experienced a minor setback, falling by up to 1.9% following the announcement. However, amidst evolving market conditions, Tata Motors remains steadfast in its pursuit of electrifying India’s automotive landscape and fostering sustainable mobility solutions.
