How to make EVs go ‘mainstream’? The answer lies in the below-Rs 10 lakh segment, says Tata Motors CEO

If EVs have to go mainstream, then they have to click, said Shailesh Chandra, Managing Director and CEO at Tata Passenger Vehicles. And the way to do it? Government support. Chandra suggested government support to electric vehicles (EVs) priced below Rs 10 lakh.

According to a report in The Economic Times, Chandra said that the segment faces structural cost challenges. More than half of India’s car buyers are below the Rs 10-lakh mark too. Tata has fielded Tiago and Tigor electric cars in that range.

He told the financial daily that battery costs can account for as much as 70 per cent of the vehicle price besides customers expecting a real-world range of over 400 km. With recent goods and services tax (GST) changes, the price parity has been pushed out of reach for entry-level EVs, said Chandra.

The Tata Passenger Vehicles CEO urged the Centre to reintroduce incentives on eco-friendly cars in the fleet segment. If the government delivers the needed support then it would see the biggest impact from an environmental return-on-investment perspective, said Chandra, adding that fleet segment may make 7-8 per cent of PV sales but contribute to 35 per cent of passenger kilometres driven. Before the introduction of the PM e-Drive schemes in October 2024, EVs in the fleet segment qualified for subsidies of Rs 10,000 per kWh, capped at Rs 1. 5 lakh. Tata Motors said the removal of such targeted incentives has slowed progress on affordability in this important sector.

The Indian passenger vehicle market saw mixed results in 2025. Chandra described "two unequal halves," with the first eight months under pressure until GST cuts took effect in late September, followed by a sharp improvement in demand from November. Tata Motors outperformed broader industry trends and ended the December quarter as the second-largest player in the market.

Tata’s Punch micro-SUV, priced between Rs 5.59 lakh and Rs 9.29 lakh, has been central to the company’s growth. Since its launch in October 2021, the Punch has become a key volume driver, with over 202,029 units sold in 2024 and around 170,000 units in 2025. The electric variant made up 9 per cent of the model’s total sales last year.