Tata Motors, which has gained a top spot in the electric vehicle passenger vehicle market, now wants to capture the electric commercial vehicle (CV) segment with new launches like the Ace EV. The company is working with e-commerce companies and logistics service providers like Amazon, BigBasket, City Link, DOT, Flipkart, etc. and has already received orders for 39,000 units of the Ace EV that claims to cover a range of 154 km on a single charge. Girish Wagh, Executive Director, Tata Motors said that small commercial vehicles (SCV) is a segment where the government is pushing for increased penetration of EVs to reduce emission levels in cities and promote eco-friendly, noise-free electric vehicles.
Government initiatives, he said, will play an integral role in the growth of the CV sector. Tata Motors has invested Rs 1,000-2,000 crore in capex in its commercial vehicle business each year in the last five years.
“A strong drive on infrastructure spending by the Government is expected to improve demand across segments and applications in FY23. Critical sectors including e-commerce, FMCG, FMCD, construction, mining, steel and cement will continue to drive demand in the M&HCV and I&LCV segments. Similarly, the SCV segment is expected to grow on the back of resilient demand from the agriculture, dairy, and e-commerce sectors,” Wagh said.
He added that a recovery in passenger CVs is expected from the first quarter of FY23, with the reopening of offices and schools and increased activity in the tourism sector. Replacement demand for the old fleet is also expected to increase volumes in the next fiscal.
Scrappage policy is another government initiative that the industry is banking on.
“It will be critical for the entire commercial vehicle business. Subsequently, the recently announced Gati Shakti project along with the Government’s heightened focus on infrastructure projects, and fiscal support for capital expenditure to state Governments will boost the demand for M&HCVs. The Performance-Linked Incentives (PLI) scheme by the Government is another crucial element that will prove vital for the overall CV sector and its growth prospects,” he added.
Electrification, according to Wagh, will provide unique growth opportunities even in commercial vehicles, as more and more segments/applications will start becoming attractive for EVs as the battery prices progressively decline over the coming years, and the supporting infrastructure keeps on improving.
“Electric buses through the GCC model (Gross Cost Contract, with ‘Own and Operate’ model) are already gaining traction in public transport application across multiple cities. Today, more than 650 Tata Motors e-buses are running on Indian roads, which have cumulatively run more than 25 million kilometres. We believe there is strong potential for growth, especially with the interest shown by Municipalities and STUs,” he said.
Wagh said that with increasing focus from the Government on import substitution and energy security, transition to alternate fuels is imperative across all vehicle segments, including CV.
“With 27 per cent growth in volumes in FY22 over FY21, and the positive drivers indicated above, we expect the industry to continue on growth curve,” he said.
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