Indian EV market heats up: M&M, Maruti, and Hyundai gear up to challenge Tata and MG in 2024 showdown

Come January 2025 an impressive line-up of cars will murmur off the starting line into Delhi’s infamous winter smog. No high-decibel revving… They are electric vehicles to be launched by at least eight carmakers with plans to dominate the future. EVs accounted for just 2% of new cars sold in 2024. The market is big, and so is the competition. First movers Tata Motors, JSW MG Motor and Mahindra &amp; Mahindra (M&amp;M) will see the likes of Maruti Suzuki, India’s largest passenger carmaker, join the race, with Hyundai Motor and Kia India, units of South Korea’s Hyundai group, and China’s BYD, one of the world’s leading EV carmakers. The EV lure has even brought back Ford Motor of the US, which had exited making fossil-fuel cars in India in 2022 but came back in 2024—with EV export plans. Pawan Goenka, Chairman of IN-SPACe, an agency the government created to encourage private sector participation in the space programme, says the consumer will be spoilt for choice, and the charging infrastructure will no longer have an excuse not to grow. Goenka, a veteran of the automobile industry with long stints at the research division of General Motors, US, and later at M&amp;M, which he steered as MD and CEO, says, “Limited EV options for consumers and the high cost of EVs despite government incentives will no longer be excuses.” Carmakers must address car buyers’ concerns about resale value, financing, and charging infrastructure and make budget-friendly models. A Price Gap Too Wide? Nitin Gadkari, Union Minister of Road Transport and Highways, said at a September event of automobile component makers that he expects EVs to become affordable in the next two to three years and prices to come down to comparable ICE or internal combustion engines. Gadkari, known for his tough stance against petrol and diesel vehicles, said India’s automobile industry, the world’s third-largest after the US and China, can bring down EV prices as lithium-ion cells are becoming cheaper globally. According to the International Energy Association (IEA), lithium-ion battery prices declined from $1,400 per kilowatt hour (kWh) in 2010 to $130 per kWh in 2023. At present, prices are hovering between $130-$140 per kWh. In FY24, domestic retail sales of EVs surged by 91%, from 47,551 units in 2022-23 to 90,996 units in 2023-24, according to the Federation of Automobile Dealers Associations (FADA). Lithium-ion cell prices are just one of the factors for achieving price parity... Localisation, PLI, policy support, widespread charging infrastructure, and lower taxes will make EVs more affordable — Shailesh Chandra, MD, Tata Motors Passenger Vehicles &amp; Tata Motors Passenger Electric Mobility Rajeev Chaba, CEO Emeritus, JSW MG Motor India, says prices of lithium-ion cells are depressed but cautions that the prices are cyclical. Harshvardhan Sharma, Head-Auto Retail Practice at Nomura Research Institute, says price parity is still some years away, especially in cars priced below Rs 10 lakh, where the volumes are, although battery prices have fallen. The tax regime is also helping EVs, says Saket Mehra, Partner, Grant Thornton Bharat. GST on EVs is 5%, and on ICE cars is 28%. “Decline in lithium-ion prices, coupled with lower GST on EVs, would reduce the price differential between EV and ICE vehicles. This isn’t visible much in cars priced at around Rs 10 lakh, but as cars get around Rs 15-25 lakh, the GST difference grows linearly while the battery cost difference relative to vehicle price shrinks,” says Mehra. Making Batteries Affordable Lithium-ion cell prices are just one of the factors for achieving price parity. Several others including localisation, PLI and other incentives, widespread charging infra and lower taxes will make EVs more affordable and accessible compact, says Shailesh Chandra, MD, Tata Motors Passenger Vehicles and Tata Motors Passenger Electric Mobility. Chandra, who is leading Tata Motors’s electrification journey, says that the company has been proactively passing to customers all benefits accruing from reducing battery prices as well as localisation. Recently, the company reduced the price of the Nexon.ev by up to Rs 3 lakh and that of Punch.ev by up to Rs 1.5 lakh. Moreover, all vehicle manufacturers will need to comply with tighter and stricter emission norms going forward. “Costs of ICE vehicles rise with every new regulation aimed at reducing emissions. The advent of the next level of Bharat Stage Emission Standards and corporate average fuel economy (CAFE) norms will increase the cost of conventional, ICE vehicles,” says Chandra, who is also President of the Society of the Indian Automobile Manufacturers (SIAM). Chandra says giving price parity on a low-range EV is impractical. “I measure the price parity between EV and ICE of a product in any segment only when the EV can deliver 350-400 km range on a single charge. Then it becomes convenient and practical for customers as they can freely use the vehicle for both intercity and intracity drives,” says Chandra. Tata Motors, which recently launched electric variants of its mid-size SUV Curvv, offers larger battery packs of 45 kWh (range 502 km) and 35 kWh (430 km). The Curvv variants, priced at Rs 17.49-21.99 lakh, are almost at par with several mid-size ICE models, such as the Maruti Suzuki Grand Vitara, Hyundai Creta, Mahindra Thar, and Mahindra XUV700. JSW MG Motor India aims to bring price parity through its unique Battery-as-a-Service (BaaS) model which will lower the upfront cost of EVs. It has roped in Bajaj Finance, Hero FinCorp, Ecofy and Vidyut Tech, all non-banking finance companies that offer loans. JSW MG Motor will use telematics to track the kilometres driven. Bajaj Finance could charge customers Rs 3.5 per km for a fixed usage of 1,500 km a month for the batteries it finances, irrespective of how much the customer drives. So, the EV owner will pay Rs 5,250 a month to own the battery. Hero FinCorp will offer the same rates but charge extra for extra kilometres. Ecofy and Autovert will aim their offerings at people with low credit scores, charging Rs 5.8 for a minimum running of 1,500 km. No extras for extra kilometres, so the customer will have to pay Rs 8,780 a month to own the battery. Vidyut Tech is offering the simplest scheme: its customers must pay Rs 2.5 a km. JSW MG’s Chaba says the company has extended BaaS to its existing EV lineup, the ZS EV and MG Comet EV. “Thanks to the BaaS option, Comet is now coming at a pricing of less than Rs 5 lakh,” says Chaba, adding that as more and more players join, the market will grow. Electric vehicles are likely to be adopted gradually over the years as the multiple challenges facing the consumers are overcome — R.C. Bhargava, Chairman, Maruti Suzuki India Tata Motors tested the BaaS model by giving battery subscriptions for 12 months, 24 months, and 36 months, but the model did not get traction as car buyers got confused. “We are always open to experimenting and piloting new ideas. We had tested the BaaS option about three-four years back and found that it was confusing customers. While physically the battery and the vehicle are not separated, financially the pricing model was separating them. It was not easy for customers to understand this and so we decided not to proceed with it,” says Chandra. Rajesh Jejurikar, Executive Director (auto &amp; farm sector) of M&amp;M, is open to any disruptive idea to help the country reach the same goal. “India is on the cusp of the evolution of a new category. We are open to experimenting and learning from any new disruptive idea that enables industry growth,” says Jejurikar. Betting on localisation Automakers are doing everything to localise production and build reliable supply chains. China is the global hub for EV components, especially lithium-ion cells. Tata Motors buys its LFP-based type of lithium-ion cells from China but gets lithium-ion battery packs from Tata AutoComp Systems Ltd and a non-Tata company. “We are working with multiple supplier partners to source battery packs. Adopting such a multi-sourcing strategy hedges supply chain risks, mitigates dependency on a single supplier and improves competitiveness for timely and seamless supply of required parts,” says Chandra. The next step: buy lithium-ion cell battery packs made by Tata outfits. “In the future we will also source battery packs from Agratas, a Tata group company. They will also be investing in cell development and technology research and recycling,” says Chandra. JSW MG is aiming for a localisation level of 80-85% by using cells and battery packs from the recently announced battery manufacturing plant by JSW Group. The Chinese automaker is aiming to localise steel components, specialty steel and some intricate component through its partnership with JSW Group. M&amp;M is looking at global leaders for a consistent supply chain for lithium-ion batteries. “We are also committed to ensuring responsible recycling and disposal of lithium-ion batteries,” says Jejurikar. First Mover Tata Way Ahead For Tata Motors, a truck-maker for decades before it began making passenger cars in 1991, EVs have given it growth. Before introducing EVs, Tata Motors’ market share in passenger cars was in single digits (6-7% in 2018-19). EVs helped it get a 13-14% share in 2023, making it the third-largest passenger vehicles (PV) manufacturer. By 2024, Tata Motors had graduated from being seen as a ‘taxicab’ maker because of its Indigo model. Today, it has the widest range of EVs: the Tigor.ev, Tiago.ev, Punch.ev, Nexon.ev and Curvv.ev. Its EV sales surged by 43%, giving it a market share of over 70% in the segment, while its overall portfolio grew by 6% on the back of its EV lineup. At Tata Motors’ 79th annual general meeting (AGM) in June this year, Chairman N. Chandrasekaran said the company’s EV business will focus on driving up penetration through multiple product launches, focus on market development, charging network enhancements and introduction of aspiration product features. Will this strategy help? The Chairman does not look at any particular market share. “We aim to give the widest range of choices. We have today five-six products, including one in the fleet segment and we intend to have 10 products so that we cover price points right from say $8,500 going up to $50,000,” he said at the AGM. Analysts such as Nomura’s Sharma say Tata Motors must watch out for market leader Maruti Suzuki’s late entry into EVs. Tata Motors has dominated the segment by offering EVs at affordable prices (the Nexon.ev starts at Rs 15 lakh). But what if Maruti launches EVs in the Rs 10-12 lakh range? Sharma says Tata is working on extending its EV lineup with premium models, and its investments in the Gujarat battery plant with LG Chem could help it maintain cost advantages. According to Sharma, Tata Harrier.ev and Sierra.ev, which will be launched next year, in the premium-segment will address competitors like Hyundai and Mahindra. “This focus on building a portfolio across price points will be critical for defending its market share as new entrants disrupt the segment,” says Sharma. JSW MG’s Road Map MG Motor India, which was owned by China’s state-backed auto major SAIC Motor, got into some turbulence in the wake of geopolitical tensions between India and China. Despite investing Rs 7,000 crore in India, including on EVs like ZS EV and MG Comet EV, MG Motor faced allegations of financial irregularities. Things stabilised when it grabbed an offer from steelmaker Sajjan Jindal’s JSW Group to ‘Indianise’ operations by forming a partnership, JSW MG Motor India, which was announced in March this year. Chairman Sajjan Jindal says his dream is to create a ‘Maruti moment’, referring to how Suzuki’s partnership with Maruti in 1984 revolutionised the automobile industry in India. “We aim to do the same with MG,” says Jindal. JSW Group will invest Rs 40,000 crore in the JV, including setting up a lithium-ion battery cell manufacturing plant in Odisha, its second manufacturing facility in Gujarat and more than doubling its total capacity to 300,000 units in the coming years. “As far as the joint venture goes, the thinking is very clear that we believe in growth. We want to take our sales to 4x of current sales in the next three to four years. We want to develop the whole EV ecosystem in the country. We want to be leader in green and sustainable mobility,” says Chaba. With a ‘ruthless’ focus on localisation, the JV aims to sell around 1 million EVs by 2030. “We will launch one product every four to six months between MG Channel and MG Select, mostly new energy vehicles,” says Chaba. Parth Jindal, member of JSW Motor India’s Steering Committee, said at the launch of its Windsor EV that it wants to do away with cars running on fossil fuels. The key: new energy vehicles. “Whether that is a strong hybrid, plug-in hybrid, or battery EV, these will be the cornerstone of JSW MG Motor,” said Jindal. In FY24, sales of its EV portfolio grew by more than 50% over FY23 to 11,681 units. According to Nomura’s Sharma, the JSW-MG Motor JV could pose a challenge to Tata and Mahindra in the mid-range segment, particularly in terms of pricing and speed-to-market. M&amp;M’s Born Electric M&amp;M, the country’s largest SUV manufacturer by volume, has had two failed affairs with EVs. Way back in 2001, it introduced the Reva, which it acquired by buying the manufacturer. The car failed. In 2023, it launched the XUV400 electric, which failed to stand out against its rivals. Finally, M&amp;M created a subsidiary, Mahindra Electric Automobile Ltd, to handle the EV business. This unit, in which M&amp;M will invest Rs 12,000 crore, will launch five EVs by 2026, priced between Rs 15 lakh and Rs 20 lakh. The company has categorised the electric SUVs as XUV.e8 and XUV.e9 under the XUV brand, and three Born Electric vehicles—BE.05, BE.Rall-E and BE.07—under the INGLO platform. Temasek, the Singapore investment firm, will invest Rs 1,200 crore, while British International Investment, the UK’s development finance institution, will put in Rs 1,200 crore. Jejurikar says the Born Electric SUVs will be made on the INGLO platform and will have some of the largest battery packs and be built with the latest technology. M&amp;M has also joined hands with Europe’s Škoda Volkswagen India to procure EV components from Volkswagen. As Volkswagen struggles to survive in the Indian market, M&amp;M is reportedly picking up a 50% stake at a valuation of $800 million to $1 billion. It will invest Rs 4,000-5,000 crore in the joint venture, it is believed. Maruti’s EV Moment For years now, shareholders have been asking Maruti Suzuki, which sold close to 1.5 million units in 2023, why it does not have an EV yet even as rivals have introduced many EV models. At the 43rd AGM on August 27, when a shareholder again asked this question, Chairman R.C. Bhargava said it would roll out one in the domestic market in a few months. “Electric vehicles are likely to be adopted gradually over the years as the multiple challenges facing the consumers are overcome,” he said. But Bhargava said it will not roll out EV variants of all its 17-18 ICE models. A month later, Hisashi Takeuchi, MD &amp; CEO of Maruti Suzuki India Ltd, disclosed that the promised EV would have a range of 500 km and a 60-kWh battery. “At Maruti Suzuki, we will use all technologies to combat carbon emissions and oil consumption. We will have a high-specification EV with a range of 500 km and a 60-kWh battery. We will have multiple such products,” said Takeuchi. Maruti Suzuki will address the car buyers’ ecosystem as it launches EVs. “We are not only going to launch the product, we are [also] going to provide a complete ecosystem for the customers who are going to be part of this EV family,” Partho Banerjee, Senior Executive Officer (Marketing &amp; Sales), Maruti Suzuki India, said recently at a media briefing. India is on the cusp of the evolution of a new category. We are open to experimenting and learning from any new disruptive idea that enables industry growth — Rajesh Jejurikar, ED (Auto &amp; Farm Sector), Mahindra &amp; Mahindra It reportedly plans to install 25,000 fast-charging chargers. According to Banerjee, Maruti’s research shows that 95% of EV buyers currently charge at home. “The customers should have peace of mind while travelling... Having good infrastructure matters. We are going to come up with a holistic programme by which we are going to support the customers,” said Banerjee. He indicated that Maruti’s EVs will be launched at a price range of Rs 10-20 lakh. The company wants EVs to account for a quarter of its portfolio by 2030. While the company will introduce its EV in Q4 of FY25, mass production will begin only in FY26. Sharma of Nomura observes that Maruti’s entry into EVs will challenge Tata Motors on the price front. “With Maruti Suzuki commanding 41% of the total PV market, their entry into EVs could be a game-changer. Maruti’s volume-driven approach and deep penetration in semi-urban and rural markets give it a unique advantage in scaling EV adoption,” says Sharma. EV Export Hub In September this year, Ford Motor announced its return to the Indian market two years after its exit. The company, which began operations in the Indian market in 1995 via a partnership with M&amp;M, had already invested more than $2 billion before deciding to shut shop owing to an industry slowdown and poor sales. The company, which sold its Sanand, Gujarat, manufacturing plant to Tata Motors, had retained its Tamil Nadu plant despite final discussions with Jindal. Returning to India as part of a “Ford+Growth Plan”, Ford will export made-in-Chennai EVs to Southeast Asia. “We are announcing that we have submitted a Letter of Intent (LoI) to the Government of Tamil Nadu in India, confirming its intention to utilise the Chennai plant for manufacturing for export,” Kay Hart, President of Ford’s International Markets Group, said in a statement. Analysts say Ford’s entry could help India become a global hub for EV manufacturing. Ford reportedly wants to shift its export base from China to India as it faces increasing competition from Chinese EV manufacturers. Tata Motors, JSW MG Motor, M&amp;M and Maruti Suzuki also have plans to export EVs. Then there’s Tesla Motors. Will Tesla disrupt the market if it enters India? That remains to be seen as India’s legacy carmakers are making rapid gains in EVs. It will also face formidable players such as China’s BYD, which began as a battery maker and is today one of the world’s largest makers of EVs. BYD leads Tesla in China’s home market for EVs. @OrielAstha11

Indian EV market heats up: M&M, Maruti, and Hyundai gear up to challenge Tata and MG in 2024 showdown

The growing Indian EV market is poised for fierce competition as M&M, Maruti Suzuki, and Hyundai prepare to launch a clutch of new EVs next year, challenging leaders Tata Motors and JSW MG Motor India. It's game on