The new decade is young but with electric vehicle launches flying in thick and fast, India's largest auto manufacturer Tata Motors believes EVs can corner up to 12 per cent of new car sales in India as early as 2022.
Tata will launch its second electric car targeted for the individual customers--the Nexon EV, on January 28. The car will be priced at Rs 15-17 lakh, making it one of the more affordable electric vehicles in the market. Subsidies like Rs 1.5 lakh on offer in some states like Delhi, would help bridge the price gap between Nexon EV and its diesel and petrol versions. Further, the company believes the stricter BS VI emission norms that come into effect from April 1 will act as an additional enabler towards EVs.
"We launched the extended range eTigor in October last year and the demand from individual customers has exceeded our expectations. So far we have sold more than 1200 eTigors," said Shailesh Chandra, President, electric vehicle business and corporate strategy, Tata Motors. "From an industry perspective, we have seen a relentless surge in demand. In the first quarter we sold about 300 electric cars which went up to 500 in the second quarter and about 800 in the third quarter. In the current quarter, I am expecting sales of at least 1,400 cars which would put the number for the fiscal at 3,000."
Prices of BS VI diesel vehicles are expected to cost about Rs 1 lakh more than the current BS IV versions. The BS IV version of the automatic petrol Nexon variant is priced at Rs 8.17-10.34 lakh while the diesel automatic variants are priced between Rs 9.18 lakh and Rs 11.4 lakh (ex showroom Delhi). Many state governments have also waived off road and registration taxes on EVs.
"The BS VI roll out which will make ICE (internal combustion engine) vehicles more expensive will be another enabler in the short term. At the same time, a lot of work is being done on creating charging infrastructure. The next inflection point will be somewhere in 2022 when enough number of charging stations would have been installed and multiple products would be available for consumers in the market. I can foresee a situation that by then EVs would account for 10-12 percent of new car sales," he added.
In the last three years, the central government has repeatedly talked about moving away from fossil fuel based to renewable energy powered electric vehicles, but most of the policy push has largely been restricted to shared mobility segments. The FAME 2 policy that was announced in April last year saw a 10 fold jump in budget outlay from just Rs 1,000 crore over three years under FAME 1 to Rs 10,000 crore primarily meant for electrifying two wheelers, shared cabs and buses. Tata however said it wanted to launch cars for individual customers as that remains the biggest chunk of the market and it did not want the category to get branded as a taxi segment.
"We would definitely like FAME 2 to cover private cars. That will help us making them more affordable. But nevertheless, we will keep launching more products for individual customers because it will damage the industry in the long term if electric cars are branded as those meant only for fleet and taxis," Chandra said. "Shared mobility accounts for just 20 percent of overall sales so the bulk of the market still comprises of individual car owners. Electric cars are powerful and fun to drive and the Nexon EV has a certified range of 311 kilometres. The moment cars with over 250 km range start entering the market they become attractive and viable to an individual car user."