Tata Motors gets a grip on tech ahead of EV launch in last-mile delivery

CV market has scraped the bottom, worst is behind

Encouraged by the demand for electric vehicles in the last mile delivery segment, Tata Motors will be launching an EV model for the segment soon. It is working with the e-commerce companies to understand their requirements with regards to range and performance, said Girish Wagh, executive director, commercial vehicle business unit, Tata Motors. Also in the works is a pure electric platform currently under development, for the cargo segment, he said.

“With increasing awareness of EVs, there is a good pull for EV offering in the last mile delivery segment. We have studied the sector in detail and are looking to deliver a solution and not just a vehicle. While the launch is still some months away, we are already working with some end users to understand their needs,” Wagh told reporters at a round table conference on Wednesday.  

Rival Ashok Leyland too has plans to launch EV offerings in the last mile delivery segment. Its EV arm, Switch Mobility, will be launching its first electric light commercial vehicle (e-LCV) in India by the end of December; it has secured 2,000 orders. The group has plans to invest $150-200 million in the EV space in the next few years.

Meanwhile, with an improved availability of CNG and high diesel prices, the commercial vehicle market leader has seen demand for CNG powered vehicles go up substantially in the segments between 5 tonnes to 16 tonnes. It now accounts for 41 per cent of total sales.

“There is a dying need for CNG vehicles. If a vehicle is plying in an area where CNG availability is not an issue, people are moving to it in lock stock and barrel,” said Wagh. Allocation of gas for transportation has improved substantially and this in turn will improve CNG penetration in the country.

Commenting on the overall commercial vehicle market he said, even as the sector is seeing a rapid recovery every quarter, overall fleet utilization for the transporters has still to catch up with 2018-19 levels. “CV is a cyclical industry but this time, both the amplitude as well as duration has been higher compared to the previous cycles.  Thankfully, we have scratched the bottom and on a recovery path,” said Wagh.

On a low base of the last two years, the commercial vehicle market leader expects the CV industry to grow by over 20 per cent year-on-year. This is based on the GDP growth estimate of 9 per cent for the current fiscal. In the first half of the current year, the CV market advanced 44 per cent YoY.

Even as one is encouraged by the recovery the demand is being led by the additional buyers and replacement demand constitutes a very small percentage of the overall sales.  

Also, retail buyers (those owning less than 10 trucks) that account for almost half the total sales, remain very cautious. “Hit by the high level of delinquency, lenders are still wary of extending credit to the retail buyers,” said Wagh.

With 95 per cent trucks being bought on credit the financiers play a very important role and without their active participation, the CV market cannot grow, he pointed out.

 Tata Motors to launch EV to plug the last mile delivery

 Sees CV market to end the year with over 20% growth

 Retail buyers still wary of new purchase

 Fleet utilisation for transporters still to catch up with FY19 levels