EVs for personal use driving sales despite Covid-19 pandemic: Tata Motors

The move towards electric vehicles (EVs) has not taken a beating despite the pandemic and has, in fact, seen a sharp increase in the personal use segment.

Sales to fleet owners or operators, however, fell 82 per cent to 109 units in the first six months of this financial year against 605 last year.

The EV market has grown 140 per cent.

Employee transport and the e-mobility segment comprise the fleet segment while the personal segment is individual purchases.

The fall in the fleet segment was more than recouped by sales in the personal use segment, Shailesh Chandra, president (passenger vehicle business unit), Tata Motors, told Business Standard in an interview.

According to the figures Tata Motors has provided, the industry sold 1,765 EVs for personal use during April-September this year. This was almost 10 times that of last year.

From no sales in the personal segment last year, Tata Motors sold 1,151 EVs in this segment during the first six months this year.

Its Nexon EV, competitively priced 10 per cent more than the diesel automatic variant, is selling almost 400 units every month.

“There were two-three products in the market when we came up with the Nexon, which has been a great success, is doing well, and is commanding 60-62 per cent of the EV market. There are five-six products positioned by four players in the EV space,” he said.

According to Chandra, EVs have come into the set of considerations of mainstream consumers who want to purchase a car. EV customers earlier were a sophisticated lot who demanded and had a different sort of requirements. These are those who like new technology or wish to be seen leaving a lower carbon footprint.

“While the fleet segment has crashed, the personal one will grow every month. The other two EV models (other than us) are highly priced compared to 100 models available for the IC (internal combustion) segment.”

The fleet segment started as “bread and butter” for the company but then it began working on the personal segment though there was no incentive.

“We saw the promise, given the fact that 90 per cent sales in passenger vehicles happen in the personal segment. If you are able to penetrate here you have more scale.”

The launch of models in the second half of last year and the policies of the Centre and states, like Delhi, helped push sales.

Chandra said the Nexon was a clear winner because the firm conceptualised the product around two pivots – first, people were not willing to pay 25-30 per cent more than an IC car in the same segment, and, second, a 200-km range (the distance which a vehicle can run in one full charge). The EV variant of the model is Rs 13.99 lakh while the diesel is Rs 12-13 lakh. After the Delhi government incentive of Rs 1.5 lakh, the EV variant is cheaper than diesel and even without the incentive it is in the 10 per cent zone.

Chandra said though the change in purchaser profile was primarily because of fewer taxis and fears of infection, consumers were more comfortable with EVs than they were earlier.

Tata Motors entered the EV space seriously through an EESL (Energy Efficiency Services Ltd) tender with its Tigor EV model. Subsequently, it went into the fleet segment, where there were FAME (Faster Adoption and Manufacturing of Electric Vehicles) of incentives and a natural case for adoption, given that the running cost for EVs is lower than that of conventional vehicles.

“The fleet segment started adopting EVs on the back of FAME incentives and credible products which had a 200-km plus range. Demand came especially from multinationals and technology companies.”

Tata Motors is the leader in the electric bus segment, which was provided in FAME I and II. The EV market started seeing demand mostly from 2017, when the government came up with measures on incentives and lay down the vision of 2030 on the penetration required from the private vehicle perspective and 100 per cent public transportation, he said.

Energy Efficiency Services Ltd made purchases which brought in volumes. Moreover, according to Chandra, the interest in EVs was further triggered through a well-thought-out policy, FAME II, and that had about a Rs 10,000 crore incentive, including charging infrastructure and demand, research, and design. This triggered an interest in EVs. States also followed with good policy measures, both demand- and supply-side incentives.

On the Nexon, he said it was “a compelling value proposition” and “many people sitting away from the fence have come closer to the fence and many have crossed the fence”. The Nexon was unveiled in December last year and launched in January.

Many customers bought EVs as a second car but started using them as primary ones after seeing the comfort and performance.

“The primary reason has been the launches, which take care of many myths and barriers around performance. Range was a concern but now they have real range of 250 km.”

Besides, charging solutions are being provided with the car, which obviates the need to go to fuel pumps every day or even once a week.