Tata Motors mulls electric variant of Nano cars

Firm plans to re-position car amid Centre's push to switch to electric vehicles by 2030

Tata Motor's Nano cars might have sold just 872 units so far in the current financial year 2017-18, down 65 per cent on year-on-year (YoY) basis, but the company seems to be falling short of pulling the plug on the vehicle just yet. Sources say Tata Motors Ltd (TML) is contemplating an electric variant of the Nano; the EV might also be based on an upgraded version of the Nano, a car code-named Pelican.

Nano sales hit an all-time low of 167 units in June this year, falling further from an all-time low of 174 units in March. Exports too have been sluggish, with only 75 units being exported so far in FY18. During the April-June period this year, sales fell down 80 per cent, when compared to figures registered during the first quarter of FY16. Whereas this year's sales record marks a 65 per cent dip over the firm's Q1 figures in FY17.

The 'people's car' Nano has been largely associated with Tata Sons' chairman emeritus Ratan Tata and has been under constant attack from the Cyrus Mistry camp. Former Tata Sons chairman Cyrus Mistry had pegged the cumulative losses arising from the Nano project at Rs 6,400 crore.

Following market sentiments, the company was also going slow on upgrading the car to meet the BS-VI emission norms. However, now with change at the helm, (N Chandrasekaran took charge as chairman, Tata Sons in February this year), insiders say that the Tatas are not looking at phasing out the brand anytime soon.

The company is rather looking at repositioning the car as a small electric vehicle (EV), given the Centre's push for moving completely to EVs by 2030. Reports suggest that road tests for the Nano electric vehicle were conducted in Coimbatore last week.

A source close to the development said, "The company is evaluating options for the Nano. Things are at early stages at the moment." He added that the EV could also be based on an upgraded version of the Nano, a bigger car that is code named Pelican.

This car is expected to ditch the low-cost positioning of its predecessor- Tata Nano- and would sport a more stylish avatar, with a bigger wheel base, along with a more stylised exterior.

No Tata Motors spokesperson was, however, available for comments on the issue.

Meanwhile, sources also suggest that the company is also toying with the idea of coming out with an electric variant of the Tiago vehicle, the latest hatch from the Tata stable that has turned the company's fortunes around. This is perhaps because the Tiago brand is well accepted in the market and is witnessing traction.

Tata Tiago, the bellwether car for TML, has crossed the one lakh bookings milestone in the domestic market in April this year, just about a year since its launch in 2016. The car has played a crucial role in turning around the company's passenger vehicle (PV) sales, which grew 23.5 per cent YoY in FY17. In fact, the share of the compact segment in TML's overall PV sales rose from a 66 per cent in FY16 to 82 per cent in FY17, banking primarily on the Tiago.

Abdul Majeed, partner, automotive practice, PwC felt that car companies would now have to work on creating an EV portfolio so that they have multiple options on their platter and this would range from small cars to bigger ones to suit customer preferences. "The Nano is a good product but it would only take off well if perceptions change. So, Tata has to be careful whenever they think of bringing another variant of the car," he said.

Technically, any petrol car can be converted into an EV. The petrol engine is replaced by an electric motor, which draws its power from a controller. The controller, in turn, gets its power from rechargeable batteries.

Meanwhile, news reports suggest that Tata Motors manufacturing partner in Bangladesh Nitol Niloy Group chairman Abdul Matlub Ahmad has recently said in Kolkata that they are open to manufacturing the Nano in Bangladesh. He feels that the micro-car meets a need gap for smaller cars in congested road conditions in the neighbouring country.

Nitol Niloy, however, could not be reached for comments.