FAME must include tractors and LCVs: TII's exec chairman Arun Murugappan

Chennai-based Murugappa Group-promoted Tube Investments of India (TII) is expanding its presence in the electric vehicle (EV) market by entering the small commercial vehicle (SCV) and tractor segments. About six months after launching its three-wheeler, it has already captured a 35 per cent market share in South India, says ARUN MURUGAPPAN, executive chairman of TII. In an exclusive interview with Shine Jacob, Murugappan discusses the EV road map, semiconductor plans, and the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India III (FAME III) wish list. Edited excerpts:

You are the makers of iconic cycles like BSA and Hercules. What led to your foray into EVs?

TII was originally 90 per cent dependent on the automotive industry. We decided to diversify into other businesses and chose four areas: medical, EVs, contract development and manufacturing organisation, and electronics.

In EVs, we decided to move forward with four platforms and formed a subsidiary called TI Clean Mobility. Under this, we have already launched three-wheelers and 55-tonne trucks.

The two additional segments we plan to launch are SCV and tractor. SCV will be launched by the end of the second quarter, around August or September. The tractor launch will take a bit longer.

I am happy with the performance of our three-wheelers. It has been five to six months since we started selling these three-wheelers, predominantly in South India, and we already have a market share of close to 35 per cent in the region.

Why are you betting big on SCVs?

There is a strong push for electrification in last-mile delivery. SCVs are easily manoeuvrable in the city and can cover 150-200 kilometres on a single charge. We believe that 25-30 per cent of these SCVs will be electrified by 2030. To achieve this target, annual penetration needs to be between 10 per cent and 15 per cent.

In the SCV segment, Tivolt Electric Vehicles, a venture of Murugappa Group and a subsidiary of TI Clean Mobility, is preparing to introduce its electric SCV under the brand Montra Electric.

We plan to offer a full range of vehicles below 3.5 tonnes. Over the next 13 to 18 months, the entire range will be available in the market. We have a production capacity of about 50,000 units per year.

From the policy side, what support do you require as the majority of these segments are excluded from the FAME subsidy?

The FAME scheme excludes tractors, light commercial vehicles, and medium and heavy commercial vehicles. These vehicles are top polluters, and 50 per cent of commercial vehicles fall into these categories. We have approached the Government of India through the National Highways Authority of India to include these segments in the FAME category.

The government aims for 70 per cent of all electric three-wheelers to be electrified. The main challenge is the charging infrastructure, which requires both government and private participation. We need a common charging standard and a proper scrappage policy. Also, incentives should be provided for SCVs to reduce the price gap with internal combustion engine vehicles.

Murugappa Group was one of the first groups in the country to foray into EV two-wheelers way back in 2008, but then you exited the business. How different is the EV segment and your preparations this time?

In 2008, we were ahead of our time. I wasn’t involved in that project. This time, our products have undergone extensive testing, and we are confident they will be successful.

We have made focused efforts, formed a separate company, and hired the best people in the field. This is the first time we have become an original equipment manufacturer through our three-wheeler launch.

We are investing Rs 3,000 crore in the EV business. We aim to produce best-in-class products in all four categories. Currently, we have no plans for two- and four-wheelers.

What are your plans for battery and semiconductor supply?

For batteries, we have partnered several companies and will set up a battery packing plant in Coimbatore by the end of this year.

For semiconductors, CG Power and Industrial Solutions has obtained a licence in Sanand. We will leverage CG Power’s expertise. The unit will be operational in 2025-26, with investments of around Rs 7,600 crore. We have a technical partner in Renesas Electronics Corporation.

What is your strategy for trucks, and what response are you getting for them?

Tractors will take some time because the battery needs to last for several hours. We are working on extending battery life and hope to launch tractors by the beginning of next year.

Currently, we are using trucks in the cement and steel industries to transport materials from mines to factories. The main issue with trucks is the high capital expenditure. We are working on reducing the cost of trucks.