The nascent electric vehicle (EV) market in India has attracted major carmakers recently, however, it’s mainly dominated by Tata Motors which has a lion’s share of 88% with just two EV models – Nexon EV and Tigor EV.
However, both cars cater to a niche audience due to their price range and EVs are anyway considered expensive in India. However, Tata has now introduced the cheapest electric car in India – the Tiago EV at a starting price of Rs 8.49 lakh (introductory and ex-showroom).
Tiago is much cheaper than Tata's Tigor EV, which was the most affordable EV in India at around Rs 12.5 lakh.
That said, Tata has led the EV race in the country with its Tata Nexon EV SUV which was the most-sold electric car in the country in H1 2022 with 13,280 units.
Tata’s Tigor EV was the second most-sold passenger vehicle in the country in H1 2022 as 5,532 units were registered. Meanwhile, the MG ZS EV remained a distant third with a total of 1,198 units in the first half of this calendar.
At such a time, bringing a budget EV would only make it easier for the company to consolidate its position in the market.
Competition From Rivals
The adoption of EVs has been slow in India as the technology is new and the charging infrastructure is also limited, on top of that, the high price of EVs is another major factor for less interest in the price-sensitive market in India.
Amid this, the launch of Tiago EV is significant as IC-engine cars are getting expensive and the prices of petrol and diesel are already on high.
Tata finally has some competition to look up to as Mahindra launched its first EV – XUV400 which is pitted against the popular Nexon EV.
Though on paper it looks solid, it remains to be seen if XUV400 EV would prove to be a serious threat to Nexon EV.
With Tiago EV, Tata has diversified its offerings and people looking to switch to an electric vehicle may finally have an option.
Tata Motors is already a market leader in India’s passenger EV market, with sales of over 45,000 units thus far. The Tiago EV should give the electric car market further momentum.
The Tiago EV's operating cost is expected to be about a seventh of the gasoline version, making it a "compelling proposition", Reuters quoted Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and its EV subsidiary, as saying. "We are not chasing to be the lowest cost," said Chandra
Chandra believes the car's "disruptive" pricing would open new opportunities and markets for Tata in smaller towns and cities. Hyundai Motor and Kia Motors also have plans to launch their EVs in India but they may be priced higher than Tata’s Tiago and Tigor EV
Is Pricing Everything?
Gaurav Vangaal, associate director, of light vehicle production forecasting at S&P Global Mobility, said, Tata Motors has done well with the pricing but there are a lot of answers the company has to give in the actual world.
“Pricing is not everything, they have done that well. I think there are a lot of things to be done here because we are not aware of the reliability and performance of the product as of you,” he said.
Vangaal believes the demand is likely to be huge for the EV in the initial years, however, it all depends on how the company meets the demand. Moreover, he says, the company may find another competitor in the market challenging these price points next year.
Tata Looks To Extend Its Lead
The government subsidies on EVs have helped the company in making its cars more accessible. At the same time, the high tariffs on imports
With an 88 per cent market share in the EV market, Tata Motors already has around 40,000 EVs on road and now, the company is looking to expand its EV portfolio from 3 EVs at present to 10 by FY26.
Recently, Shailesh Chandra, said the company is committed to launching 10 EVs in different product segments, body styles, and affordability levels.
In an interview with Economic Times in April, Tata Group chairman N Chandrasekaran said Tata Motors will continue to lead electrification in India’s automobile industry and aim to take its electric vehicles to global markets.
At the same time, Tata Motors will use its new Gen-3 platform to make electric vehicles for the global markets.
The company is working on enhancing vertical integration within the group to drive the electrification of vehicles. The group is also exploring plans for battery and cell localisation.
“We are very much interested in the battery; we have finalised the plans. We will be launching our initiatives to produce batteries very soon,” Chandrasekaran was quoted as saying.
Talking about localisation, Tata used to import most of the parts to make EVs, but as per Tata AutoComp CEO, Arvind Goel, around 50% of the components are now in-house. "Our plan is to localise everything," a Reuters report quoted him as saying.
Will Charging Infra Be A Roadblock?
The lower adoption of EVs in India is mainly attributed to costs and limited charging infrastructure.
“As per the cost, it’s a sweet spot, the placement is excellent, it’s indeed outstanding what Tata Motors has done but the charging infrastructure is going to be a worry for consumers in metropolitan cities,” Vangaal said.
“Where would people, living in apartments, find charging points? We park cars on the roads; the customers for EVs these companies are targeting lack a basic charging infrastructure,” he added.
The Tiago EV comes with two battery options – a 24 kWh battery pack, which delivers an MIDC (modified Indian driving cycle) range of 315 km, and a 19.2 kWh battery pack, with an estimated range of 250 km. The company has provided multiple options to charge the Tiago EV. You could either plug into a 15A plug point, a standard 3.3 kW AC charger, a 7.2 kW AC home fast charger, or DC fast charging.
Meanwhile, the company is looking to find a way around the charging infrastructure challenge. The company is aiming to expand the charging infra, considering there are currently around 3,000 public charging points.
Tata Power recently entered into a strategic partnership with Hyundai Motor India Limited (HMIL) to build an EV charging network.