Tata Sons Chairman N Chandrasekaran today said the group's auto arm Tata Motors will make money from the government order for supply of 10,000 electric vehicles.
In a tender floated by state-run Energy Efficiency Services Ltd (EESL), Tata Motors emerged as the lowest bidder for 10,000 electric cars. The company had quoted the lowest price of Rs 10.16 lakh exclusive of the GST.
"I have seen comments by Pawan (Goenka) and Anand (Mahindra) both of whom I deeply respect. But I want to tell you, we will make money," Chandrasekaran said in an interview to CNBC TV18.
Last week, Mahindra & Mahindra (M&M) had raised questions about the pricing offered by Tata Motors for the tender and had said that it will have to take a "hard look" at how it could justify participating in the next phase of the tender.
"We have been selling electric vehicles in the country for the the last five years. We have an idea about the costing of various components. So we find it difficult to comprehend the pricing offered by the other bidder (Tata Motors)," M&M Managing Director Pawan Goenka had said.
Tata Motors will provide electric cars for Rs 11.2 lakh, which will be inclusive of GST and comprehensive five-year warranty which is 25 per cent below the current retail price of a similar e-car with three-year warranty.
As per the tender, the vehicles in the first phase will have to be supplied by November 30, 2017.
Mahindra's price per unit is over 2 lakh expensive than that of Tata Motors and therefore it is yet to decide whether to participate in the second round of the tender which will account for over 9,500 units.
"We were offered 50 per cent of the tender (500 units) in the first phase but we opted for 30 per cent as we would be losing money as our product is about Rs 2.3 lakh expensive than other bidder (Tata Motors)," Goenka had said.
Mahindra had said that its e-Verito was much bigger in size with better features and it will seek suppliers' views to ascertain if the price can be brought down.
Goenka, however, had ruled out curtailing vehicle size and other features to bring down the cost.
While Tata Motors will supply 250 cars in the first phase, M&M will supply 150 units.
The electric vehicles procured under the EESL tender will be used to replace petrol and diesel cars currently used by the central government and its agencies over a 3 to 4-year period.