Tata Passenger Electric Mobility nears break-even: MD Shailesh Chandra

On the sidelines of the Punch electric vehicle (EV) launch, the first vehicle on Tata Motors’ pure EV platform, Shailesh Chandra, managing director (MD), Tata Motors Passenger Vehicles Limited & Tata Passenger Electric Mobility Limited (TPEML), speaks with Sohini Das in Mumbai. He talks about how the company is focusing on going fully electric and moving away from petrol and diesel powertrains. Edited excerpts:

How is the Punch EV, based on your pure-EV platform, different from the other three EVs you have in the market?

Punch EV is the first electric vehicle on our pure EV architecture. Since it is a dedicated platform, which allows us to change the entire floor and design it around the battery, therefore, in a smaller footprint car also, we can pack in more battery capacity and give more driving range. Punch EV comes with a range of 315-421 km. When we are in a conversion mode (from ICE to EV), we have cavities to fill because of the space created by the ICE powertrain. This also gives more interior space to the consumer. This car is not only used for city travel, but also gives outdoor experience. The SUV, at this price point (Rs 10.99-14.49 lakh) and with this kind of drive range, will fill up a gap in the market. The target customer is 35 years and less.

Going forward, will you consciously move away from diesel powertrains?

We have taken a conscious call of going full-electric. CNG focus will remain because it will have lower emissions, lower running costs, better fuel efficiency and remain relevant for lower-segment cars. We will pursue CNG and electric. Last year, the overall passenger vehicle (PV) industry grew by 7-8 per cent; EVs grew by 100 per cent and CNG by 25 per cent. Diesel may go away when the next emission norms come. Now, we have 15 per cent sales from diesel variants, CNG is 20 per cent and electric vehicles 12-15 per cent. The remaining is petrol. For us, diesel is at a similar level as EVs. We are going to launch gasoline direct injection (GDI) engines.

TPEML’s earnings before interest, taxes, depreciation and amortisation (Ebitda) margins have been improving. By when will you break even?

Ebitda margin in Q2 was minus 5.5 per cent, better than Q1 Ebitda margin of minus 9.7 per cent. The Ebitda margin is negative only because of product development expenses — the cost of creating our portfolio. It is an investment not an expense. It is an accounting principle to charge off a part of your capex through the profit-and loss statement route. If we remove this element, then we are very close to breaking even on Ebitda. We are definitely eyeing to become operating cash-flow positive.

What do you think of the buzz about Tesla entering the Indian market with incentives?

As of now, there is only speculation about the entry of global players with import duty concessions. The minister of state for commerce has also clarified in the Lok Sabha that there is no proposal either to provide exemption from local value addition or subsidy on import duty by India. As a principle, we welcome competition but with a level-playing field. Offering special benefits to anyone will not be the right thing. We are complying with all localisation norms from the day of launching our EV. For instance, we had started deliveries of the Tiago.ev in January 2023 and followed the rigorous process of production-lined incentive (PLI) certification with the testing agencies, relevant government departments and suppliers. A statutory audit was done to confirm the domestic value-add. We expect to receive benefits only 18-24 months thereafter. So, a level-playing field would mean that global original equipment manufacturers (OEMs), who enter India, should also invest in domestic manufacturing and value addition, before receiving any incentives. The government’s policy direction is for promoting/ encouraging local players to boldly invest in EV technology. It is also for moving up the value chain, creating skilled employment and an export base for EVs and new technology components. We believe the government will ensure a level-playing field for domestic players, while inviting global EV players to India.