Tata Motors is sharpening its electric vehicle strategy around a blunt reality: EVs will not scale in India unless the sub-₹12 lakh segment opens up. The company came up with its first battery-as-a-service (BaaS) offering with the Punch.ev refesh to let customers compare the ownership costs with other models in the market and will be offering BaaS options in their entry-level EVs, including the Tiago.ev over time.
Launching the updated Punch.ev at ₹9.69 lakh (ex-showroom, Mumbai), with an optional battery-as-a-service (BaaS) structure starting at ₹6.49 lakh plus a battery usage charge of ₹2.6 per km, Tata Motors is explicitly targeting the entry segment that accounts for nearly two-thirds of India’s passenger vehicle demand but remains marginal for EVs.
The price band is the hardest to crack, according to Shailesh Chandra, managing director of Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility. “Below ₹12 lakh, the EV market is negligible,” he said, pointing to structural constraints such as limited GST arbitrage, tight price points and the need to offer sufficient real-world range for single-car ownership.
In the sub-₹12 lakh segment, where over 3 million passenger vehicles (PVs) are sold annually, EV penetration languishes at 1.5 per cent. That is in stark contrast to the above-₹12 lakh segment, where EV adoption has hit 10 per cent. Across the total 4.2 million-unit PV market, overall EV penetration currently hovers between 4-5 per cent, with Tata Motors maintaining its lead.
“We have been very committed to the entry EV segment because 65 per cent of demand lies there. Unless we crack this
segment, EVs will not become mainstream in India. That is why this phase is so critical in the evolution of electric vehicles in the country,” Chandra told reporters.
That is also why Tata Motors is extending BaaS beyond Punch.ev to other entry-level EVs, including Tiago.ev. But Chandra is clear about what BaaS actually is — and what it is not. “It is not really a service. It is a twin-EMI structure,” he said, adding that the service’s adoption is low at around 2-3 per cent.
As such, Chandra is confident that the overall PV industry is poised to post close to 10 percent growth in FY27 as the first half of FY26 has a low base. EVs too will continue their strong double digit growth, he said.
He admitted that they are sacrificing some margin now to ensure long-term growth. “We have been transparent about our profitability, and we are not very far from the ICE passenger vehicle business. Yes, we are sacrificing some margin right now to ensure long-term progress of EVs. You are also seeing discounting in ICE vehicles, so it is not a very different story,” he said.
With Maruti Suzuki launching its first EV earlier this month, competition in the space is heating up. Chandra feels more competition is a good thing.
“If the top six players commit to this space, it will really help to expand the segment. We have seen in the last financial year and in this financial year that new players and new products have helped the industry grow by around 75–78 percent. In the same period, we have grown by about 45 percent,” he added.
At the portfolio level, Tata Motors is steadily shifting Punch away from an ICE-heavy mix. EV penetration within Punch is currently about 10 percent, while overall clean-energy penetration—EV plus CNG—has risen to around 43 percent. Chandra expects EV penetration within Punch to move to 15 to 20 percent in the near term, and stabilise at around 25 to 30 percent by 2030.
Regionally, adoption is already far higher. In markets such as Jaipur and Kerala, EVs account for 30 to 40 percent of Tata’s overall PV sales, driven by home charging, solar adoption and dense urban clusters.
On the volume front, Punch.ev now sells around 1500-1800 units a month, which could see a 30-40 percent jump thanks to the refresh.
Crucially, Tata Motors is also open to breaking the ICE-EV design linkage. Chandra said future EVs may come in body styles that do not have an ICE counterpart. While Tata continues to use familiar “top hats” for scale and customer acceptance, he emphasised that the underlying architecture is already pure EV, not a conversion. Sharing design elements, he said, is a cost and volume decision—not a technological compromise.
On capacity, Tata Motors is running close to full utilisation and is already using partner facilities like Ranjangaon. The next phase will involve debottlenecking existing plants, improving flexibility, and selectively expanding brownfield capacity, before considering greenfield investments as volumes scale.
At the moment, Tata Motors PV has an installed capacity of 900,000 units per annum, which can be scaled up to a million units.
Looking ahead, Tata Motors is confident of meeting tightening CAFE norms with ease. As EV penetration rises across models like Punch, Tiago and Nexon, compliance becomes structurally easier rather than a constraint. The company is targeting overall EV penetration of around 30 percent by 2030, driven primarily by success in the entry segment.
 "Tata Motors to widen BaaS beyond Punch.ev to lift entry-level EV adoption")
