The Indian electric car market is witnessing price cuts by automakers, with Tata Motors being the latest to make its two popular EV models cheaper by up to Rs 1.2 lakh.
“Passing on the benefits” of a reduction in battery prices to consumers as it looks to make EVs more affordable for their faster adoption, the country's leading e-carmaker on Tuesday announced that the Nexon.ev would now start from Rs 14.49 lakh and the Tiago.ev would start from Rs 7.9 lakh.
As for the Nexon.ev, the price reduction is up to Rs 1.2 lakh and for the Tiago.ev, the price cut is up to Rs 70,000. The prices of the recently launched Punch.ev remain unchanged as the battery price reduction was factored in, the company said. Tata Motors’ move comes days after MG Comet’s prices were slashed between Rs 90,000 and Rs 1.4 lakh. MG Comet, a hatchback EV, now starts at Rs 6.99 lakh. Meanwhile, Nexon’s competition Mahindra XUV400 is readying for a facelift and a fresh launch by March.
“Battery costs constitute a substantial part of the overall cost of an EV. With battery cell prices having softened in the recent past and considering their potential reduction in the foreseeable future, we have chosen to proactively pass on the resulting benefits directly to customers,” said Vivek Srivatsa, chief commercial officer, Tata Passenger Electric Mobility (TPEM).
In January 2023, too, Tata Motors had cut prices of the Nexon.ev by up to Rs 85,000.
The company had said then that the decision was taken after the company received benefits from additional locations, government initiatives, and production efficiency in the past few months.
Electric variants currently form just 2 per cent of car sales in India, but buyers are becoming less wary of the higher upfront costs amid lower running costs and easing range anxiety.
More people are now buying lower variants of electric vehicles with “the soothing of anxiety about range,” Srivatsa told Business Standard earlier this month.
He further said: “When buying an EV, the first thing that the customer thinks of is about range. But we are seeing a little maturity coming into that aspect. People are realising that they are going to use the car in the city most of the time and probably once a year they go out of town. They are now right-sizing their expectations.”
A Tata Motors dealer said that when customers compare the EV and ICE models of the same car, many are enticed to go for the higher-end version of the ICE version as the price differential between EV and ICE versions runs into lakhs. “As EV pricing becomes more attractive, more people would opt for EVs as the cost of running is minimal,” the dealer said.
In January, Tata Motors’ EV sales grew by 69 per cent year-on-year to 6,979 units (including exports). Total passenger vehicle sales (including ICE vehicles) for the company grew by 12 per cent YoY to 54,033 units.
Srivatsa said: “While EVs have grown rapidly over the last few years, our mission is to accelerate the mainstream adoption of EVs by making them more accessible nationwide. Our portfolio already offers a wide choice of body styles, range and price points for our smart, feature rich EVs. We believe that at these accessible prices, the best-selling Nexon.ev and Tiago.ev become an even more compelling proposition to attract a larger pool of customers.”
Tata Motors, which began EV-only dealerships in September, plans to have 10 electric cars in its portfolio over the next three to four years.
EVs have shown a strong growth momentum and are substantially outperforming the overall passenger vehicle industry growth.
In CY23, the EV segment grew by over 90 per cent against the 8 per cent growth recorded by the PV industry. This growth momentum has continued in CY24 with EV sales registering 100 per cent Y-o-Y growth in January 2024. TPEM with over 70 per cent market share is the market leader in this fast-growing segment.
“Tata's price cut in India could prompt its rivals to also price their cars more competitively and launch newer EVs at aggressive prices,” Jay Kale, vice-president, Elara Capital, quoted as saying by Reuters.
New starting prices
Rs 14.49 lakh: Nexon.ev
Rs 16.99 lakh: Long range Nexon.ev (465 km)
Rs 7.99 lakh: Tiago.ev
Nexon.ev, Tiago.ev to be cheaper by up to Rs 1.2 lakh
Earlier, MG Comet prices were cut by up to Rs 1.4 lakh
M&M XUV400 ev face-lift expected by March