Tata Motors: 45% Of EV Sales Come From Smaller Towns; Targets Installing Community Chargers Category acceptance from smaller towns is the key to growth and we have achieved it, Vivek Srivatsa, chief commercial officer, Tata Passenger Electric Mobility

What does it take to be the largest player in India's rapidly growing electric vehicle (EV) space? "Understanding your customers is the key," said Vivek Srivatsa, chief commercial officer, Tata Passenger Electric Mobility. With an aim to sell 100,000 EVs this fiscal (FY25) – Tata Motors has navigated a challenging terrain – customer anxiety over limitation of EV drive range and myths related to safety.

When Tata Motors started with EVs in 2020, it was stepping into uncertainities: The company did not know how Indians would perceive the new launches. In FY24, it sold 73,833 units of EVs, "In total we have sold close to 150,000 EVs on the road till date. In 2020, when we launched, we were uncertain of achieving this milestone. It was almost outside the realm of possibility back then," Srivatsa quipped.

From gaining traction from smaller towns to developing charging infrastructure across India with a focus on developing community chargers, the company is aggressively expanding its presence.

Smaller towns, bigger bets

What is the secret sauce to cracking the code in the EV market? In India, category acceptance in the smaller town is a key to growth, "And…we have achieved this! We are spread across geographies in the country, it's not just focused on the main cities. EVs have been wholeheartedly embraced by the smaller towns to the extent that tier two and beyond contribute to 45 per cent of our volumes," he said.

The company has expanded its portfolio and every single product of the cohort has a fairly equal amount of sales. "We deliver almost the same amount of volume between the Nexon, Punch and Tiago. We are not dependent on one model and all the body styles are equally well accepted."

When it comes to EVs, there is a general preference towards top end variants, which come with all the features, gadgets and a larger battery size. "EV buyers are tech enthusiasts, skewing their preference to the top end variant across all products, be it Nexon, Punch or Tiago. The buyers are still in an experimentative state of mind and they would prefer to have larger battery sizes to support more range." However, the medium range or the smaller battery versions of each car are also picking up, for example, in Tiago, the medium battery range delivers around 20 per cent of the total sales volume. "It was substantially low earlier, but is now picking up," he added.

Building a robust infrastructure

With 8,000-plus charging stations across the country, Tata Motors also offers 24x7 emergency charging support in five cities as part of its seamless charging experience. "We partner very strongly with our group company Tata Power, but recently we have expanded partnerships beyond Tata Power. We are keen on sharing our EV charging data, which will be helpful for many startups looking to set up fast charging infrastructure in the right places."

In March, Tata Passenger Electric Mobility in a fresh collaboration with Hindustan Petroleum Corporation Limited, announced plans to set up 5,000 electric vehicle charging stations in India by December 2024.

The other big sector where the company is working is oil marketing companies (OMCs). "They are obviously getting into electric charging infrastructure in a big way. Their vision is that every fuel bunk should have a choice of petrol, diesel, CNG and EV electric charging as well. In the next two years, OMCs will see a huge growth in electric charging facilities and we are helping them out in terms of giving consumer behavior insights. So, while we ourselves are not into the charging infrastructure, we play a very strong role in working with all these companies to expand charging infrastructure."

Giving further insights, he explained that charging infrastructure is not only about highways, but also about cities. "In cities there are parking issues, we give a free charger and install it for each of our EV customers, provided they have a dedicated parking lot. However, there is a huge market, where people don't have their own parking lot or are situated where apartments do not allow chargers to be installed in the parking lots. So, the future is really about creating a lot of community chargers inside the city. That is the next level of ambition and key growth areas that we are pushing."

The company is focusing more on states where the EV penetration is high. "We also want to provide greater charging infrastructure where there are a lot of EVs already present. We are focusing on almost about 80 to 85 per cent of the country's geography, except for the Northeast and some areas of east India or central India, where it's largely forest."

Besides, the company's commercial fleet, XPRESS-T is another area that has grown substantially. "Our fleet XPRESS-T has shifted the India fleet market towards a more sustainable energy source. The quality of growth we have had in EV is very encouraging," he explained.

New launches, disruption in ICE

In one of its investor meetings, Tata confirmed the launch timeline of the EV and Internal Combustion Engines (ICE) Curvv. The brand plans to launch the Curvv EV between July and September 2024. After that, Tata plans to launch the ICE option three to four months after the launch of the EV version. "Curvv is very important product because for the first time, we are getting into a mid SUV category from Tata Motors, not only from the EV side, but also in ICE. It's a differentiated product. It'll unlock a lot of new use cases for customers and Curvv will create a big disruption in the mid SUV market on the ICE side as well." Curvv aims to disrupt the market with its design, functionality, features and luxury. "It will be a product which will come with multiple options in terms of powertrain, so, there'll be a product for all kinds of customers," he explained.

Apart from Curvv, In the investor meeting, Tata Motors announced the launch timelines for three of its upcoming electric vehicles: Harrier EV, Sierra EV, and Avinya EV. These EVs will be launched in India by April 2026.

What's next?

With an eye on giving customers a different retail experience and a post-purchase exposure, where they have access to both the dealership facilities and company, the auto giant started on an EV exclusive retail footprint. Tata Passenger Electric Mobility (TPEM) launched its TATA.ev stores, catering solely to EV customers, in the prominent auto hubs of Gurugram. Earlier EVs were sold from passenger vehicle (PV) stores.

"We were selling EVs out of our PV stores and realized that EV customers are very different, they want a lot more engagement when they buy the car and extra effort in post purchase queries. Therefore, we decided to enter exclusive retail. Within the new EV retail stores, we are seeing positive feedback and soon we'll be opening EV exclusive service centers," he said.

Currently, EV contributes to 12 to 13 per cent of overall sales of Tata Motors, "We are looking at going up to around 17 to 18 per cent this fiscal." In 2022, Tata motors held 87 per cent of the market share in EV, however, in 2023 it came down to 70 per cent.

Goldman Sachs in a report, released in May, pointed towards a slowdown in EV sales volume in 2024. "We think our bear scenario calling for a year-over-year decline in EV sales volume in 2024 has become more realistic. Despite the current slowdown in EVs, our base-case scenario still calls for EV sales volume to rise 21 per cent year-over-year in 2024. But under our bear-case scenario, we see EV sales volume declining 2 per cent year-over-year, and negative growth would likely result in oversupply across the EV supply chain," the report quoted.

Showing optimism towards the rapid growth of EVs, Vivek said, "EV is the fastest growing category internationally in automotive, rest of the fuel options are actually plateauing out. So of course, there are cases where some particular company or some explicit model is not doing well, but if you see the growth of EV as a category, it is the highest growth in the automotive segment."

EV sales in India are projected to increase by 66 per cent this year due to state subsidies and development of supporting infrastructure, Counterpoint Research said in a report. With this growth, EVs will constitute around four percent of total PV market by 2024-end, it added.