The MD of Tata Passenger Electric Mobility, Shailesh Chandra, has declared that the falling cost of batteries may cause mass-market electric cars with a 250 km range to enter the Indian market at a price point that is comparable to that of internal combustion engine (ICE) vehicles. He expects to reach this goal in the upcoming eighteen months.
While majority purchasers prefer EVs at the same price point as ICE vehicles, early adopters of EVs are willing to pay a premium of 20–30%. In contrast to the inflationary characteristic of internal combustion engines, Chandra highlighted a deflationary trend for electric vehicles, citing the declining costs of lithium iron phosphate (LFP) battery packs, which Tata Motors has specifically highlighted.
The main causes of the current 25–35% cost difference between EVs and conventional ICE-powered cars are import content and expensive batteries. Chandra expressed hope about addressing this disparity, pointing out that battery prices have now dropped to an unprecedented level of roughly $130 per kilowatt-hour. He thinks Tata Motors can price its EVs competitively with the help of the government’s production-linked incentive (PLI) scheme, a 5% GST rate, and the advantages of declining battery costs.
With more than 85% of the Indian market for electric vehicles, Tata Motors is a market leader in the country and has invested USD 2 billion, or around Rs 16,600 crore, in the EV industry. By 2025, the business wants to have 10 electric cars in its lineup, and by that year, it wants EV sales to account for 30% of all sales.
Additionally, Chandra shared information about Tata Motors’ long-term commitment to becoming net carbon neutral. Acknowledging the challenge of forecasting the adoption of novel technology, he underscored the necessity of shifting to Battery Electric Vehicles (BEVs) in order to achieve sustainability. By 2030, Tata Motors wants to be 50% net carbon neutral. This is an ambitious goal.
Though there have been worries recently about a downturn in the global EV market, Chandra provided an alternative viewpoint. He mentioned that the global BEV market grew by 33% in the first nine months of 2023, with significant expansion in important markets including China, Europe, and the US. He reaffirmed Tata Motors’ belief in the future of the Indian electric vehicle market, pointing out the market’s robust growth rates and the company’s dedication to taking the lead in India’s shift to electric mobility.