EVs Are Becoming As Profitable As ICE, No Rush to Bring Hybrids Right Now: Tata Motors’ Shailesh Chandra

Even as global automakers recalibrate electric vehicle strategies amid slowing demand and profitability concerns, Tata Motors says it remains committed to electric mobility and sees no immediate need to introduce hybrid vehicles into its passenger vehicle portfolio.

“From a mid- to long-term perspective, we see EVs becoming equally profitable, if not better than ICE. We are on a very healthy profitability. It's not compromised significantly as compared to ICE,” Shailesh Chandra, Managing Director and CEO of Tata Motors Passenger Vehicles, said, adding that while ICE vehicles will face rising cost pressures due to stricter emission norms and regulatory requirements, EV costs are structurally becoming more affordable over time.

“Hybrid is always needed by different manufacturers mainly from a CAFE compliance perspective or players who have exited diesel. For us, we don't see an immediate need for bringing hybrids in our mix. There is no hurry to bring hybrid, but we have the capability to deliver that at short notice as and when it will be needed,” he said. Tata Motors currently operates a multi-powertrain strategy spanning petrol, diesel, CNG and electric vehicles. Together, CNG and EVs now contribute 43% of the company’s passenger vehicle sales volumes.

The company posted its highest-ever annual EV sales in FY26 at over 92,000 units, marking a 43% year-on-year increase while maintaining over 40% market share in the segment for the seventh consecutive year. The broader Indian EV passenger vehicle industry crossed the 2 lakh annual sales milestone for the first time, growing over 80% year-on-year.

According to Chandra, demand momentum for EVs has accelerated further in recent months, helped by geopolitical developments, fuel price concerns and recent public messaging from Prime Minister Narendra Modi supporting EV adoption.
“Since March, we have been seeing that enquiries and bookings for EVs have jumped and it sustains. Bookings have risen 25-30% following the West Asia crisis and expectations of potential fuel price increases,” he said. 

The company said new launches such as the Harrier.ev and refreshed Punch.ev, along with initiatives like lifetime battery warranty, improved charging infrastructure and higher driving range, have helped reduce mainstream adoption barriers.
Chandra said retail demand through April and May remained strong and reiterated expectations of nearly 10% industry growth in FY27, barring any severe macroeconomic disruptions.

“There’s no question of stopping or postponing any of our capex on products,” he said. The company guided for capital expenditure to remain in the range of 6-8% of revenue, potentially rising by another percentage point due to its aggressive product pipeline.

FY26 proved to be a mixed year financially for the group. Tata Motors reported record passenger vehicle sales of over 6.4 lakh units, with 15% year-on-year growth and strong momentum in the second half of the fiscal year. However, on a consolidated basis, revenue fell 8.3% year-on-year to ₹335,600 crore, while profitability remained under pressure due to multiple headwinds at its British luxury arm Jaguar Land Rover, including tariffs, a cyber incident, commodity costs and weakness in China.