Tata Motors, India's largest commercial vehicle manufacturer, is shifting its electric vehicle (EV) strategy to focus on generating demand without relying on government incentives, according to comments by Girish Wagh, Executive Director, during a post-earnings call.
The comments come as FAME 2, a key government scheme promoting EV adoption, expired in March 2024. To address the gap, Tata Motors launched a new 1-tonne variant of its ACE electric small commercial vehicle (SCV). While 17% more expensive than the previous 600 kg FAME-subsidized variant, the company claims a 30% improvement in Total Cost of Ownership (TCO) for customers.
"We were preparing for this post-FAME environment and have launched an exciting range of products," Wagh said, highlighting Tata Motors' proactive approach.
The company boasts over 4,300 ACE EVs on Indian roads, accumulating 16 million kilometers and clocking high repeat purchase orders. Additionally, Tata Motors is a leader in electric buses, deploying over 1,700 units in FY24, bringing its total fleet to 2,600, which have cumulatively covered over 140 million kilometers.
"Going ahead, we continue the engagement with government agencies," said Wagh, expressing confidence in the payment security mechanism for electric buses. He added, "We are now working on options for the asset-light business model," hinting at potential participation in future tenders with a focus on operational efficiency.
Tata Motors' comments signal a strategic shift towards building a sustainable EV business model independent of government subsidies. The focus on TCO and exploring asset-light options suggests the company is confident in the long-term viability of its electric vehicle portfolio.