Tata Motors PV To Stick To EV-First Strategy, Keep Hybrids in Reserve: CEO Chandra

Tata Motors Passenger Vehicles Ltd (TMPV) will continue to prioritise electric vehicles over hybrids in India, even as it keeps hybrid technology ready for deployment if market conditions change, according to Managing Director and CEO Shailesh Chandra.

“We have betted on electric. We have been proactive on electric and we'll continue to do so,” Shailesh Chandra, Managing Director and CEO, Tata Motors Passenger Vehicles, said during a media call held to discuss the company's Q1 FY27 performance.

“If the market situation demands, we are ready with the tech. But we would be reactive as and when needed,” he said, referring to hybrids.

Chandra expects electric passenger vehicle penetration in India to reach 10% by the end of FY27, from more than 8% currently. He said EV and hybrid penetration were broadly comparable about two years ago, but their trajectories have since diverged.

“Hybrids have remained more or less stable at 2 to 1.5%. And electric is now more than 8%,” Chandra said.

The trend was visible in June. Electric passenger vehicle retail sales more than doubled to 31,823 units from 15,318 units a year earlier, according to Federation of Automobile Dealers Associations (FADA) data. EV penetration increased to 7.7% from 4.8% over the same period.

The shift extends beyond EVs. CNG, hybrid and electric vehicles together accounted for 40.35% of passenger vehicle retail sales in June, as higher fuel prices following the Middle East conflict pushed more buyers towards alternative powertrains, according to FADA.

CAFE Norms Strengthen EV Case

Tata Motors also expects tighter Corporate Average Fuel Efficiency (CAFE) norms to strengthen the business case for EVs.

“Clearly, if you see through the lens of policies, which is CAFE 3 and all, the stringency levels which are coming in and people have to also plan for CAFE 4 later on. The biggest lever that you have in hand is electric vehicles,” Chandra said.

He acknowledged that other automakers could use hybrids to help meet their fleet-level fuel-efficiency requirements and that a market for the technology would remain.

“There will be players who would also leverage the hybrid as a technology mostly for CAFE,” he said.

For Tata, however, hybrids will remain a fallback rather than the centre of its powertrain strategy.

Tata EV Volumes Accelerate

Tata's EV volumes have been growing sharply despite growing competition.

The automaker sold more than 34,000 EVs in Q1 FY27, its highest quarterly volume, with electric vehicles accounting for around 19% of its passenger vehicle sales. In July, the share increased to 24%, with monthly EV wholesales crossing 15,000 units for the first time.

Tata is also increasing EV production as demand exceeds current supply. Chandra said during the call that the company had raised monthly output from around 9,000 units to more than 15,000 and would ramp it up further.

The wider Indian market is also expanding quickly. June electric passenger vehicle registrations rose 107.8% year on year, with Tata retaining the largest share at 12,187 units, followed by Mahindra & Mahindra and JSW MG Motor India, according to FADA data.

For Tata Motors, the acceleration reinforces its decision to stay EV-first. Hybrids remain technologically available, but Chandra made clear that Tata would turn to them only if changes in customer demand or the market make that necessary.