Tata Motors has formally requested targeted incentives for entry-level electric vehicles. The company also wants support for electric cars used in the fleet segment. These requests are for inclusion under the PM E-DRIVE scheme in the upcoming Union Budget.
CEO Highlights Pressure on Entry-Level EV Market
Shailesh Chandra, the Managing Director and CEO of Tata Motors Passenger Vehicles, spoke with news agency PTI. He acknowledged recent government actions have helped revive passenger vehicle demand. However, he stated entry-level electric vehicles continue to face significant market pressure.
Chandra expressed appreciation for steps like GST 2.0, repo rate reductions, and tax regime changes. He said these measures played a key role in boosting overall passenger vehicle demand. They also helped the electric vehicle segment grow.
"I would like to really appreciate the government for reviving the PV industry and the electric vehicle side as well," Chandra told PTI. "Two things which can be considered in the Budget. One, there is a lot of pressure on the entry segment on the EV side. If the government would like to consider some level of incentives."
He added that GST reforms have led to lower prices for petrol cars. This development has further increased competitive pressure on entry-level electric vehicles.
Call for Renewed Policy Support for Fleet Electric Vehicles
Chandra also emphasized the critical importance of electric cars used in the fleet segment. He provided specific data to support his argument.
According to his figures, fleet electric vehicles account for only about 7 percent of overall passenger vehicle sales. Despite this small sales share, they contribute nearly 33 to 35 percent of all passenger kilometers traveled.
Chandra noted these vehicles received support under the earlier FAME-2 scheme. However, they are currently not included in the newer PM E-DRIVE scheme. He argued strongly for their inclusion.
"A fleet car runs five times more than a passenger car," Chandra explained. "Therefore, the support that you give to this segment has a multiplier impact. It benefits the environment significantly. It also reduces our dependence on imported oil."
He suggested the government should consider including fleet electric vehicles under the PM E-DRIVE scheme. This move would provide much-needed policy continuity.
Pricing Challenges and Future Decisions
On the topic of vehicle pricing, Chandra addressed current economic pressures. He said foreign exchange challenges and elevated commodity prices have impacted company revenues.
This impact amounts to around 2 percent of revenues. Importantly, Tata Motors has not yet passed these increased costs on to consumers.
Chandra indicated a decision on potential vehicle price hikes would come soon. The company will announce its plans in the coming days. This timing aligns with similar moves being considered by other automobile manufacturers across India.
The automotive industry faces a complex balancing act. Companies must manage input cost pressures while remaining competitive in the market. They also need to support the government's push for electric vehicle adoption.
