Out to change perceptions about non-traditional types of car ownership models, Tata Motors is going aggressive with the Tata Nexon EV‘s subscription model and quickly adapting as per the customer feedback. Just over a month after announcing the subscription plans on 6 August, the company introduced revisions on 21 September.
ElectricVehicleWeb.in interviewed Pankaj Jhunja, Head – Mobility Services, Tata Motors, to gain some insights into the Tata Nexon EV subscription program. Jhunja shared some interesting details, many of which the company hadn’t disclosed in the related press releases.
How many users have signed up for the Tata Nexon subscription?
Pankaj Jhunja: In general, there is a very high-interest subscription from the time we announced it in Jan end along with the Tata Nexon EV launch. This interest was further crystallized when we announced the subscription pricing in August, followed by the Festival limited volume/tenure offer just announced.
While we cannot share the numbers, we are excited at the level of interest and engagement demonstrated by the registered customer base, with whom we are engaging in explaining this new model and helping reaffirm their rationale for looking at subscription model as compared to ownership.
This launch has allowed us to expand our customer base to bring consumers to the brand who because of their different mindset, of preferring ‘usership’ over ownership, were not being addressed earlier.
We have started deliveries of the Tata Nexon EV via the subscription model to the first set of customers who completed the onboarding journey earlier this week. We shall share their feedback and experience from time to time.
Could you talk about the profile of users who have signed up for the subscription service?
Pankaj Jhunja: The profiles of customers who have signed up for the subscription program are quite diverse at the moment in terms of demographics, reasons for looking at subscription, anticipated usage, etc. Over a period, we will see this evolving and sharpening as people better understand this proposition and the benefits it offers in line with their requirements and expectations.
Having said that, the initial traction is coming from people wanting to try out the EV technology and the related experience. It is also people who are looking for short term access to personal mobility or people who had leasing experience through their stay overseas or through corporate programs.
These are early days, both for Electric vehicles as well as subscription model, and we are looking at the customer profile very closely in order to keep refining our offering for them as done recently with the launch of the Festival limited volume/validity offer.
To give you a snapshot amongst the first set of customers, to whom we have delivered vehicles already, are a Medical Doctor, young entrepreneur, IT professional etc.
What is the colour of the number plate when one leases the Tata Nexon EV? Some users believe that a black number plate gets them stopped by the traffic police often.
Pankaj Jhunja: The registration plate is Green and Yellow, being an EV registered under a Self-Drive rental license. The car will have all the supporting paperwork available along with the car to show in case of any queries raised by anyone checking for the same.
Would the car be registered in the name of Orix?
Pankaj Jhunja: The car is registered in the name of Orix Auto Infrastructure Services Ltd.
Subscription for INR 34,900 per month for 36 months, works out to about INR 12.57 lakh (not counting the refundable deposit). The Tata Nexon EV on road price in a city like Mumbai is around INR 15 lakh. Some users feel a 3-year loan and savings from the residual value would be higher. And maintenance is lower than an ICE car due to the lack of oils, filters and plates, apart from road tax exemption and state subsidy up to INR 1.5 lakh, so benefits don’t seem great as advertised – how do you justify the subscription plan to these type of buyers?
Pankaj Jhunja: When the comparison is run in this fashion we are not comparing apple to apple. When one looks at ownership cost in most cases one is not adding all the expense elements one will spend on over 3 years – on interest (on INR 15 lakh loan), insurance, maintenance, roadside assistance etc. Once all costs are accounted for in the entirety, the subscription offer comes very close to what a user will spend otherwise in owning a car including the residual value
We are not even putting a premium here on the benefits of a hassle and stress-free ‘usership’ model, where sitting at home the subscriber gets a brand new car with full documentation, service and repairs taken care of, and with no concern or effort towards selling the car when they want to dispose it off.
In order to arrive at a fair comparison, we are handholding the customers who call in, requesting them to add all the expense components in order to get a clear idea.
Finally, we understand that for some customers vehicle remains an asset they want to own, in which case we suggest them to look at attractive financing options and go for owning a Tata Nexon EV.
On the State subsidies, while Maharashtra has already started offering the same on different elements, in Delhi and Telangana the policy has been announced and the operational notification for accessing the same is still pending and expected very shortly. In spite of that, we have offered very attractive pricing anticipating the same, in order to give the customer an attractive cost value proposition.
Why is the speed limit capped specifically at 80 km/h?
Pankaj Jhunja: Being a Green and Yellow registered plate – having a speed limiter is a regulatory requirement, which is in line with the speed limit defined for most city and highway roads in the country at this time at 80 km/h.
The Tata Nexon EV has given a massive image makeover for electric cars in India. What is the best feedback you’ve gotten from a customer?
Pankaj Jhunja: One consistent feedback we are getting on the Tata Nexon EV is that this product has found a very sweet spot in balancing product features, range, EV technology, target operating environment in an aesthetically pleasing package to create a WOW product in the EV space at a very attractive price – which is generating the interest in the EV product even with customers who were not looking at the same.
Besides price reduction, what measures are you taking to increase the popularity of the Tata Nexon subscription scheme?
Pankaj Jhunja: If you look at the limited tenure/volume Festival offer introduced we have not only looked at pricing but also at an overall simplification of the engagement and on-boarding process as well as responding to the customer feedback received. One main feedback was to introduce a shorter tenure than 18 months and hence the 12-month tenure. Elements like premature termination calculation, elimination of lock-in period concept have been adjusted towards making the process more transparent and easy to understand.
This approach of taking on board customer feedback and learning will be an ongoing process allowing us to address and bring on board a wider set of customers to subscription.