Tata Motors not threatened by Tesla’s launch in India, says its CEO

With the world’s most popular electric car maker, Tesla, announcing its Indian entry early next year, one would assume home-grown players like Tata Motors and Mahindra, which are trying to boost their electric presence, are having sleepless nights already. However, that is clearly not the case, as Tata’s MD and CEO, Guenter Butschek told Business Insider.

Butschek told the publication that Tata was not competing with Tesla in India, which will certainly be the case at least during the initial years as Tesla’s product portfolio is expected to start in the INR 45-50 lakhs range, whereas the most expensive Tata (which has a combustion engine) tops at INR 20.3 lakhs, and the sole Tata electric car, the Nexon EV costs up to INR 16.25 lakhs (all prices ex-Showroom).

1000th Tata Nexon EV rollout
Tata Motors says it has 62 per cent market share in the electric vehicle segment in the first quarter of this financial year. The 1000th Nexon EV was made in just 7 months from its launch.

Going forth, upcoming Tata electric cars are unlikely to exceed that price point as the carmaker searches for sustainable growth volumes to fulfill its dreams of becoming India’s top electric car maker.

This year, the improved Tata Tigor electric is expected to join the range, and offer buyers a sub-10 lakh electric car with a 200+ km range. This will be based on the Tigor facelift and will carry over the redesigned headlights and grille, along with changes to the seat upholstery and door trims.

Other Tata electric car launches planned until 2022 include the Tata Altroz electric, a compact electric SUV based on the Tata H2X/HBX concepts and updates to the existing Nexon EV. The priciest electric car from Tata, if it is green-lit for production and approved for electric propulsion, will be a SUV based on the Tata Sierra concept, which was shown this year at the Auto Expo. Tata’s design chief, Pratap Bose, told Electric Vehicle Web that he would be trying hard to ensure the concept sees production, but even then, we are looking at a INR 20 lakhs, halo Tata product going by estimates.

Tata Sierra EV Concept side view - Auto Expo 2020
The most expensive Tata electric car which we could see would be the Sierra concept based SUV, if it is greenlit for production.

The only way Tesla could go up against Tata electric cars, or other mass-market EVs, is if the proposed Tesla Model 2 – expected in 2023 – sticks to its development costs of being a USD 25,000 (INR 18 lakhs) electric Tesla, and is localized in India to maintain that sticker price. To create real disruption, Tesla would need an Indian platform or base on which it can generate electric cars in the INR 10-15 lakh price bracket, a proposition that looks unlikely for the near future. Even at INR 18 lakh, the Tesla Model 2 would not be cheap enough for Maruti and Hyundai car buyers to consider as an alternative.

In its part, the Indian government will have to ensure its focused approach towards electric cars by maintaining the 5 per cent GST, while state governments stick to their incentives of waiving road tax on electric cars, in order to convince a Tesla-like player for local manufacturing.