'There is a sharp jump that we have seen in bookings of EVs... The jump, at least in our case, in just two months, it is about 2 to 2.5 times of what it used to be.'
Demand for electric vehicles (EVs) in India went up 2-2.5 times since the conflict in West Asia began on February 28, and Tata Motors Passenger Vehicles (TMPV) is planning to increase its EV production capacity by 50 per cent to 15,000 units per month over the next quarter or so, its Managing Director and Chief Executive Officer Shailesh Chandra said on Thursday.
However, this depends on how quickly component suppliers can ramp up output.
Chandra, meanwhile, raised concerns over India's proposed transition to higher ethanol-blended petrol beyond E20.
E20, a fuel comprising 20 per cent ethanol and 80 per cent petrol, became mandatory in India earlier this year.
Key Points
- Tata Motors said EV bookings surged 2-2.5 times after the West Asia conflict pushed crude oil prices higher.
- The company plans to raise EV production capacity by 50 per cent to 15,000 units monthly over coming quarters.
- Supply-side bottlenecks at component manufacturers are restricting deliveries despite rapidly rising consumer demand for electric vehicles.
- Shailesh Chandra warned higher ethanol blending beyond E20 could reduce fuel efficiency and accelerate component wear in vehicles.
- Tata Motors expects rising fuel costs to favour EVs and CNG vehicles instead of increasing demand for smaller cars.
EV Demand Surge
With the conflict pushing up crude-oil prices, the government is evaluating higher ethanol blending to reduce dependence on imported crude oil.
Chandra is of the view that a higher ethanol content would reduce fuel efficiency because of it being less energy-efficient than petrol, while vehicle components not designed for such blends could wear out faster due to higher moisture in them.
However, he backed the broader objective of ethanol blending for energy security and said the government was consulting automakers before taking a decision.
He also opposed demands for cuts in goods and services tax on flex-fuel vehicles, saying any support should instead lower fuel prices for consumers.
Flex-fuel vehicles are designed to run on a fuel blend that has 85-100 per cent ethanol.
Tata EV Capacity Expansion
"There is a sharp jump that we have seen in bookings of EVs... The jump, at least in our case, in just two months, it is about 2 to 2.5 times of what it used to be," Chandra said during a media interaction on the sidelines of the launch of the facelifted Tata Tiago and Tiago EV.
He added that the increased interest in EVs had become "even sharper" in the past 15 days and was strongest for those priced below Rs 15 lakh.
"In the case of EVs, internally we don't have a problem.
"But on the supplier side, as I said, we will have to agree on a certain schedule for three months, six months, one year and so on ... In certain cases, there is an investment in production lines that they might have.
"That can take three-four months in certain cases," he said.
Supply Constraints Hit Sales
Chandra said TMPV's EV booking mix had climbed to 33 per cent in May, although sales remained lower because of component-supply constraints.
He said the company's EV market share "theoretically would have skyrocketed" if it had enough supply.
He also projected EV penetration in the Indian passenger-vehicle market, now 5-6 per cent, could rise to 8-10 per cent this year if supply constraints ease.
TMPV was India's top EV maker last month.
Its retail sales of electric cars in April stood at 8,543 units, recording a growth rate of 77.17 per cent year-on-year.
Overall, about 23,506 electric cars were sold in April via retail outlets, recording a growth rate of 75.14 per cent year-on-year, according to the data released by Federation of Automobile Dealers Associations of India (Fada) earlier this month.
Ethanol Blending Debate
On ethanol blending, Chandra said: "Whether it impacts fuel efficiency or not, it's a technical fact.
"How you can deny that it has a lower calorific value," he asked.
"The more ethanol mix you bring, there will be a drop (in efficiency)," he added.
He also said some vehicle components could fail faster if they were not designed for higher ethanol content.
Chandra said the Society of Indian Automobile Manufacturers (Siam) was in discussion with the government on this.
He added TMPV did not support demands for lower GST on flex-fuel vehicles because the increase in manufacturing cost for such vehicles did not justify a large tax reduction.
Fuel-Efficient Powertrains Rise
On the broader passenger-vehicle market, Chandra said TMPV continued to expect an industry growth rate of around 10 per cent in FY27, although the evolving geopolitical situation and rising fuel prices could affect consumer sentiment and inflation in the coming months.
He said higher fuel prices were unlikely to push customers towards smaller cars but would instead shift demand in favour of more fuel-efficient technologies such as EVs and compressed natural gas (CNG) vehicles.
"More than small cars, it is the powertrain that will win here," he said.
He said TMPV's passenger-vehicle mix comprised 15-16 per cent EVs, those running on CNG 25-27 per cent, diesel ones 11-13 per cent, and the rest petrol-driven.
Feature Presentation: Ashish Narsale/Rediff
