Tata Motors anticipates affordable EVs with 250 km range will have price parity with ICE vehicles within 18 months
Shailesh Chandra, MD of Tata Passenger Electric Mobility, has recently announced that the decreasing cost of batteries could lead to the arrival of mass-market electric cars with a range of 250km in the Indian market, priced similarly to internal combustion engine (ICE) vehicles. He anticipates this milestone within the next 18 months.
While early adopters of EVs are willing to pay a premium of 20-30%, mainstream buyers seek EVs at the same price point as ICE vehicles. Chandra emphasized a deflationary trend for electric vehicles, in contrast to the inflationary nature of internal combustion engines, pointing to the falling costs of lithium iron phosphate (LFP) battery packs, particularly noted by Tata Motors.
The current 25-35% cost disparity between EVs and traditional ICE-powered vehicles is primarily attributed to import content and high battery costs. With battery prices now reaching an unprecedented low of around $130 per kilowatt-hour, Chandra expressed optimism about closing this gap. He believes that, with a 5% GST rate, the benefits of falling battery costs, and support from the government’s production-linked incentive (PLI) scheme, Tata Motors can competitively price its EVs.
Tata Motors, a pioneer in India’s electric vehicle market with over 85% market share, has committed USD 2 billion (around Rs 16,600 crore) to its EV business. The company plans to have 10 electric vehicles by 2025 in its lineup, and it is aiming for EVs to constitute 30% of its total sales volumes by the same year.
Chandra also provided insights into Tata Motors’ long-term commitment to achieving net carbon neutrality. While recognizing the difficulty in predicting the penetration of new technologies, he emphasized the imperative nature of transitioning to Battery Electric Vehicles (BEVs) for sustainability. Tata Motors has set an ambitious target of achieving 50% net carbon neutrality by 2030.
Despite recent concerns about a slowdown in the global EV market, Chandra offered a different perspective. He cited a 33% growth in the BEV market worldwide in the first nine months of 2023, showcasing substantial growth in key markets such as China, Europe, and the United States. He reaffirmed Tata Motors’ confidence in India’s electric vehicle market’s future, highlighting strong growth rates and the company’s commitment to playing a pivotal role in India’s electric mobility transition.