Indian automaker Tata Motors has cut the price of its cars by 120,000 rupees ($1,450), its electric vehicle (EV) unit said on Tuesday, marking the first price cut by an electric car maker in the country.
Currently, electric models account for just 2% of Indian car sales as buyers remain wary of higher upfront costs despite lower operating costs and range anxiety persists.
Vivek Srivatsa, chief commercial officer of TPG-backed Tata Passenger Electric Mobility, said: “As battery prices have softened recently and considering that their prices are likely to fall in the foreseeable future, we have chosen to proactively pass on the resulting benefits directly to customers.”
The price of the best-selling Nexon.ev has now fallen 1.4% to Rs 1.45 million. According to the Tata website, the price previously started at Rs 14.70 lakh.
The company, which dominates electric car sales in India, has also cut the price of its electric small car Tiago by Rs 70,000. The base variant is now priced around 8.1% lower at Rs 799,000.
Launched in 2020, the Nexon.ev is India’s cheapest electric SUV until Tata’s Punch EV is launched in 2024 at a price of Rs 12 lakh.
Global electric car sales have also slowed, with U.S. automaker Tesla launching a price-cutting war to maintain its sales lead over rivals such as China’s BYD.
Jay Kale, vice president at Elara Capital, said: “Tata’s price cuts in India may prompt its competitors to also increase vehicle pricing and launch newer electric vehicles at aggressive prices.”
However, this is in stark contrast to the Indian electric two-wheeler market, where the upcoming Ola Electric and the Hero-backed Ather are locked in a price war.
Tata started distribution of pure electric vehicles in September and plans to launch 10 electric vehicles in the next three to four years. It also plans to increase the proportion of electric vehicle sales in total vehicle sales to 25% by 2025 from 9.3% in fiscal 2023.
Shares of Tata Motors, which competes with the likes of Mahindra and MG Motor, fell 1.9% after the news.
© Thomson Reuters 2024
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