More than half of all cars sold by Tata Motors in the last three months were electric vehicles
- Tata Motors-owned Jaguar Land Rover reported a second successive quarter-on-quarter recovery with retail sales growing 13% to 128,469 vehicles.
- 53% of JLR’s retail sales in the third quarter were from electric vehicles.
Tata Motorssaid that EVs' contribution is ‘poised for further growth in 2021 and beyond.’
- The share price of Tata Motors was trading nearly 12% higher at 11:00 am, nearing its 52-week high.
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This brings the company's overall share of electric vehicles in its 2020 sales to 43.3%, and the management is upbeat on its future outlook. Tata Motors said that EVs' contribution is ‘poised for further growth in 2021 and beyond.’
This follows a 21% growth in domestic sales in December for Tata Motors. Investors are cheering the improving sales, recovery in sentiment, and the company's optimistic outlook. The share price of Tata Motors rallied nearly 12%, trading near its 52-week high at 11:00 am. It has surged nearly 25% in two trading sessions.
AdvertisementIn fact, the stock has gained nearly 83% in the past 3 months.
Electric vehicles: the next growth driver
After recently launching Jaguar XE, Jaguar XF, and Land Rover Discovery, the company is building further on its expansion plans in the EV segment. It remains committed to its electrification strategy and has a growing portfolio of electrified Jaguar and Land Rover vehicles — extending to 12 models across its portfolio. JLR also plans to continue with the rollout of its new range of 21 Model Year vehicles.
Over the last few years, Tata Motors has channelised a significant part of its efforts towards the development of electric vehicles and the results are showing now. Suraj Ghosh, principal analyst at IHS Markit says that while Tata began its journey with the Tigor EV, it's the success of Nexon that made the difference. “The Nexon has hit a nice balance between affordability and parity with ICE-vehicles (internal combustion engine vehicles) as it demands only about 20% premium over its top-trim diesel automatic variant,” he told Business Insider.
In fact, the Tata Nexon EV clocked 2,200 units in sales in just ten months since its launch and is the best-selling electric car in India. And after the considerable success of its Tata Nexon electric vehicle, the company has a slew of EV launches lined up for the year ahead — from Tata Altroz EV to Tata Tiago.
Ghosh adds that what sets Tata Motors apart from its competitors in its efforts to build the EV business is its strategy to ‘leverage its group companies’ capabilities to build an ecosystem’ for its electric vehicles.
AdvertisementShailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors, told The Hindu Business Line that, “a smart strategy with a clear focus on breaking the key EV barriers and partnerships with group companies such as Tata Power, Tata Chemicals, Tata AutoComp Systems, and Tata Capital for establishing the EV ecosystem, has paid dividends for the company.”
Tata Motors’ plans to boost its EV business in India
The homegrown automaker is working towards building a range of affordable electric cars. A report suggests that the company plans to price its green cars at not more than 15-20% premium to conventional petrol/diesel vehicles.
Although the company is optimistic about EVs growth and contribution towards its revenue, the analysts remain cautious. According to Ghosh, while Tata Motors is showing high growth (albeit on a low base), it needs much higher volumes to become mainstream. “It’s undoubtedly a great proposition, but the inflexion point will arrive only when it achieves parity compared to its ICE-powered counterparts in terms of price, range, affordability and ease of use,” he added.
Meanwhile, Tata Motors has clarified on the market rumours of a deal with Tesla to manufacture its electric vehicles in India. In a statement to BSE, the company denied any talks of collaboration and said that they have "not taken any decision regarding a strategic partner for its PV business."
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