Tata Motors bullish on EV growth story in India despite Trump backtrack
This story was originally published at 20:00 IST on 29 January 2025
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--Tata Motors: See gradual improvement in demand going forward
--CONTEXT: Comments by Tata Motors' management in post-earnings media call
--Tata Motors: Oct-Dec vehicle demand not as good as expected
--Tata Motors: See JLR volume pick-up coming from UK, US
--Tata Motors: Inventory with retailers down significantly from early 2024
--Tata Motors: Hope to keep discounts lower than global levels going forward
--Tata Motors: See EV demand growing in India despite US revoking mandate
--Tata Motors: Can modify JLR vehicles to fossil fuel or electric on demand
By Avishek Rakshit & Arya S. Biju
KOLKATA – At a time when the US, one of the fastest-growing electric vehicle markets in the world, backtracked on its electric vehicle adoption plans, thereby sparking some degree of uncertainty, Tata Motors Ltd. is bullish on its EV growth story in India.
"As far as India EV demand is concerned, we expect to see that continue to pick up from here on because there are various reasons. One, the TCO (total cost of ownership) is extremely attractive for customers. There is significant product action coming from every player in this market. And therefore, the excitement is only going to continue," Group Chief Financial Officer, P.B. Balaji said at a virtual post-earnings interaction.
US President Donald Trump on Jan. 20 revoked a 2021 executive order which, although not legally binding, sought to ensure that half of all vehicles sold in the US by 2030 were EVs. This raised some uncertainty amid automotive companies across the globe as the US is the second-largest automotive market in the world after China.
Balaji said that across the Indian automotive industry, vehicle makers are "doubling down" on EV manufacturing and it is inching closer towards becoming a mainstream vehicle for consumers. In India, the automobile market is still dominated by fossil fuel-powered cars.
Out of the 139,829 passenger cars Tata Motors sold during the December quarter, 11.5%, or 16,119 vehicles were EVs. While total car sales volume, including EVs, was up by only 1% on year, EV sales were up by 6% on year.
In its global markets, particularly in Europe and China, Tata Motors is keeping its options open and will act accordingly to demand conditions for EVs.
"As far as JLR is concerned, the situation is different. If I look at the three products, that is, the Range Rover, Range Rover Sport, and the Defender, all are on the MLA platform (Modular Longitudinal Architecture). These are flex-fuel architectures," Balaji said. "We can do a diesel, we can do a petrol, we can do a plug-in hybrid, we can do battery electric on that. And therefore, we are neutral to how the consumer demand plays out in different ways."
Meant to be sold globally, the testing for Tata Motors' Range Rover EV is nearing completion, and Jaguar's first four-door EV, to be built in the UK, will use a dedicated fast-charging Jaguar Electric Architecture.
Balaji said that vehicle demand in India is expected to improve in the coming months despite consumer demand during Oct-Dec falling short of the company's expectations. The inventory with the car retailers, which led to high discounting to clear the stockpile in early 2024 has bottomed out, and vehicle stocks are now significantly down. In the coming months, Tata Motors is expecting to keep its discounts on vehicles lower than global levels.
The official said that vehicle demand in China, for its Jaguar and Land Rover lineup, is expected to bounce back after the cash crunch with car retailers there gets addressed. Till that time, the US and UK will be the key demand drivers followed by West Asia and India.
Tata Motors reported a 22% year-on-year increase in its consolidated net profit at INR 54.5 billion in the December quarter but missed the Street consensus of INR 64 billion. The revenue was up 3% on year to INR 1.1 trillion.
On Wednesday, shares of Tata Motors closed 3.3% up at INR 752.5 on the National Stock Exchange. The company had declared its results after trading hours. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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