Tata Motors has launched the facelift of Punch.EV and to talk more about it, I have with me Mr. Shailesh Chandra. Mr. Chandra, thank you so much for joining us today.
Thank you for having me on the show.
What was the thought behind the facelift? Because if you really see the numbers, then entry-level EV market is not expanding as rapidly as others are. So what inspired you to get this facelift out?
See, let me split this into two parts. One is the normal lifecycle management of a product in the car industry. You have seen the facelift in the ICE side just a month back. The other layer of upgrade and innovation is coming from the requirement of the EV industry in this particular segment. As you rightly said, if you bifurcate the EV industry into three parts: cars less than 12 lakh (entry EVs), cars between 12 to 18 lakh (mid-segment), and above that (high segment), you are seeing that in mid and high you have already 10% penetration. But less than 12 lakh cars are actually 65% of the market, which is a 3 million market in which you are only selling about 50,000 EVs, about 1.5%. This is the stark difference. And why is this? Because right now the entry EVs are relegated to being city EVs as a second car in the family because they can't do intercity drives due to limited range of about 250 to 260 km. Also the price is 30-35% more than an ICE car, and it does not give you the confidence of lifetime warranties. That has been solved in the mid and high segment, and therefore you see high adoption. This is the intervention we wanted to bring in Punch EV to address these challenges. We have been able to address them: we are giving 350 km range, lifetime warranty, and the price is very close to ICE. 350 km is sufficient because when we did a survey of intercity drives in the country, the median intercity drive is only 180 km, and 90% of people do less than 400 km. So 350 km is a very usable range. We have posted videos of intercity drives from Bangalore to Chennai, South Kerala to North Kerala, and Delhi to the hills. All show that in EV today you can do those kind of use cases in a Punch EV. So this is the next level of disruption we are bringing in the entry segment. That has been the rationale: bring the refresh every third year from a styling and feature set perspective, and at the same time remove the barriers existing in entry EVs.
So now Punch.EV is on the lower end, there is Tiago.EV, and on the higher end is Nexon.EV, and the price somewhat overlaps. So how is Punch.EV facelift fitting into your product portfolio? What are your expectations from it?
First, there's no overlap. These are very discrete price points. Tiago starts at 7.99 and goes up to about 10-10.5 lakh. Only a slight overlap you'll see with Punch.EV, and where Punch.EV ends is where Nexon.EV starts. The sizes are also very different, so there is hardly any overlap between these cars. There will always be a bit of cannibalization, but broadly these are very distinct categories of cars.
My question is not so much from a cannibalization perspective because there is long range, mid range, and all that changes. My question is in terms of your strategy, where does Punch.EV stand in your product portfolio? How significant is it?
It sits between the Nexon and the Tiago. From a range perspective, from the combination of range, price, and size, it sits in between the two.
And what are those significant changes that you think Punch.EV has gone through which will make it a little bit more attractive than the outgoing Punch.EV?
The range has increased. From a 34 kilowatt-hour battery pack, we have increased it to 40 kilowatt-hour. We have been able to give lifetime warranty. The charging speeds have increased. You can do 20 to 80% in 26 minutes. You can do a 135 kilometer top-up in 15 minutes as you are having tea. And the price is even more compelling than the outgoing Punch.
One of the biggest challenges for the EV market is people's idea that the resale value is not good. First of all, lots of benefits that the first owner gets, the second owner does not get those benefits. Second, there is no standardization of battery health measurement, so a layman does not know the health of the battery, and battery becomes a very significant portion of the cost. So what steps are you taking to make sure that this resale angle also gives a little bit of comfort to the customer?
Yeah, I think that's a very fair question. First, you have to give confidence on the battery pack. For the first owner, you are getting a lifetime warranty, so that gives a lot of confidence. It's a fair ask that when you are selling the car to the next owner, they would like to know the state of health of the battery. This is something we are working on. We are trying to build a pricing engine for used cars, and the state of health becomes a big input. We are working closely with a used car entity to develop the used car market. Until you create demand for used EVs, the resale value will always be a question mark. Even if you come with buybacks, you have to sell the car to the next buyer. So the solution lies in continuously working with used car operators who understand the used car consumer mindset, developing the pricing engine so that the car can be evaluated and a guiding price can be given through the state of health and these parameters. We are working on a pilot with one of them. Also, the supply of cars is less in the market to create a used EV market. So it is going to be a few years of hard work collaboratively with the used car market side, and then you'll see increasing confidence on used car resale values. That's still some time away. Yes, and the supply is also not there today. People have a tendency to use the car for 7-8 years. They are not ready to let go of their EVs. When we launched the Harrier EV, we gave a 1 lakh rupee benefit to customers who had a Tata car or wanted to trade off a current EV with the new EV. They said, 'We want to retain the old EV. We are letting go of the ICE car and buying a Harrier EV.' So people have done their own calculation that they will use the EV for many years. They are not perturbed by new launches. But some would like to upgrade, and for them we are trying to give options and benefits in the interim.
