You're watching NDTV. Tata Motors has launched the updated Punch electric. To talk more about the product and overall strategy of the brand, I'm joined by Mr. Shailesh Chandra. Thank you so much for your time, sir. Thank you for coming. Sir, you have been an early mover in the electric market. What are the key learnings you had over this period?
Multiple learning. I think it would be a big laundry list, but over a period of time we have learned more about the customers. We also know that different phases of technology adoption, different kind of customers do come into the market and go for adoption. Also, we have seen that as you cross the 1 lakh mark in the market, there are ecosystem players who start also joining you to build the whole ecosystem around you. So, you see a very different behavior as the industry evolves of how confident the ecosystem players feel. You also see multiple OEMs then also feeling confident of entering this segment. From a technology perspective, we have seen the technology cost-wise, efficiency-wise, compactness and all has significantly increased. We see a lot of participation of global as well as local supply into localization within the country. And all this, you know, has had a cumulative effect of a market which 6-7 years or say 7-8 years back when we had entered this segment where the industry volumes used to be say 1,000 numbers or 2,000 numbers. This year it will be more than 2 lakh numbers. So, that's how the evolution of this has been. And hope that this should grow much faster in the next 5 years.
Well, numbers are encouraging. Penetration of EVs are going higher, but we see there's a huge segregation in numbers. If you look at 12 to 15 lakh bracket and over products are becoming common, more accepted. But the entry-level EV segment is under pressure. If I may say so. But you are among the very few players who have products in this market. Why do you see this market to be challenging under 12 lakh rupees?
You know, if you think of yourself as a business, when you see the market below 12 lakh for EVs, it's a very difficult segment to serve because the price bucket that you have to give the range to the car and give all the features that one expects, it's a very difficult task. It is working well in the 12 to 18 lakh or 18 lakh plus segment because you have that kind of a cost buffer. You also have a better GST arbitrage, which is 35% as compared to an entry segment where the GST difference between an ICE vehicle and an EV is only 13%, and you have to package that much battery to give the range whether it is a greater than 18 lakh car or a less than 12 lakh car. So, it's a very difficult segment to serve. But as you rightly said, less than 12 lakh is the market in India. 65% of the customers are buying cars below 12 lakh. So, if we are not able to electrify this segment right now, as you rightly said, greater than 12 lakh cars, you have 10% penetration of EVs. Less than 12 lakh, it is only 1.6%. If 30 lakh is not electrified, then it will not be the right electrification or we can't say that India has electrified. So, therefore, we have been very committed to this space. We have addressed these three concerns in the mid and high segment to drive a 10% penetration. We have tried to address those three concerns and therefore we hope that the customers would respond. I mean, just imagine today in the less than 12 lakh segment, which is a 30 lakh segment, it is 1.6% penetration, which is only doing 50,000 a year. If this becomes 10%, we are talking about 3 lakh. So, it's the biggest segment to drive penetration, I would say.
I mean, numbers are huge in lakhs, and if you look at global trends, developed markets, I believe, compared to India, in India things are much more difficult, much more challenging as an OEM to make products. So, do you see there's an intervention from government that should come in? For example, something you said like 5% versus 18%. Do you see certain taxation or a different way of helping this segment boost?
You know, I think, to be fair to the government, they have done a lot. They have kept the GST rates low. They have brought in different kind of schemes to support investment into EV industry including the PLI. Different state governments are giving road tax waivers, registration waivers, and also incentives at times. So, I think government has been doing its bit. There has to be more participation of players. I think that is also now happening. Definitely, there's a problem in entry segment as we discussed. And there is a GST reduction which has still kept this at a disadvantage of say 10% versus a petrol. We had planned for bringing this at petrol price parity, but for that, the 10% GST came down. So, whichever state government or a government is able to support the entry EVs, that will drive a very high adoption. So, this is one segment where we feel that government can still help the industry.
Well, if you talk about numbers, industry should do 2 lakhs and Tata itself should do almost 1 lakh this year or maybe above that. But you have quite a range of products in the EV market. Where do you see scope, opportunity, and also weaknesses, challenges that segments can grow?
