Tata Motors MD Shailesh Chandra Explains Why Tata Will Not Make A Low-Range EV

The leading EV brand in India identified the minimum range that customers expect and are willing to pay the premium for

The price premium for an electric vehicle over an equivalent internal combustion engine (ICE) vehicle is one of the major hurdles in the adoption of EVs right now. Tata seems to have found a sweet spot in the Indian market with the Nexon EV which has a certified range of 312km, and whose prices start just below Rs 15. Technically, Tata could make an EV even more affordable by compromising on its range, but the carmaker will not do that and for a good reason.

As explained by Shailesh Chandra, MD, Tata Motors Passenger Vehicles Ltd., and Tata Passenger Electric Mobility Ltd, a real-world range of 200km is the bare minimum for a customer to consider buying an EV. “If you go below that, you can meet the price expectation. But today, if a customer is ready to give you a 20-25 percent premium, use that to work on the range anxiety. Otherwise, people will always blame you for lower range and that damages the category. So we will not move below a certain level of range because then it will be a question mark. There will be many people who will say that I went there and I got stuck. We don't want those stories in the market, we want positive stories.”

EV components such as batteries, motors and control systems are still quite expensive, raising the price of the final product. “Ultimately when you make an electric vehicle in a hatch or a high SUV, if you’re giving a certain range, the cost is the same,” added Chandra.

That’s where Tata found a sweet spot with the Nexon EV which has a consistent real world range of 220-240km from a 30.2kWh battery. The price difference for the electric sub-compact SUV against its corresponding petrol-automatic variant now stands at just over Rs 5 lakh and just under Rs 4 lakh over its diesel-auto variants. Still, the lower running costs make the Nexon EV a financially attractive alternative. As the prices for EV components come down, and they are expected to drop considerably over the next few years, we can expect smaller and more affordable EVs without lowering the minimum real-world range.

Also read: The Tata Nexon EV’s Waiting Periods Will Not Reduce Anytime Soon. Here’s Why

Previous instances of EVs that failed to incite buyers due to low range and high premiums would be the Mahindra e2o and eVerito. Both offered less than 150km of range, with lacklustre cabins and steep price jumps over the ICE alternatives. This in addition to the overall lack of charging infrastructure which is a major obstacle to EV adoption back then.

Even the first iteration of the Tata Tigor EV with just 142km of certified range was introduced solely for fleets and rental companies and cost more than Rs 11 lakh (ex-showroom). It was never offered as a personal vehicle as it would have been doomed to fail. Meanwhile, the new and updated Tigor EV now has a certified range of 306km and is priced from Rs 11.99 lakh. It is still priced higher than the company would have liked, admits Shailesh, but with over 200km of realistic range there is a strong demand for it.

With its upcoming EVs based on the Gen2 architecture, Tata will be able to offer models with a certified range of up to 500km which should equate to a real-world range of around 350km. Packed in premium shapes with feature-rich cabins, these EVs are also expected to enjoy strong demand in the near future. Currently, the two models offering such a package are the MG ZS EV and Hyundai Kona Electric and are priced north of Rs 20 lakh. Tata could offer EVs of similar ilk with a starting price of Rs 18 lakh.

Related: Tata Previews Future SUV Coupe Model With New Curvv EV Concept

What is your minimum range requirement to consider buying an EV as your next car? How much more are you willing to pay for such an EV? Let us know in the comments below.