Tata takes a frugal road less travelled for EV market
To make its first electric vehicle for the consumer market, Tata Motors repurposed an unused shop floor at its flagship plant.
Here, there’s no fancy assembly line — Nexon SUV bodies designed for gasoline models are wired and fitted with battery packs by hand.
The area, which could be mistaken for a prototype lab, initially made just eight SUVS a day. But demand has shot up over the two years since the Nexon EV’S launch. Tata now makes more than 100 a day though much of that is now handled at another plant nearby.
Even with this humble start, which draws on the country’s tradition of jugaad — a word referring to frugal DIY innovation and workarounds, Tata dominates the country’s fledgling electric car market.
That contrasts sharply with other major automakers which have poured billions of dollars into EV tooling and technology from the get-go, though Tata’s success also owes much to government subsidies and high tariffs that keep out imports from rivals like Tesla.
An EV plant for a nascent market would have been “a huge amount of investment sitting on the potential of emerging volumes. We didn’t want to do that,” Anand Kulkarni, vice-president of product line and operations at Tata Passenger Electric Mobility, told Reuters.
Tata also limited upfront investment by relying on Tata group companies for a range of EV components and infrastructure.
That enabled it to price the Nexon EV around ~14,50,000 — not necessarily cheap but affordable for the upper-middle class and not much more expensive than the top version of the Nexon gasoline model.
With just the Nexon EV and one other model for fleet sales, Tata commands 90 per cent of electric car sales in India.
Last June, Tata outlined aggressive plans to launch 10 electric models by March 2026.
Those ambitions attracted $1 billion in investment from US private equity firm TPG, valuing its EV business at $9 billion — far below some EV start-ups but equivalent to 40 per cent of Tata Motors’ market value.
“This has definitely given us a significant head-start. It now gives us a force multiplier to aggressively move on EVS,” said Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and the EV subsidiary.
Tata has also earmarked ~15,000 crore of its own money to fund its EV plans and by 2025 Chandra expects electric models to make up a quarter of its sales.
Leaning on Tata family
The Nexon EV has a relatively modest real-world driving range of around 200 km per charge.
The range is, however, sufficient for most potential buyers, a Tata survey of consumers showed, prompting it to choose a 30 kilowatt hour iron-based battery from China’s Gotion High Tech Co which is cheaper than other lithium-ion batteries. Tata has also judged it safer for India's tropical weather conditions, Kulkarni said.
Gotion is working with Tata Autocomp Systems on assembling the battery packs and on the battery management system.
Tata Power Company is setting up charging stations, Jaguar Land Rover contributes to design while Tata Chemicals has plans for battery recycling and local cell manufacturing. When Tata began EV production in 2020, most parts were imported. Today, Tata Autocomp produces around 50 per cent of the components in-house, its CEO, Arvind Goel, told Reuters.
“Our plan is to localise everything,” he said. All of the motor's parts except the magnet are due to be produced locally over the next couple of years.
Risks ahead
Tata’s EV business is, however, set to face challenges. The government wants 30 per cent of all cars sold in the country to be EV by 2030 and while that goal may look optimistic, competition is on its way.