Tata Mo­tors wins govt’s Rs1,120 crore EV or­der

Tata Mo­tors will sup­ply 10,000 elec­tric cars in two phases, in the largest such pro­cure­ment any­where in the world


Tata Mo­tors Ltd has won a mar­quee gov­ern­ment con­tract for sup­ply­ing 10,000 elec­tric cars, out­bid­ding Mahin­dra & Mahin­dra (M&M) in the con­test for the Rs1,120 crore or­der, the largest such pro­cure­ment any­where in the world.

The ve­hi­cles will be pro­cured by state-owned En­ergy Ef­fi­ciency Ser­vices Ltd (EESL) at a pe­runit price of Rs11.2 lakh and will lay the foun­da­tion for the Na­tional Demo­cratic Al­liance gov­ern­ment’s am­bi­tious plan for a mass shift to elec­tric ve­hi­cles (EVS) by 2030.

“Tata Mo­tors Lim­ited quoted the low­est price of Rs10.16 lakh ex­clu­sive of GST (goods and ser­vices tax) in the com­pet­i­tive bid­ding. The ve­hi­cle will be pro­vided to EESL for Rs11.2 lakh which will be in­clu­sive of GST and com­pre­hen­sive 5-year war­ranty which is 25% be­low the cur­rent re­tail price of a sim­i­lar e-car with 3-year war­ranty,” the gov­ern­ment said in a state­ment.

These e-cars will be pro­cured in two phases; 500 will be sup­plied in Novem­ber 2017 and the re­main­ing 9,500 cars in the sec­ond phase, for which dates haven’t been de­clared yet.

“Three com­pa­nies had sent their bids yes­ter­day. Nis­san (Mo­tor Co. Ltd) could not qual­ify for the bid as they could not in­di­cate what prod­uct they are go­ing to of­fer,” said Sau­rabh Ku­mar, man­ag­ing direc­tor of EESL.

“Tata Mo­tors has been col­lab­o­ra­tively work­ing to de­velop elec­tric pow­er­train tech­nol­ogy for its se­lected prod­ucts. EESL ten­der pro­vided us the op­por­tu­nity to par­tic­i­pate in boost­ing e-mo­bil­ity in the coun­try, (and) at the same time ac­cel­er­ate our ef­forts to of­fer a full range of elec­tric ve­hi­cles to the In­dian con­sumers,” Guenter Butschek, man­ag­ing direc­tor and chief ex­ec­u­tive of­fi­cer of Tata Mo­tors, said in a state­ment.

Mint re­ported about the EV leas­ing plan by the gov­ern­ment, its agen­cies and state-owned firms on 15 April.

Tata Mo­tors will be sup­ply­ing the elec­tric vari­ant of the Tigor com­pact sedan as part of the con­tract, said a Tata Mo­tors ex­ec­u­tive, re­quest­ing anonymity. “Each phase has three vari­ants—base, mid and high. Tata Mo­tors was the low­est bid­der for all the three,” the ex­ec­u­tive added.

An M&M spokesper­son de­clined to com­ment.

On 26 Septem­ber, Mint re­ported EESL had re­vised its ten­der for 10,000 EVS, do­ing away with a re­quire­ment that these need to be sedans. The con­tract is the start­ing point of EESL’S EV pro­cure­ment pro­gramme, given that these ve­hi­cles will be used to re­place the petrol and diesel cars used by the gov­ern­ment and its agen­cies, which have around half-a-mil­lion cars, of which about a third are leased.

The gov­ern­ment has given the EV sourc­ing man­date to EESL, with the next set of ten­ders ex­pected to source e-rick­shaws and e-au­tos un­der the faster adop­tion and man­u­fac­tur­ing of elec­tric ve­hi­cles in In­dia (FAME) scheme.

EESL’S busi­ness model is to make these ve­hi­cles avail­able for a monthly pay­ment of around Rs45,000, Rs5,000 less than what is cur­rently paid by the gov­ern­ment and its agen­cies for leas­ing cars run­ning on petrol and diesel.

“What we are of­fer­ing is very sim­ple: what­ever you are pay­ing for a petrol or diesel car, phase it out over a five- to six-year pe­riod, and we will give you an elec­tric car with a driver. Po­ten­tially, on this very sim­ple model, you can con­vert 200,000-300,000 cars into elec­tric and it takes you closer to the mis­sion,” said EESL’S Ku­mar.

Send­ing a clear sig­nal that In­dia is firmly mov­ing to­wards elec­tric ve­hi­cles, the GST Coun­cil set a 12% tax rate for elec­tric ve­hi­cles in May, com­pared with 28% plus cess for petrol and diesel cars and hy­brid ve­hi­cles. In­dian auto firms were warned by the gov­ern­ment ear­lier this month to switch to pro­duc­tion of ve­hi­cles that run on non-pol­lut­ing al­ter­na­tive fu­els or risk be­ing over­taken by in­evitable pol­icy change.

Ex­perts said the EESL ten­der demon­strated the gov­ern­ment’s strong in­tent to push EV mo­bil­ity. “While the or­der is a big pos­i­tive for Tata Mo­tors and sends out a strong sig­nal with re­gard to gov­ern­ment’s in­tent on elec­tric ve­hi­cles, the pol­i­cy­mak­ers have to think through the im­pact of such a rapid shift,” said Har­ish H.V., part­ner at con­sult­ing firm Grant Thorn­ton. “It is go­ing to cre­ate a big dis­rup­tion in the ecosys­tem of ve­hi­cles that run on in­ter­nal com­bus­tion en­gines and im­pact sev­eral jobs.”


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