Tata Motors suggests government support for electric cars under ₹10 lakh is vital for widespread adoption. This segment faces high battery costs, making EVs pricier than petrol cars.Scaling electric cars into mass-market adoption will remain a difficult task unless the government extends targeted support to e-cars priced below ₹10 lakh, said Shailesh Chandra, MD & CEO of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, noting that the segment currently faces structural cost challenges.
More than half of India’s car buyers are below the ₹10 lakh mark, a segment where the Tata Group automotive flagship sells the Tiago and Tigor electric cars. “If EVs have to go mainstream, this is the segment that must click,” Chandra said on Tuesday, pointing out that in small cars, battery costs can account for nearly 70 per cent of the vehicle price while customers still expect a real-world range of more than 400 kms.
Sharp reduction in prices of petrol and diesel cars under GST 2.0 has increased the price gap between the EVs and fossil fuel- powered cars, further pushing the price parity out of reach for entry-level EVs, he said.
India’s electric car market leader wants the Centre to reintroduce incentives on such eco-friendly vehicles used in the fleet segment. He said while fleet vehicles make up only 7–8 per cent of passenger vehicle sales, they contribute nearly 35 per cent of passenger kilometres driven.
“From an environmental return-on-investment perspective, this is where government support delivers the biggest impact,” said Chandra. Prior to the PM e-Drive scheme which took effect from October 2024, e-cars in the fleet segment were getting subsidies of ₹10,000 per kWh, capped at ₹1.5 lakhs.
The top executive’s comments come amid a mixed but ultimately strong 2025 for Tata Motors.
The year, according to Chandra, had “two unequal halves”, with the first eight months under pressure till the GST cuts, which took effect on September 22, and demand improving sharply from November onwards.
The passenger vehicle industry ended the year with about 5-6 per cent increase in wholesales or factory dispatches, while registrations or retail sales grew at a faster 9–10 per cent. Tata Motors outpaced the industry growth, exiting the December quarter as the second-largest in the market.
Earlier in the day, the company introduced a facelift of its Punch micro-SUV, priced at ₹5.59 lakh to ₹9.29 lakh.
