Shailesh Chandra, Managing Director of Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, highlighted the EV subsidies in countries like China and Germany, urging the Indian government to create a supportive environment similar to Beijing’s, which has committed to backing EV adoption until they constitute at least 20% of all new car sales.
Tata Motors, with a market capitalization of INR 3.76 lakh crore and a leader in the Indian automotive market thanks to the growing demand for electric cars, has called on the Indian government to extend electric taxi incentives for an additional three years and to include personal cars in the FAME program, drawing inspiration from China’s support for EV adoption.
The company, which has seen its stock price surge nearly six-fold in the past five years, is advocating for an environment similar to Beijing’s, which supports EV adoption until they make up at least 20% of new car sales. Shailesh Chandra, managing director of Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, pointed out that major economies like China and Germany have sustained EV adoption with demand subsidies until reaching at least 20% EV adoption. He also noted that the Parliamentary Standing Committee on Industry recommended in 2023 that the government extend the FAME program by at least three more years to make it more inclusive.
FAME 2, the second phase of the Faster Adoption & Manufacturing of Electric Vehicles program, is set to end on March 31. Last year, electric cars accounted for 2.5% of new vehicle sales in India, with about 83,000 units sold, compared to China’s 6.68 million pure battery-powered vehicles, which made up nearly a third of all vehicle sales in the first two months of the year. China represents six out of every ten EVs sold globally.
Tata Motors has proposed that the government continue to support electric taxis with an incentive of INR 10,000/kWh battery size for the next three years and also include personal vehicles in future incentive schemes. Currently, the government offers subsidies of INR 10,000/kWh only to passenger vehicles used by taxi operators for up to 30,000 vehicles under FAME 2. However, the number of electric cabs has reached a cumulative 16,000 EVs, still below the government’s target of 30,000 battery-powered taxis. Chandra mentioned that there are substantial funds left over from the initial allocation in FAME II for taxis, suggesting that these funds be used to support shared four-wheeler mobility goals.
Chandra emphasized that electric vehicles, with zero tailpipe emissions, are particularly effective in shared mobility applications due to their high daily running and emissions in urban areas. However, the higher upfront costs of EVs make demand incentives essential for fleet owners to transition from traditional vehicles to EVs. He highlighted the significant impact of shared mobility on both travellers and the public in highly polluted cities like Delhi and Mumbai.
Chandra stressed that in a country with 14 of the 20 most polluted cities globally, battery electric vehicles are the only mature zero-emissions technology that can significantly contribute to reducing air pollution. He also linked EV adoption to broader climate goals, stating that continued FAME subsidies and supportive policies can accelerate EV adoption, reduce urban air pollution, and help India achieve its net-zero, energy independence, and economic growth objectives.
Tata Motors currently dominates the local electric vehicle market with a share of more than 70%. The company sells four EVs in the personal car segment: the hatchback Tiago, sedan Tigor, and SUVs Punch and Nexon. Tata Motors plans to expand its portfolio with the Harrier EV and Curvv EV in the coming months. Electric vehicles already account for 14-15% of Tata Motors’ sales, which is expected to increase to 25% by 2027 and 50% by the end of the decade.
