Tata Motors targets to sell 1 lakh EVs in FY24

It is no secret that the Tata Nexon virtually dominates the sales of electrical vehicles (EVs) in India. Albeit on a small base, but the growth in EV sales by Tata Motors has been phenomenal. In the recently concluded FY22, Tata Motors saw the sales EVs grow by 335% yoy at 19,105 EV units. Further, for the fiscal year FY23, Tata Motors expects this figure to more than double to 50,000 units. Now for FY24, hold your breath, Tata Motors aims to sell 100,000 electrical vehicles (EVs) an exponential growth of 2-fold on a much higher base.

The figures of 50,000 EV units in FY23 and 1 lakh EV units in FY24 were also confirmed by Tata Motors Chairman N Chandrasekaran. He mentioned this in a shareholders meeting underlining the importance that the group attached to the focus on EVs in the overall auto portfolio. In fact, Chandra is quite confident that the electrical vehicle sales would eventually contribute to 25% of the total sales of four wheelers over the next five years i.e. by the fiscal year FY28. That would mean a big thrust for EVs by the Tata group.

Tata Sons chief, N Chandrasekaran, also expects the performance of Tata Motors to substantially improve in the current fiscal year FY23. That is largely likely to happen on the back of the overall supply situation improving, including that of semiconductors. Auto stocks are already benefiting from a pick-up in rural demand in the light of a robust Kharif season as well as a sharp fall in the cost of major inputs like steel, aluminium and copper that go into the manufacture of automobiles in a substantial way. 

EVs do have some challenges like practical safety related issues, availability of necessary infrastructure in the ecosystem etc. These challenges are likely to be addressed only gradually in the coming months. However, it must be underlined that electrification has been essentially the cornerstone of Prime Minister Narendra Modi's climate change and carbon reduction agenda. Nothing represents this mental shift in Indian industry more than the rise of EVs. It not only helps cut oil import bill but also reduces pollution in major cities.

India is currently targeting electric models to make up 30% of total passenger car sales in the country by 2030. Today it is just about 1%, so the scope for growth is huge and companies like Tata Motors are perfectly poised to capitalize on the gap. The shift is going to be much more intense in two-wheelers with e-scooters and e-bikes eventually accounting for 80% of total two-wheeler sales, up from about 2%. The aggression shown by Tata Motors on the EV front is not too hard to fathom.