Tata Motors hits a milestone with Nexon EV pricing

Tata Motors' Nexon.ev is now available at a starting price of ₹12.49 lakh, bringing it on par with the ICE models for a limited time. This marks a significant step in narrowing the price gap between electric vehicles (EVs) and traditional internal combustion engine (ICE) models, which is key to driving EV adoption in India.


This is part of a strategic move by the ₹3.9 lakh crore carmaker, which has made remarkable strides in the EV space, outpacing competitors such as Maruti Suzuki, Mahindra Group, and JSW MG Motor. As of August 2024, Tata Motors held around 64% of the Indian EV market, though its share of the overall passenger car market remains at 12.5%, after market leader Maruti Suzuki and Hyundai India.

In its ‘Festival of Cars’ campaign, Tata Motors has also introduced festive offers on the Punch.ev and Tiago.ev, further narrowing the price gap between these models and their ICE counterparts. The Punch.ev is now available at a starting price of ₹9.99 lakh, just ₹54,000 more than the top-end petrol variant. The Nexon ICE version is being offered starting at ₹8 lakh and going up to ₹14.49 lakh during this period.

The decision is strongly supported by N Chandrasekaran, Chairman of Tata Sons, the holding company of the ₹34 lakh crore Tata Group.

"Tata Passenger Electric Mobility, a subsidiary of Tata Motors, is already breaking even on its product line. You will be surprised by the pricing of the upcoming cars. We will match the price points of our competitors and maintain competitive pricing," he said in an interview just days before the launch of the Punch ICE version facelift.

Also Read: Tata offers up to ₹3 lakh discount on Nexon.ev, other EVs in 'Festival of Cars' sale

Chandrasekaran's confidence in EVs contrasts sharply with Maruti Suzuki, which controls nearly half of India's car market but is yet to launch its first EV. Since Tata Motors launched its first EV, the Tigor.ev, in 2019, the company has introduced several models, further solidifying its lead.

Maruti's Chairman, RC Bhargava, remains firm that India will experience a hybrid car phase before fully transitioning to EVs, a point he reiterated as recently as July 2024.

Tata's Chairman, however, holds a different view. "Whether the electric vehicle will be the platform of the future is no longer in question. Tesla has already proven that you can produce fantastic cars that consumers love, sell them profitably, and meet market demand. The key is producing high-quality cars at the right price point, profitably," Chandrasekaran added.

Also Read: Tata Punch tops India sales for FY25, hits 4 lakh milestone fastest; several new features added

He believes that EV sales will gain momentum once they reach 20% of the total market volume. Currently, as of August 2024, EVs account for 6.6% of all cars sold in India.

Who will be proven right—Maruti or Tata?

At this stage, the sharp global slowdown in EV sales, along with the rising popularity of hybrid and CNG cars, may tilt the argument in Maruti's favour. However, if pricing ceases to be a differentiator, this hybrid phase may not last long.

Ankit Sharma, Co-Founder & Director of Vidyuta Materials, a Greater Noida (UP)-based firm which makes cathode active materials (CAM) for lithium-ion cells, said, “Promotional campaigns and special offers play a key role in influencing consumer behaviour, especially in the emerging EV market... Psychological factors like the ‘fear of missing out’ (FOMO) play a big role in how consumers respond to time-limited promotions, driving sales spikes. For example, strategic promotions on electric two-wheelers in August 2024 led to a 41% year-on-year (YoY) sales increase, with 88,471 units sold.”

Interestingly, according to Natarajan Chandrasekaran, Tata Motors will still make money despite its aggressive pricing of new electric cars. He stated, "Tata Motors’ electric vehicle subsidiary is already EBITDA break-even. And as new models come out, we’re getting even better. The cost parity with internal combustion engine vehicles is getting closer."

According to Sharma, “Achieving price parity between electric vehicles (EVs) and traditional internal combustion engine vehicles is key to accelerating EV adoption across a wider segment of consumers. The higher upfront cost of EVs, largely driven by the cost of lithium-ion batteries—which account for approximately 30-40% of an EV’s total cost—remains a significant barrier for many.”

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