Tata Motors sees adoption of electric CVs falter amid incentives withdrawal

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Subscribe to enjoy similar stories. Government's withdrawal of demand incentives for small pick-ups has sharply slowed the adoption of Tata Motors’ Ace electric truck, a beneficiary of the erstwhile FAME-II subsidy scheme to promote electric vehicles (EV) in India. EV penetration for the Ace lineup had risen to nearly 10% in the final quarter of FY24, driven by a significant pre-buy as customers anticipated the end of the incentives.

It has nearly halved over the past year after the scheme was halted, a senior Tata Motors executive said. "If I take the entire Ace family, then I would say it has come down to around 4 to 5%. But if you look at the steady state of Q3 of the previous year, the volumes have not dropped by much," Girish Wagh, executive director, Tata Motors, told Mint.

He, however, emphasized that the spike in Q4FY24 spike was an anomaly due to pre-buying. Alos read | Why India’s auto PLI is yet to pick up after two years Wagh also pointed out the critical importance of reaching an inflection point for sustained growth. "It is evident that unless we reach a particular threshold, a kind of an inflection point after which [the segment will be viable on its own, the continuation of incentives is certainly needed to help." India's Ministry of Heavy Industries had announced phase 2 of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India, or FAME-2, scheme for five years until March 2024, with a total budgetary support of ₹10,000 crore.

FAME 2 was the Centre's EV subsidy scheme, where consumers could buy EVs at subsidized prices and manufacturers could seek the subsidy amount from the government. It was discontinued last year, replaced by PM E-Drive. Also read | Tata Motors demerger: PB