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India to purchase 10,000 EVs from Tata Motors

Traffic in Hyderabad, India.

Tata Motors has reached an agreement with the Indian government, which has ordered 10,000 electric vehicles for the use of the government and its agencies.

A statement made by the Ministry of Power outlines the deal, under which 500 EVs will be supplied by November this year to government-backed Energy Efficient Services Ltd, with the remaining vehicles to be delivered in a second phase. These 10,000 vehicles are expected to replace the current petrol and diesel cars used by the government and its agencies, over a 4-year period.

The order has been described as the world’s single-largest EV procurement initiative.

The local automaker, Tata Motors, securing this contract is unsurprising, given the issues Tesla – which is currently unable to sell its vehicles in India – face, including import tariffs and local content restrictions. However, Tesla CEO Elon Musk has confirmed the company is currently in discussions with the government to seek a temporary relief from these barriers.

However, rival Indian EV maker Mahindra & Mahindra (M&M), has expressed its disbelief at the low bid price for the contract claiming it is hard to comprehend. M&M will now be supplying 150 of the first 500 EVs, after it agreed to match Tata Motors’ price to win part of the bid.

Tata Motors, which has since commented on its intention to partner with local start-ups and enterprises in order to ensure the affordability of its EVs, also has comparatively little experience in the EV industry – with only one model, the Tiago, available so far.

Tata's Tiago EV. Source: Tata Motors
Tata’s Tiago EV. Source: Tata Motors

Plans for the country to sell only EVs by the year 2030 are already being considered by the government. However, many consider this to be too ambitious, with a timescale that beats the likes of both the UK and France, which have set a similar target for 2040.

However, the nation still has a long way to go towards popularising EVs if it is to meet this target. India is currently underprepared for such an ambitious change in policy, given the lack of charging infrastructure and an absence of interest in EVs from consumers, due perhaps to affordability – with only around 5,000 EVs currently on the roads.

According to Bloomberg New Energy Finance (BNEF), the country currently has 350 charging locations, many of which currently serve highly populated areas where EVs are more common. While models currently available on the market have the option of being charged at home, the task is often laborious; one of the only currently available models, the E2o Plus, allows for a 140km range on a full charge, but takes 8-9 hours to do so with the standard charging option.

The government also faces a challenge in popularising EVs in rural areas – a topic discussed by BNEF’s head of India research in New Delhi, Shantanu Jaiswal:

“In areas where the traffic volumes are high, it makes good business sense for distribution utilities. In rural areas though, where concentration of electric cars may not be very high, getting investments may still be a challenge, as we have seen in household electrification.”

Few could deny that the government is demonstrating admirable ambition in its plans for the future of EVs and combatting pollution. However, without accessibility to charging facilities for customers and a lack of options from manufacturers to support these, the 2030 timeline still appears to be over-optimistic.

 

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