Tata Motors Pushes for Extended EV Incentives and Wider FAME Inclusion

Tata Motors, a leading Indian automaker, is urging the Indian government to extend current electric vehicle (EV) incentives for electric taxis and include personal cars in the government's flagship EV demand-boosting program, FAME.

FAME Extension and Policy Advocacy

In a letter to the government, Shailesh Chandra, Managing Director of Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, highlighted the importance of sustained support for EV adoption. He pointed to major economies like China and Germany, which have continued to offer subsidies until EV sales reach at least 20% of the market share.

Chandra emphasized the recommendations of the Parliamentary Standing Committee on Industry in 2023, which advocated for a broader scope and a minimum three-year extension for FAME II.

Call for Personal Vehicle Inclusion in FAME

Tata Motors proposes a three-year extension of the current INR 10,000/kWh battery size incentive for electric taxis. Additionally, they advocate for the inclusion of personal cars in future FAME schemes to accelerate widespread EV adoption.

Chandra argues that unutilized funds from the initial allocation for taxis in FAME II can be effectively used to extend the current policy and achieve desired goals in shared mobility.

EV Push for Clean Air and Economic Growth

Extending FAME subsidies and implementing supportive policies, according to Tata Motors, can significantly accelerate EV adoption in India. This, in turn, can contribute to cleaner urban air, reduced dependence on fossil fuels, and support the nation's net-zero emissions, energy independence, and economic growth objectives.

FAME II: A Temporary Extension and Industry Demands

The second phase of the Faster Adoption & Manufacturing of Electric Vehicles program (FAME II) is scheduled to conclude on March 31, 2024. The government recently granted a temporary four-month extension with an additional outlay of INR 500 crore.

Launched in 2019, FAME II initially had a total budget of INR 10,000 crore to promote EV adoption. While the industry requested an extension beyond March 2024, the government recently approved an additional INR 1,500 crore for the program.

Tata Motors: Leading the EV Charge in India

Tata Motors has emerged as a frontrunner in the Indian electric car market, capitalizing on the growing demand for EVs. Their stock price has seen a nearly six-fold increase in the past five years, solidifying their position as a domestic EV leader.

Dominating the local EV market with a share exceeding 70%, Tata Motors offers four electric vehicle options in the personal car segment: the Tiago hatchback, Tigor sedan, Punch and Nexon SUVs. They plan to expand their portfolio with upcoming models like the Harrier EV and Curvv EV. Currently, EVs account for 14-15% of Tata Motors' sales, with a target to increase this to 25% by 2027 and 50% by 2030.

With global giants like Tesla, Audi, and Mercedes-Benz entering the Indian EV market, competition is intensifying. However, Tata Motors' current market dominance and advocacy for continued government support position them well for continued leadership in the Indian electric vehicle landscape.

EV Market Growth in India

According to Vahan data, electric vehicle registrations across all vehicle categories in India reached 1,43,325 units in November 2023, reflecting a significant year-on-year jump of over 36%. This data underscores the rapid growth potential of the Indian EV market.

Tata Motors' current electric vehicle portfolio includes the Tiago hatchback, Tigor sedan, Punch, and Nexon SUVs, with plans to introduce the Harrier EV and Curvv EV. The company aims to increase the share of electric vehicles in its sales to 25% by 2027 and 50% by the end of the decade. India's EV registrations witnessed a year-on-year surge of over 36%, reaching 1,43,325 units in November 2023, according to Vahan data.