Tata Motors taps used car market to boost electric vehicle resale, exchange | Company News
The country’s largest electric car maker Tata Motors has started working with used car marketplaces to facilitate resale and exchange for electric vehicle (EV) owners.
A company spokesperson told Business Standard, “We have been working on opportunities for facilitating EV resale / exchange for those owners who are looking to upgrade to a new EV. Our plans are currently at an early stage, and we are piloting at a small scale with used car online marketplaces.”
The company has the largest car park in EVs in India, estimated to be around 170,000 units. As a pilot, the company has already started work with used online car marketplace Spinny.
While both Tata Motors and Spinny declined to comment on the matter, used Tata Nexons are on sale on the platform.
A 2021 Nexon EV XZ Plus is available in Mumbai for Rs 11.61 lakh on the platform.
A new Tata Nexon EV is available for Rs 12.49-16.49 lakh.
Dealer sources said that typically EV prices reduce in line with their internal combustion engine (ICE) counterparts. This is around 25 per cent in the first year, and thereafter, it depends on usage (kms travelled and battery life).
A Tata Motors spokesperson said the used EV market is likely to closely mirror the new EV market with a lag of 3-4 years.
“The used EV market is likely to closely mirror the new EV market with a lag of 3-4 years, as early adopters upgrade to longer-range and more advanced EVs. Major volumes of EVs are from 2021-22. And so, we will see the initial lot of upgraders in 12-24 months,” the spokesperson said.
Two Mumbai-based dealers of Tata Motors confirmed that they have already started seeing customers who wish to exchange a Tiago or a Nexon EV for a new Tata EV.
“We are trying to do our best when exchange demands come up. It would be great if the company ties up with used EV buying marketplaces as rate standardisation remains a challenge in this category,” said a dealer based in the eastern suburbs of Mumbai.
A used car marketplace executive said the benefit of buying from a marketplace is that there would be a warranty on this used EV.
“Several people who are value or cost conscious are now opening up to buying used EVs, as warranties on the batteries are for 8-10 years. These batteries can last for far more than that depending on charging cycles. Up to 2,000-3,000 charging cycles are possible. Even if one charges once a week, it works out to 52 charges a year. Or a 3-4 year old EV would have probably been charged hardly 200 times,” said another executive.
“The cells can be replaced, if needed, and the EV is good to go. One major challenge for EV adoption is the cost of acquisition. Used EVs can be the answer,” the person felt.
Tata Motors spokesperson told Business Standard that used EVs will continue to have a strong value proposition for those who would prefer to try a lower-cost EV. This will help people understand their use case benefits better before buying a new EV.
“Budget-constrained customers with high running use cases will also opt for them for their inherent low-running cost and assurance of the residual powertrain warranty period,” he added.
Tata Motors has been working to bring in more pricing parity between its EVs and ICE vehicles. Earlier in September, Vivek Srivatsa, chief commercial officer, Tata Passenger Electric Mobility, said, “Our singular purpose at Tata.ev is to mainstream EVs by breaking barriers and making EVs more accessible to regular car buyers. With these special, limited-period prices, we are breaking the high acquisition cost barrier for EVs. We are bringing their prices closer to similar petrol and/or diesel-powered vehicles.”
Srivatsa was talking about festival discounts on Tata cars, including EVs.
As such, FY25 has been tough for EV sales for the company. In Q1 FY25, while overall Tata Motors PV wholesales were down 1.1 per cent, EV volumes (at 16,600 units) fell steeply by 13.9 per cent due to sharp decline in the fleet segment.
Shailesh Chandra, managing director (MD), Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, had said that the EV sector was affected by the broader industry trend and the impact of significant preponement of fleet sales in Q4 FY24. This is due to the expiry of the FAME II subsidy in March 2024.
“Consequently, while the personal segment retails have grown slightly, there was a sharp decline witnessed in the fleet segment, which is expected to recover in the coming quarters,” he had said.
The company has also started bundled plans with Tata Power for EVs and solar rooftops that ensure zero running costs for the buyer.
A company spokesperson told Business Standard, “As more people start installing solar rooftop panels, owning an EV will become even more beneficial.”
As such, other players like Maruti Suzuki, which are planning to bring in EVs, have said they plan to offer a ‘holistic’ EV ecosystem to the customer.
Partho Banerjee, senior executive officer of marketing & sales at Maruti Suzuki India said last week, “We have done some basic research. We are not just going to launch the product. We are going to provide a complete ecosystem to customers who are going to be a part of this EV family. The three big concerns are range anxiety, EV charging infrastructure and residual value of the EV after five years of usage. No one knows today what is going to be the residual value of an EV.”
Premium carmakers like Mercedes Benz offer a guaranteed residual value to their EV customers. For example, the newly launched EQS SUV will fetch a 60 per cent residual value after three years, and 45,000 km.
First Published: Sep 18 2024 | 12:35 AM IST
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