The country’s largest electric vehicle manufacturer Tata Motors has started working with used car markets to facilitate the sale and trade-in of electric vehicle (EV) owners.
A company spokesperson said Business Standard“We have been working on opportunities to facilitate EV resale / trade-in for those owners who want to upgrade to a new EV. Our plans are currently in the early stages, and we are experimenting a bit with online used car markets.”
The company has the largest fleet of EVs in India, estimated at 170,000 units. As a pilot, the company has already started working with the online car marketplace Spinny.
Although both Tata Motors and Spinny declined to comment on the issue, used Tata Nexons are being sold on the platform.
The 2021 Nexon EV XZ Plus is available in Mumbai for Rs 11.61 lakh on the platform.
The new Tata Nexon EV is available for Rs 12.49-16.49 lakh.
Dealer sources said that EV prices generally fall in line with their internal combustion engine (ICE) counterparts. This is around 25 percent in the first year, and after that, it depends on the usage (kilometers traveled and battery life).
A Tata Motors spokesperson said the used EV market is likely to match the new EV market with a lag of 3-4 years.
“The used EV market is likely to be similar to the new EV market with a 3-4 year lag, as starters upgrade to longer EVs and more advanced EVs. Large volumes of EVs from 2021-22. So, we will see a lot of early developers in 12-24 months,” the spokesperson said.
Two Mumbai-based Tata Motors dealers have confirmed that they have started seeing customers who wish to exchange their Tiago or Nexon EV for the new Tata EV.
“We try to do everything possible when there are requests for exchange. It would be good if the company interacts with the second-hand market to buy EV as pricing is still a challenge in this segment,” said a dealer based in east Mumbai.
A used car market official said the benefit of buying from the market is that there will be a warranty on the used EV.
“A few serious or cost-conscious people are now open to buying used EVs, as warranties on batteries are 8-10 years. These batteries can last longer depending on the charging cycle. Up to 2,000-3,000 charging cycles are possible. Even if one charges once a week, that works out to 52 charges per year. Even a 3-4 year old EV would probably be charged almost 200 times,” said another official.
“The cells can be replaced, if needed, and the EV is ready to go. One major challenge to EV adoption is the cost of adoption. Used EVs could be the answer,” the person felt.
A Tata Motors spokesperson told Business Standard that used EVs will continue to be a strong proposition for those who would like to try a low-cost EV. This will help people understand the benefits of their use case better before purchasing a new EV.
“Budget customers with high usage conditions will also choose them for their low running costs and guaranteed powertrain warranty period,” he added.
Tata Motors has been working to bring more price parity between its EVs and ICE vehicles. Earlier in September, Vivek Srivatsa, chief commercial officer, Tata Passenger Electric Mobility, said, “Our single aim at Tata.ev is to integrate EVs by breaking down barriers and making EVs accessible to the average car buyer. With these special, limited-time prices, we’re breaking the high acquisition cost barrier for EVs. We bring their prices closer to similar gasoline and/or diesel vehicles.”
Srivatsa was talking about festive discounts on Tata vehicles, including EVs.
As such, FY25 was tough for the company’s EV sales. In Q1 FY25, while overall Tata Motors PV sales fell by 1.1 per cent, EV volumes (at 16,600 units) fell sharply by 13.9 per cent due to a sharp decline in the fleet segment.
Shailesh Chandra, managing director (MD), Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said the EV sector was affected by the broader industry trend and the impact of a major slowdown in fleet sales in Q4 FY24. This is due to the expiry of FAME II funding in March 2024.
“As a result, while sales of the personal segment grew slightly, there was a significant decline seen in the fleet segment, which is expected to recover in the coming quarters,” he said.
The company has also started joint ventures with Tata Power for EVs and solar roofs that ensure no purchase cost to the consumer.
A company spokesperson said Business Standard“As more people start installing solar rooftop panels, owning an EV will become even more profitable.”
As such, other players like Maruti Suzuki, who are planning to introduce EVs, have said that they plan to provide the customer with a ‘complete’ EV ecosystem.
Partho Banerjee, chief marketing and sales officer at Maruti Suzuki India said last week, “We have done some basic research. We will not just launch the product. We will provide a complete ecosystem for customers who will be part of this EV family. Three major concerns are range concerns, EV charging infrastructure and the residual value of an EV after five years of use. Nobody knows today what the residual value of an EV will be.”
Top car manufacturers like Mercedes Benz offer guaranteed residual value to their EV customers. For example, the newly launched EQS SUV will fetch a residual value of 60 percent after three years, and 45,000 km.
First published: Sep 18 2024 | 12:35 AM IST