Tata Motors has sought incentives for its Tiago electric car under a government scheme promoting domestic production of automobiles, said a senior company official.
P B Balaji, group chief financial officer of Mumbai-headquartered Tata Motors, said on Tuesday that the company has made an application for all variants of the Tiago. “The Automotive Research Association of India certification is done. We are now in the process of filing paperwork and we expect to get an approval from the government in the next one or two months,” Balaji told reporters.
Automobile original equipment manufacturers (OEMs) have to take an eligibility certificate from the association, a testing agency under the Ministry of Heavy Industries, to claim incentives under the ’s production-linked incentive (PLI) scheme.
Mahindra and Mahindra had recently received an eligibility certificate from the association for its electric three-wheeler.
The Rs 25,938-crore PLI scheme started September 2021. OEMs were to be given incentives from April 2022 on the sales value of advanced automotive technology (AAT) products (vehicles and components) made in India if they met the minimum 50 per cent domestic value addition (DVA) criterion. The government, however, came up with a set of standard operating procedures (SoPs) in April 2023.
As eligible companies seek incentives under the automobile PLI, input costs for electric vehicles (EV) are going up.
Balaji said that the prices of lithium cells used in EV have increased since June last year but there has been some stabilisation since March. “We are expecting reduction to happen as the year progresses as more supplies come up and there is some softening of demand, in China for example,” he Balaji.
Tata Motors has taken several rounds of price hikes for its passenger vehicles range: in April and July 2022 and in February, May and July 2023. The total quantum of cumulative price hikes is around 3.4 per cent.
Balaji said that multiple factors shape a decision on pricing: the brand, innovation and cost-saving programmes. “The brand has strengthened and so our ability to get better pricing in the market is better now than in the past.”
“We are balancing between growth, appropriate profitability and the level of competitiveness that we need to be in this business,” he said, adding that no immediate price hikes are planned.