The country’s third largest carmaker, in its interaction with analysts on Tuesday, also acknowledged that competition has increased in the EV segment, especially from JSW Group’s MG Windsor in India.
“Given the uncertainty around the pace of EV adoption in key markets, the company may need to extend the life of its ICE (internal combustion engine) platforms beyond the originally planned timeline,” Motilal Oswal’s analysts Aniket Mhatre and Amber Shukla wrote in an 11 March note. “It may also consider launching new ICE variants in the future.”
Tata Motors didn’t respond to Mint’s emailed queries till press time.
However, the management at the maker of Nexon EV told analysts that new EV launches will boost demand, benefiting the company.
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Tata Motors-owned British luxury brand Jaguar Land Rover announced plans in 2021 to offer pure electric car models for all its brands by 2030. The maker of Range Rover, Defender and Discovery, however, halted its plans to build EVs at Tata Motors’ Tamil Nadu plant, Reuters reported. One reason cited was the slowing global demand for EVs.
The company’s international business contributed 60% of its revenue in the financial year 2024.
In the domestic market, Tata Motors’s EV sales fell 12% over a year earlier in the April to February period. In fact, its sales shrunk in nine out of 11 months in the ongoing 2024-25 financial year. In the previous fiscal, its EV sales had surged 48%.
The maker of Nexon EV saw its market share shrink from 73% in 2023 to 62% in 2024. In December last year, JSW MG Motor was able to capture a 41% share against 46% for Tata Motors.
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“The company acknowledged that the competitive intensity has increased in the EV segment, especially from JSW MG Windsor,” Kotak Analyst Rishi Vora wrote in a note dated 12 March. “Tata Motors believes more new launches by OEMs will result in the expansion of the EV segment, which will benefit them eventually.”
The company is planning to boost its servicing network to address its shrinking market share in the EV and passenger vehicle segments. In February, when the country’s passenger vehicle sales declined 10% year-on-year, Tata Motors slipped behind Mahindra & Mahindra Ltd by volume market share.
“Given the rise in its market share without a corresponding increase in servicing throughput, customers are now facing challenges in receiving timely service,” analysts at Motilal Oswal said in the note. “It plans to encourage dealers to invest in service capabilities, emphasizing that it aligns with their long-term interests.”
The company, analysts said, is confident of climbing out of the EV slump.
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“The management indicated that worst is behind in terms of volumes for EVs and it expects to meet its EV penetration target of 20% by FY27,” Saksham Kaushal and Ronak Mehta of JM Financial wrote in an 11 March note.
The company’s shares have also fallen in the past six months. Tata Motors stock dropped 13% during the period compared to 11.6% fall in BSE Auto.
“Tata Motors has to pick up their game due to the rising competition with other players in the EV space,” said Jay Kale, Executive Vice President at Elara Capital. “JSW MG Motor and Mahindra are expected to pose stiff competition along with Hyundai and Maruti. This will also aid EV category growth.”
But it’s not just slowing EV adoption and rising competition that the company must contend with. The threat of US tariffs also looms, with president Donald Trump planning to introduce a 25% levy from April 2.
“As is the case with all the global OEMs (original equipment makers), the threat of tariffs is something to watch out for Tata Motors, which would be a headwind for growth,” Kale said.
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Tata Motors’s management told analysts that it is tracking the situation.
“Uncertainty around the impact of tariff barriers persists,” Motilal Oswal’s note said, “and the company will wait to assess whether any material changes to its current business model are necessary as a result.”
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