New EV policy not suitable for JLR: Tata Motors CFO

Tata Motors group chief financial officer P.B. Balaji on Thursday said the automaker has no plans to leverage India's new electric vehicle manufacturing policy for its British subsidiary Jaguar Land Rover (JLR).

"At this point in time, that specific policy is not something that is suitable for us. So we don’t intend to leverage it at this point in time," Balaji says in a media briefing after Tata Motors quarterly earnings announcement.

To encourage manufacturing of EVs in India, the government slashed customs duty on electric cars with cost, insurance and freight value of $35,000 or more to 15% from existing 100% if an automaker commits an investment of at least ₹4,150 crore and achieves 50% localisation in five years.

JLR will continue to look at opportunities for manufacturing through CKD (completely knocked down) kits to ensure similar benefits of 15% customs duty without taking on additional obligations in terms of localisation, Balaji says.

JLR India localised the manufacturing of Range Rover and Range Rover Sport in May this year. “There is a huge pick up in orders. As volumes pick up, we would want to localise as much as possible... We continue to evaluate CKD as a more attractive option given our scale in India,” says Balaji.

In the domestic passenger vehicle market, Tata Motors' electric vehicle sales dropped 21% to 5,027 units in July as against 6,329 units in the same month of 2023.

Balaji attributed this decline in EV sales to the removal of incentives for fleet-operated passenger four-wheelers and broad-based slowdown in car sales in the month of July.

With the upcoming launch of Curvv EV, the carmaker expects the momentum to build back in the EV business. “We expect it to recover from here on, especially with festive demand coming up,” says Balaji.

The Tata Motors group CFO expects the next FAME scheme to include incentives for four-wheelers. “It is going in the fleet segment and it is public transport that’s getting electrified. Therefore there is a logic of incentives to be made out,” he says.

Tata Motors reported a 74% year-on-year jump in its net profit at ₹5,566 crore for the quarter ended June 30, 2024. Revenue from operations rose 5.7% year-on-year to ₹107,316 crore for the first quarter. Revenues from its luxury car unit JLR grew 5.4% to 7.3 billion pounds.

Tata Motors expects global demand to remain muted. It, however, sees domestic sentiment improving. “We expect gradual improvement in domestic demand during the rest of the year on account of continued investments in infrastructure, healthy monsoons, favourable macros and festive demand,” the automaker says.