Tata Motors is launching a $10,000 electric car in India to increase its lead| Roadsleeper.com

NEW DELHI, Sept 28 (Reuters) – Tata Motors ( TAMO.NS ) launched India’s lowest-priced electric car at just over $10,000 on Wednesday, as the country’s only electric car maker looks to attract more buyers.

Tata leads India’s electric car market, aided by government subsidies and high import duties.

Its move comes as domestic rival Mahindra & Mahindra ( MAHM.NS ) is in talks with investors to raise up to $500 million for its electric car unit and plans to launch its first electric sport-utility vehicle (SUV) in January. Read more

Tata’s Tiago EV, an electric version of its popular Tiago hatchback, will have a sticker price starting at 849,000 rupees ($10,370). The majority of cars sold in India, the world’s fourth largest car market, are priced below $15,000.

That’s much cheaper than India’s next most affordable electric car – the electric version of Tata’s compact Tigor sedan which starts at around $14,940. However, China has some electric car models that start as low as 32,800 yuan ($4,525).

The Tiago EV’s running cost is expected to be about one-seventh of the petrol version, making it a “compelling proposition”, said Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and its EV subsidiary.

“We’re not aiming to be the lowest cost,” Chandra said, adding that the goal was to pack in connected car features and other advanced technologies while keeping the price affordable.

Chandra said the car’s “disruptive” pricing would open up new opportunities and markets for Tata in smaller towns and cities, where buyers tend to be more price conscious.

Tata, India’s third-largest carmaker, last year raised $1 billion from TPG ( TPG.O ) for its EV unit at a $9.1 billion valuation, and has outlined plans to launch 10 electric models by March 2026 .

India’s car market is small compared to its population, with electric models making up just 1% of total car sales of around 3 million a year, but the government wants to increase this to 30% by 2030.

The cheapest version of the Tiago EV – Tata’s third electric car – will have a range of 250 kilometers (155 miles) on a charge, while a more expensive version will offer a range of 315 km.

Chandra said data from existing Tata EV owners showed an average daily usage of about 50 km, prompting the company to provide a shorter range to keep the price down.

“There’s always a challenge to how we hit the right price,” Chandra said, adding that the current sticker price was only for the first 10,000 buyers.

Reporting by Aditi Shah in New Delhi; Additional reporting by Zoey Zhang in Shanghai; Editing by Edwina Gibbs and Mark Potter

Our standards: Thomson Reuters Trust Principles.