The country’s largest electric carmaker Tata Motors has started working with used car marketplaces to facilitate resale and exchange for electric vehicle (EV) owners.
A company spokesman said Business standard“We have been working on opportunities to facilitate resale or trade-in of EVs for those owners looking to upgrade to a new EV. Our plans are currently at an early stage and we are doing small-scale pilots with online used vehicle marketplaces.”
The company has the largest fleet of electric vehicles in India, estimated at around 170,000 units. As a pilot project, the company has already started working with Spinny, the online marketplace for used cars.
While both Tata Motors and Spinny declined to comment on the matter, used Tata Nexons are up for sale on the platform.
A 2021 Nexon EV XZ Plus is available in Mumbai for Rs 11.61 lakh on the platform.
A new Tata Nexon EV is available for Rs 12.49-16.49 lakh.
According to dealer sources, prices for electric vehicles typically fall in line with their internal combustion engine (ICE) counterparts. This is around 25 percent in the first year and thereafter depends on usage (miles travelled and battery life).
A Tata Motors spokesperson said the used EV market is likely to closely mirror the new EV market with a lag of 3-4 years.
“The used EV market is likely to closely mirror the new EV market with a 3-4 year lag as early adopters upgrade to longer range and more advanced EVs. The main EV volumes will occur between 2021 and 2022. So we will see the initial batch of people upgrading in 12-24 months,” the spokesperson said.
Two Mumbai-based Tata Motors dealers have confirmed that they have already started receiving customers who want to exchange a Tiago or Nexon EV for a new Tata EV.
“We are trying to do our best when exchange demands arise. It would be great if the company partners with used EV buying marketplaces as tariff standardisation remains a challenge in this category,” said a dealer based in Mumbai’s eastern suburbs.
A used car market executive said the benefit of buying from a marketplace is that there would be a warranty on this used electric vehicle.
“Many people who are concerned about price and savings are opting to buy used EVs as the batteries are guaranteed for 8-10 years. These batteries can last much longer, depending on the charging cycles. You can do up to 2,000-3,000 charging cycles. Even if you charge once a week, you get 52 charges a year. Or a 3- or 4-year-old EV would probably have been charged just 200 times,” said another executive.
“The cells can be replaced, if necessary, and the EV is ready to go. One of the main challenges to EV adoption is the cost of acquisition. Used EVs may be the answer,” the person said.
A Tata Motors spokesperson told Business Standard that used EVs will continue to have a strong value proposition for those who prefer to try out a lower-cost EV. This will help people understand the benefits of their use case better before buying a new EV.
“Customers with budget constraints and many operational use cases will also opt for them for their inherently low running cost and the security of the powertrain residual warranty period,” he added.
Tata Motors has been working towards greater price parity between its electric and internal combustion vehicles. Earlier in September, Vivek Srivatsa, Chief Business Officer, Tata Passenger Electric Mobility, said, “Our sole purpose at Tata.ev is to mainstream electric vehicles by breaking barriers and making them more accessible to regular car buyers. With these limited-time special prices, we are breaking the barrier of high acquisition cost of electric vehicles. We are bringing their prices closer to that of similar petrol and/or diesel-powered vehicles.”
Srivatsa was speaking about the festival discounts on Tata cars, including electric vehicles.
As such, FY25 has been a tough year for the company’s EV sales. In the first quarter of FY25, while Tata Motors’ PV vehicle wholesale sales fell by 1.1 per cent, EV volumes (16,600 units) fell sharply by 13.9 per cent due to a sharp decline in the fleet segment.
Shailesh Chandra, CEO, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said the EV sector was impacted by the broader industry trend and the impact of a significant increase in fleet sales in the fourth quarter of fiscal year 2024. This is due to the expiry of the FAME II subsidy in March 2024.
“Consequently, while retail sales in the personal segment grew slightly, a sharp decline was observed in the fleet segment, which is expected to recover in the coming quarters,” he said.
The company has also initiated joint plans with Tata Power for electric vehicles and solar roofs that ensure zero operational costs for the buyer.
A company spokesman said Business standard“As more people begin installing solar panels on their roofs, owning an electric vehicle will become even more beneficial.”
As such, other players like Maruti Suzuki, which are planning to bring in electric vehicles, have said that they plan to offer a “holistic” electric vehicle ecosystem to the customer.
Partho Banerjee, executive director, marketing and sales, Maruti Suzuki India, said last week: “We have done basic research. We are not just going to launch the product. We are going to offer a complete ecosystem to the customers who will be a part of this family of electric vehicles. The three big concerns are range anxiety, EV charging infrastructure and the residual value of the electric vehicle after five years of use. Nobody knows today what the residual value of an electric vehicle will be.”
Premium car manufacturers such as Mercedes Benz offer a guaranteed residual value to their electric vehicle customers. For example, the new EQS SUV will have a residual value of 60% after three years and 45,000 km.
First published: September 18, 2024 | 12:35 am IS
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