Tata Motors expects CNG, EV sales to increase by 20 percent in next 3-5 years

“I think CNG is a segment which is going to grow in the coming years. This will be a subset of the petrol, because this is being triggered with the rising cost of petrol,” said Shailesh Chandra, Tata Motors President Passenger Vehicle.

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Tata Motors expects the CNG cars and electric vehicle segment to grow up to 20 percent over the next three to five years. The company anticipates more entry-level petrol and diesel customers to opt for such models, a top company official has said.

The Mumbai-based auto major is also bullish on the electric vehicle segment and its overall dispatches over the next few years. "I think CNG is a segment which is going to grow in the coming years. This will be a subset of, I would say, the petrol because this is being triggered with the rising cost of petrol,” said Shailesh Chandra, Tata Motors President Passenger Vehicle and Electric Vehicles in an analyst call.

“It uses a petrol engine...And therefore, it will mostly cannibalize petrol and to a great extent, also diesel, replacing diesel in the entry segment."

Therefore, the company sees a strong future of this, given that there is a deeper penetration and expansion of the CNG outlets which is taking place in the country, he added. Chandra noted that currently, diesel car sales across its portfolio stand at around 15 percent, while petrol and CNG sales account for roughly about 66 percent and 12 percent, respectively. EVs account for the rest of the dispatches.

"In the next three to five years, petrol will possibly come down to about 50 percent level, CNG will go up to 20 percent. Diesel would come down further to about 10 percent and I would say (for) EV..., we have already declared our target of going more towards 20 percent," Chandra stated. Elaborating further, he said the company is focusing on the hatchback and compact sedan segments for expansion of the CNG model range.

"I think in SUVs, CNG might struggle, given that it is a very performance-oriented segment, and less sensitive to running costs. Therefore, I see that CNG will have only partial penetration in those segments. But yes, given the price points and the economics of CNG versus petrol, it might play out to some extent, but not as deep penetration as we are seeing in the entry segments," Chandra said.

"Compact sedan is doing well because of the boot space that you get, which is completely compromised on the hatch, and that's the thing that we're seeing in the demand profile also that we are getting for the models that there is a strong preference for a compact sedan, therefore, given the boot space that it gives. So, therefore, we would target a few more segments. We're working on them. But as of now, we have focused on the hotspot of CNG, which is compact sedans and hatches," he further added.

On a query whether the company would look at hybrid cars, Chandra said the company has taken a conscious decision to go with EVs. "There are certain players who have taken a position on hybrids and they have vehicles available, and therefore, they are pursuing it primarily to meet the requirement of Corporate Average Fuel Economy (CAFE). The way we see this technology is mainly for compliance and its relevance is only going to sustain itself for next few years," he stated.

The company is focussing on technologies, which will not only help us to meet the CAFE requirement but also enable us to lead the charge as far as zero-emission technologies are concerned, Chandra said. "And that's why we have taken a conscious call of focusing on EVs," he noted.

On the company's plans regarding flex-fuel, Chandra said, "The first milestone for us is in 2025 where it is mandated that we need to be ready with E20 for all our models and we are pretty much on track as far as that is concerned."

With inputs from PTI