The Indian multinational automotive firm, Tata Motors, seems to be exploring the feasibility of a Battery-as-a-Service (BaaS) model for some of its product lines, in a bid to strengthen its market leadership in battery electric vehicles (BEVs).
Bringing Down BEV Prices With The Introduction Of Baas
The sources claimed that the battery rental option for consumers is expected to bring down the ex-showroom prices of its BEVs by 25-30 percent.
The carmaker is planning to offer the battery rental option in the electric variant of Tiago, Punch, Tigor, Nexon and other models.
The car buyers purchase the EV without the battery, thus reducing the upfront cost of the EV, under this BaaS model.
With this approach, the vehicle is available at reduced prices and the consumers have to pay rentals on battery usage on a per-km basis.
When it comes to the implementation, there are strong chances that Tata Motors will give BaaS options because consumers are actively looking for affordable EV options.
Even one of the sources said, “Its prospective consumers are ready to shell out monthly battery rentals which are economical to operate,” on the request of anonymity.
Further clarified that plans are right now on the drawing board, so the final call will be taken after gauging the initial response to pilot runs.
Already In The Market
The JSW MG Motor India has already introduced this offering in Windsor EV, In the domestic Passenger Vehicle (PV) market.
This offering is priced in the range of Rs 13,49,800 to Rs 15,49,800 and can be bought for Rs 9.99 lakh (ex-showroom) under the BaaS programme (Rs 3.50/ km additionally).
Further, the vehicle maker has extended this option to Comet EV (price starts at Rs 4.99 lakh + battery rental at Rs 2.5/km) and ZS EV (starts at Rs 13.99 lakh + battery rental at Rs 4.5/km) a few weeks later.
The introduction of a wider portfolio of EVs by Tata Motors indicates that the vehicle maker is keen to hold on to its current market share of 75-80 percent in the electric PV space with.
The company is providing discounts and free vehicle charging in order to attract some buyers.
Despite that the company has discerned that price parity with ICEVs will actually gravitate customers.
Another source on the condition of anonymity said, “Taking a cue from JSW MG Motor India, the company is deliberating on the battery rental options.”
Tata Motors is presently selling electric variants of its ICE models such as Tiago.ev (Rs 7.99 lakh onwards), Tigor.ev (Rs 12.49 lakh onwards), Punch.ev (Rs 9.99 lakh onwards), Nexon.ev (Rs 12.49 lakh onwards).
The car maker has recently launched Curvv.ev (Rs 17.49 lakh onwards).
How Does This Help?
According to industry observers, the initiative of the introduction of the BaaS programme will make the prices of the above models come down by Rs 2-3.5 lakh.
In response to the media queries, Tata Motors spokesperson said that “We are always open to experimenting and piloting new ideas. We had tested the BaaS option about three-four years back and found that it was confusing customers. While physically the battery and the vehicle are not separated, financially the pricing model was separating them. It was not easy for customers to understand this and so we decided not to proceed with it then.”
The director at S&P Global Mobility, Puneet Gupta said, “The introduction of Battery-as-a-Service presents a game-changing solution, lowering the cost of EV ownership and bringing these vehicles well within the reach of mainstream consumers.”
“In a market like India, where consumer trust in EVs is still developing and word-of-mouth confidence remains limited, BaaS offers a vital solution. It addresses key concerns about battery technology by ensuring that the OEM retains responsibility for the battery, even when the vehicle changes ownership. This model not only reduces upfront costs but also reassures consumers about battery longevity and performance, a crucial factor in accelerating EV adoption in India,” he added.
