Tata Motors, the country’s largest electric car maker, has partnered with used car marketplaces to facilitate resale and exchange of used cars for electric vehicle (EV) owners.
A company spokesperson said Company standard“We have been working on opportunities to facilitate EV resale/exchange for owners who want to upgrade to a new EV. Our plans are currently in the early stages and we are testing on a small scale with online used car marketplaces.”
The company has the largest EV parking lot in India, estimated at around 170,000 units. As a pilot, the company has already started working with pre-owned online car marketplace Spinny.
While Tata Motors and Spinny declined to comment on the matter, second-hand Tata Nexons are being sold 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.
Dealer sources said that EV prices typically fall in line with internal combustion engine (ICE) prices, around 25 percent in the first year, and then depending on usage (mileage and battery life).
A Tata Motors spokesperson said the used electric car market is likely to be very similar to the new electric car market, with a lag of 3-4 years.
“The used EV market is likely to closely follow the new EV market, with a 3-4 year lag, as early adopters upgrade to longer-range and more advanced EVs. The largest volumes of EVs will be in 2021-22. And so we will see the first group of upgraders in 12-24 months,” the spokesperson said.
Two Tata Motors dealerships in Mumbai have confirmed that they are already receiving customers who want to trade in a Tiago or Nexon EV for a new Tata EV.
“We try our best if there are exchange demands. It would be great if the company partners with used EV buying markets as standardisation of rates remains a challenge in this category,” said a dealer in the eastern suburbs of Mumbai.
A manager of a used car marketplace said that the advantage of buying from a marketplace is that there is a warranty on the used electric car.
“Several people who are value or cost conscious are now open to buying used EVs as the warranty on the batteries is 8-10 years. These batteries can last much longer depending on the charge cycles. Up to 2,000-3,000 charge cycles are possible. Even if you charge once a week, that works out to 52 charges in a year. Or a 3-4 year old EV would probably have hardly been charged 200 times,” said another executive.
“The cells can be replaced, if necessary, and the EV is ready to drive. A big challenge to EV adoption is the upfront cost. Used EVs could 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 would rather try a cheaper EV. This will help people better understand their use case benefits before buying a new EV.
“Customers with limited budgets and high usage volumes will also choose these models because of the inherent low cost of ownership and the security of the remaining powertrain warranty period,” he added.
Tata Motors has been working towards more price parity between its EVs and ICE vehicles. Earlier in September, Vivek Srivatsa, Chief Commercial Officer, Tata Passenger Electric Mobility, had said, “Our sole objective at Tata.ev is to make EVs mainstream by breaking barriers and making EVs more accessible to ordinary car buyers. With these special limited-time prices, we are breaking the high cost of EV purchase barrier and bringing their prices closer to comparable petrol and/or diesel vehicles.”
Srivatsa was talking about festival discounts on Tata cars, including electric cars.
As such, FY25 has been tough on EV sales for the company. In Q1 FY25, Tata Motors’ total PV wholesale volumes declined 1.1 percent, but EV volumes (at 16,600 units) declined sharply by 13.9 percent due to a sharp decline in the fleet segment.
Shailesh Chandra, managing director (MD), Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, had said the EV sector was impacted by the broader industry trend and the impact of significant dominance of fleet sales in Q4 FY24. This is due to the expiry of the FAME II subsidy in March 2024.
“As a result, there has been a slight growth in the private segment sales, but a sharp decline in the fleet segment. This is expected to recover in the coming quarters,” he had said.
The company has also started bundling plans with Tata Power for electric vehicles and rooftop solar panels, which will eliminate any operating costs for the buyer.
A company spokesperson said Company standard“As more people install solar panels on their roofs, owning an electric car becomes even more affordable.”
Other players, such as Maruti Suzuki, which are planning to enter the electric car market, have indicated that they want to offer a “holistic” EV ecosystem to the customer.
Partho Banerjee, senior executive officer, marketing & sales, Maruti Suzuki India, said last week: “We have done some basic research. We are not just going to launch the product. We are going to offer a complete ecosystem to customers who are going to be part of this EV family. The three biggest concerns are range anxiety, EV charging infrastructure and residual value of the EV after five years of usage. Nobody knows today what the residual value of an EV is going to be.”
Premium automakers like Mercedes Benz offer their EV customers a guaranteed residual value. For example, the recently launched EQS SUV will yield a residual value of 60 percent after three years and 45,000 km.
First publication: Sep 18, 2024 | 12:35 AM IST