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Tata Motors Ltd and Mahindra and Mahindra Ltd are locked in a price war as they battle for dominance in India’s electric sport utility vehicle (e-SUV) market, in which Tata currently holds nearly 80% share with its Nexon EV range.

Mahindra’s recent launch of the electric XUV400 has put pressure on Tata, prompting it to cut prices across the Nexon EV range and introduce lower-priced trims in the long-range variant of the SUV, Nexon EV Max.

Graphic: Mint
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Graphic: Mint

Tata Motors sells the Nexon EV in two variants: Prime, with a 30.2 kWh battery, and Max, with a larger 40.5 kWh battery. The Prime variant has a 312km range on a single charge, and the Max variant, with an upgraded range of 453km, will be available to customers starting on 25 January. Existing owners can also upgrade through an over-the-air software update.

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The base variant of the Nexon EV Prime will now be sold at 14.49 lakh ex-showroom, down from 14.99 lakh, whereas the top trim of the Nexon EV Max has seen the steepest price cut, from 19.84 lakh to 18.99 lakh.

Moreover, Tata Motors has introduced two new trims in the long-range Nexon EV, which accounts for nearly half of Nexon EV sales.

Tata Motors has cut the price of its Nexon EV to match Mahindra’s XUV400 extended-range variant. The XUV400 EC starts at 15.99 lakh ex-showroom and offers a 375km range on a single charge with a 3.3 kW charger, whereas the same trim with a 7.2kW charger is priced at 16.49 lakh. The XUV400 EL, with a 475km range, is priced at 18.99 lakh.

Mahindra plans to raise prices for the XUV400 after receiving its first 10,000 bookings. It will start deliveries in March for its extended-range variant, while the XUV400 EC will come to the market around the festive season.

Tata’s move to cut prices comes as lithium-ion cell costs rise and new battery safety standards are set to increase EV costs by 1-1.5% in April.

“Because we have the lion’s share of the market, we are also expanding the market. There may be an impact on margins, but we aren’t taking a hit because we are passing on the benefits of localization, incentives under the PLI scheme, and our efforts on smart engineering, which has enabled us to achieve a rationalization in our costs", Vivek Srivatsa, head of marketing and sales, Tata Motors. “We took a price increase in the second half of last year in response to the cost increases we were seeing and the burden we anticipated going ahead. Now, we wanted to revisit our costs with a comprehensive view because we have not only a wide range within the Nexon EV model line but also models such as the Tiago EV, which sit below the Nexon EV, so we wanted to achieve the correct relative positioning."

Tata Motors will also hike the prices of the Tiago EV once it fulfils its first 20,000 orders.

“If costs go up in the coming months, whether due to the new battery rules or battery prices, we will have to respond. We are not ruling it out," Srivatsa said, responding to whether the company will look to hike prices in the coming months as cost pressures build up.

Srivatsa is confident in Tata Motors’ market positioning as he views any competition as “perceived" until the products are delivered to the customers. “All our products are immediately available for booking, and we are delivering the new variants as early as April. We aren’t asking the customer to wait for 8-9 months," he said.

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ABOUT THE AUTHOR

Alisha Sachdev

Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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