123
/
3
Min Read
Ahead of the Union Budget 2026, Tata Motors has urged the government to consider targeted fiscal support for entry-level electric vehicles (EVs) and to extend incentives to electric cars used in the fleet segment under the PM E-DRIVE scheme, citing rising affordability pressures in the lower end of the EV market.
Tata Motors Passenger Vehicles Managing Director and CEO Shailesh Chandra said that while policy interventions such as GST reforms, repo rate cuts and changes in the tax regime have helped revive demand in the passenger vehicle (PV) market, entry-level EVs continue to face challenges due to shifting price dynamics.
“I would like to appreciate the government for the steps taken to revive the PV industry and the electric vehicle sector. Two aspects could be considered in the Budget—first, the entry-level EV segment is under significant pressure, and some level of incentives could help,” Chandra said.
He noted that recent GST reforms have reduced prices of petrol-powered cars, intensifying competition for entry-level EVs and impacting their value proposition among price-sensitive customers.
Highlighting the broader impact of policy measures, Chandra said that initiatives such as GST 2.0, repo rate reductions and tax regime changes have played a key role in boosting overall demand in the PV industry.
Chandra also emphasised the importance of the fleet segment, pointing out that although electric cars used by fleets account for only about 7 per cent of total PV volumes, they contribute nearly 33–35 per cent of passenger kilometres. He added that while fleet EVs were supported under the earlier FAME-II scheme, they have not yet been included under the PM E-DRIVE programme.
“A fleet car runs about five times more than a passenger car. Supporting this segment creates a multiplier impact at the environmental level, whether in terms of zero emissions, reduction in particulate matter or lower oil imports. This segment was recognised under the FAME scheme, and the government may consider including it under PM E-DRIVE as well,” he said.
On pricing, Chandra said Tata Motors is facing cost pressures due to foreign exchange volatility and rising commodity prices, which have impacted revenues by around 2 per cent. While the company has absorbed these costs so far, it may eventually have to pass on some of the burden to consumers.
Several automakers have already announced price hikes in recent weeks, citing similar challenges related to currency fluctuations and increasing input costs.
