Top officials from Tata Motors demonstrate skepticism about BaaS model for electric vehicles because they see it as mostly marketing rather than practical value for customers.
The leading Indian electric car manufacturer Tata Motors does not support the Battery as a Service (BaaS) model for electric vehicle (EV) market operations. Corporate leadership acknowledges BaaS provides better marketing value than tangible advantages to purchasing customers.
Acquisition Costs
Under the BaaS model buyers can obtain EVs at lower initial prices since they do not include upfront battery expenses. The battery usage fee operates as a regular payment system. The EV product range from Tata Motors includes Tiago.ev, Tigor.ev, Punch.ev, Nexon.ev and Curvv.ev.
Sales Data
Total electric cars units sold out by Tata Motors in 2024 were 61500 vehicles, which led to a 2.32% change in market share compared to 60100 vehicles in 2023. For this time, Tata Motors had increased their unit sales figures but their market share decreased from 72.68% to 62.01%.
That translates to a market share change of 2.32% as a result of 61500 electric cars units sold out of Tata Motors in 2024; a total of 60100 vehicles sold in 2023. Business organisations can use this financial format without requiring battery removal from their motor vehicles as it operates through business arrangements.
Marketing Value
Chandra expressed that BaaS holds more value for marketing purposes rather than delivering actual benefits to consumers in his present evaluation. JSW MG Motor India stands as the sole major automaker in India that provides its EV models such as Comet Windsor and ZS with battery as a service model.
GST Implications
Chandra expressed his concern about BaaS economics since the Goods and Services Tax (GST) rules reduce its financial attractiveness. Mathematical calculation demonstrates that BaaS service will cost more than purchasing an entire vehicle due to the 18% GST taxation of service while owning the same battery integrated within a car with vehicle purchase. The financial aspects led him to state these words as he explained.
Tax Benefits
The GST tax rate for electric cars amounts to 5% whereas cars equipped with internal combustion engines (ICE) face taxes at 28% in India. Chandra described both financial and physical aspects which result in 5% GST application. After using two independent financial methods you will end up with two distinct tax situations. The process requires you to handle two financial payments both for purchasing and for selling your vehicle at a later date.
Customer Perception
According to Chandra BaaS focuses primarily on transforming customer perception regarding the difference between spending money on operating a car and purchasing a vehicle. According to my understanding, the market share of vehicles sold with this program from whatever manufacturer operates this approach remains low. According to his assessment my insight reaches only typical customer perspectives on purchasing and selling costs.
BaaS Consideration
According to his response in the interview Tata Motors has not formulated a response about the BaaS model system implementation. This business model became the focus of serious adoption discussions at our company throughout the previous two years. He emphasised marketing potential during his statement about this point. Despite my statement, “I do not endorse this at present because our current discussions do not indicate such plans. But we don’t know.”
Market Share
Maintenance of market share during present times in the electric passenger vehicle segment remains a focus at Tata Motors. The company continues to offer discounts and free charging benefits yet recognises achieving price parity with internal combustion engine vehicles among critical factors for EV market growth.
Battery Rental
With the launch of Windsor EV3 MG introduced the Battery-as-a-Service (BaaS) model to their customers. The vehicle purchase without the battery under the BaaS model permits lower equipment costs to customers. The EV owners pay their battery usage to MG Motor according to mileage traveled.
Experimentation Open
Tata Motors has reservations about new ideas but maintains an open position to test experimental approaches. The company sells electric versions of its standard models beginning with the Tiago.ev for Rs 7.99 lakh up to the new Curvv.ev priced at Rs 17.49 lakh besides the Tigor.ev at Rs 12.49 lakh and Nexon.ev at Rs 12.49 lakh as well as the Punch.ev at Rs 9.99 lakh for their customers.
Price Reduction
Industry experts predict that model prices will decrease up to Rs 3.5 lakh (not including battery) through the BaaS program. The BaaS model has the potential to decrease battery electric vehicle prices at showrooms by up to 30 percent and at least 25 percent.
Other Automakers
Users can purchase the JSW MG Motor India Windsor EV under the BaaS1 at Rs 9.99 lakh (ex-showroom). The price range of this EV starts at Rs 13,49,800 and ends at Rs 15,49,800. The company now allows customers to purchase Comet EV for a price of Rs 4.99 lakh before offering the battery rental service for Rs 2.5/km to buyers.
Consumer Interest
Multiple reports indicate Tata Motors plans to introduce BaaS model since customers want accessible EV options in the market. The operating costs associated with battery rentals remain affordable to prospective EV customers.
Internal Discussions
The ongoing planning process will finish only after the company evaluates how consumers first react to the proposal15. Before undertaking extensive product deployment Tata Motors plans to conduct test programs that evaluate consumer reaction to determine if market release should proceed.
Looking Towards the Future
The EV market might experience a transformative development if Tata Motors chooses to implement the Battery-as-a-Service model according to industry experts. The proposed battery rental program from the company will benefit both Indian price-conscious consumers and solve doubts regarding battery lifetime and performance.
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