Tata Motors, which had set a record by bagging the world’s largest e-car order from Energy Efficiency Services (EESL) last month, today said it will make money from each unit it will sell to the government body, in sharp contrast to Mahindra, which had said it was stumped by the winning price.
The EESL order for 10,000 electric sedans is the single-largest in the world and Tata Motors, which has no e- car product so far, will have to begin delivery of the first batch of 500 cars by November 30.
Tata Motors today said it will be selling the electric version of its popular sedan Tigor to EESL. The car will be rolled form its Sanand plant on the outskirts of Ahmedabad.
Tata Motors had bid for Rs 11.2 lakh including annual maintenance contract, which was Rs 2.3 lakh lower than M&M’s bid. Tatas also offered a substantially lower running cost of Rs 0.25/km compared to Rs 1.35/km by M&M.
Though Tata Motors was eligible to supply the entire 10,000 order, ESSL later asked Mahindra, the only domestic e- car maker, to match the pricing of the Tatas.
“We will be making enough money from each of the units that we will be selling to EESL. As of now, we will be selling 6,500-7,000 units and if the other company (Mahindra) opts out we will lap up the rest of the order as well,” Guenter Butschek, MD & CEO of Tata Motors said.
When asked whether they will be able to meet the delivery deadline of November 30 for the first phase of 500 orders, of which Tata Motors will be selling 350 and M&M the remaining 150 units, Butschek answered in the positive.
“All I can tell you now is that we are capable of meeting all the order requirements,” said Butschek who was addressing the media at the second quarter earnings presser.
In sharp contract, it can be noted that days after agreeing to match Tata Motors’ order, Pawan Goenka, managing director of M&M, had said they would lose money on every unit of its fully electric sedans it had committed to supply to EESL and that he was stumped by the rival’s pricing.
“It is difficult to comprehend the price quoted by the L1 bidder (Tata Motors) though we’ve been in the e-vehicle business for sometime and we know the cost structure and subsystems very well.
“We will not be making any money on the cars we supply to EESL. We will be losing money on every car,” Goenka had said at a concall on October 9.
The EESL contract will be executed in phases and the first phase involves 500 cars. Tata Motors had initially opted for 250 cars but increased it to 350 after M&M chose only 150.
While M&M has a few products under its Verito label, which is essentially a soupped down Renault Logan, which Goenka claimed is more powerful and bigger than the Tigor, the sub-4 meter compact sedan Tatas launched a few months ago.
“I don’t know the specifications of the L1 car since it is not yet out in the market, unlike the Verito, which has been there for sometime. The Verito has a 20.5 kwh electric motor which can do 170-180 km on a full charge,” Goenka said.
According to EESL tender, the sedan should have a range of 130 km on a full charge, can be fully charged in 6 hrs and should have a fast charge option of 90 minutes.
Goenka had also said they had not decided on bidding for the second phase saying, “will take a call if we are able to bring down the cost.”
Mahindra is the only domestic company to have launched electric passenger cars though the EESL contracts saw Japanese giant Nissan too bidding.
Editor’s Note: This post was originally published in moneycontrol