Tata Motors EESL tender

As the world adores the concept of Tesla’s Model 3 and Model S, the government of India has gone ahead with the procurement of Made-In-India electric vehicles. India is likely to adopt an electric vehicle policy by December 2017. Nitin Gadkari, Minister of Roads and Surface Transport has ambitiously said, India will only run electric vehicles by 2030. Analyst suggests the move is in line with India’s commitment towards Paris Climate Deal.

In the first phase of electric vehicle funding, Energy Efficiency Services Limited (EESL), under the administration of Ministry of Power, Government of India, will procure 10,000 electric vehicles from Tata Motors Limited. The company was selected through an international competitive bidding aimed at increased participation. Tata Motors won the tender and will now supply the Electric Vehicles (EVs) in two phases – first 500 e-cars will be supplied to EESL in November 2017 and the rest 9,500 EVs will be delivered in the second phase. Tata Motors will supply its Tigor EV model to EESL by the end of 2018.

The tender floated by EESL is the world’s largest single electric vehicle procurement. Three leading manufacturers – Tata Motors, Mahindra & Mahindra and Nissan participated in the tender and the bids for TATA Motors and Mahindra and Mahindra were opened.

EESL is driven by the objective of facilitating faster adoption of disruptive technology solutions while balancing economic development and environmental sustainability. With this specific initiative, EESL seeks to create the market for electric vehicles, a technology which is poised to boost e-mobility in the country; through its unique business model of aggregation of demand and bulk procurement. EESL is seeking to leverage the immense potential of replacement of existing vehicles in the government departments for initial demand aggregation.

Tata Motor Limited quoted the lowest price of ₹10.16 Lakh exclusive of GST in the competitive bidding. The vehicle will be provided to EESL for ₹11.2 Lakh which will be inclusive of GST and comprehensive 5 year warranty which is 25 % below the current retail price of a similar electric vehicle with 3 year warranty.

Anand Mahindra was quick to congratulate Tata Motors for bagging world’s largest electric vehicle tender. Mahindra & Mahindra also bagged the contract from EESL after they agreed to match the price of their sedan e-Verito with Tata’s bid.

India is a net importer of petrol and diesel. A push towards alternative fuels like methanol or electricity will reduce the fiscal deficit of the country. Indian cities are largely a victim of pollution. On 7th November 2017, PM 10 material at New Delhi’s Karol Bagh area reached 999, almost 10 times higher than permissive levels. A move towards electric mode of transport would not just be eco-friendly but indigenous. The government of India is likely to replace all its 6 lakh vehicles with an EV by 2022.

EESL plans to call tenders for the second phase of procuring 20,000 electric vehicles by Q1 2018. Tender cost is likely to above ₹2,000 crore. Nitin Gadkari at Pravaas India Expo 2017 said that Indian government wants to build healthy competition in EV space. This will ensure that the price of the battery will come down. Within few years, the general public will opt for EV than conventional diesel guzzling car as it will be 10 times cheaper to run. The same revolution will take place in public transport buses. In a move, Ola cabs have introduced 200 e-taxi in Nagpur.

The move to electrical vehicle is sceptical as India is yet not 100% power surplus and load shedding is common seen in rural areas. India aims to generate 175GW electricity by renewable means by 2022. As per white paper published by NITI Aayog, making India’s passenger mobility shared, electric, and connected can cut its energy demand by 64% and carbon emissions by 37% in 2030. This would result in a reduction of 156 Mtoe in diesel and petrol consumption for that year & at USD 52/bbl of crude, this would imply a net savings of roughly ₹3.9 lakh crore in 2030.

– Chaitanya Kulkarni

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