On October 12, Ratan Tata, a titan of Indian business, passed away. From Tetley Tea to Jaguar Land Rover and Air India, he fulfilled nearly every goal on his life’s wish list—except for one: the Tata Nano EV. This car became his only regret.
Tata’s ambition throughout his career was to provide affordable, efficient transportation to millions of Indian families. Had the Tata Nano EV succeeded, it could have been a groundbreaking achievement for both India and the global electric vehicle (EV) market.
In 2015, the Tata Group, in partnership with Indian automotive company Jayem, sought to develop a low-cost electric car, the Jayem Neo EV, which later became known as the Tata Nano EV. Ratan Tata personally oversaw the project, and hopes were high. The Nano EV was designed in two versions: a 48-volt and a 72-volt model. By 2018, Jayem produced 400 units, selling them to Ola Cabs for use in Hyderabad and Bengaluru during the early stages of the pandemic. However, despite the anticipation, the car was never officially launched, and Tata’s company never publicly explained why it was withheld.
Speculation surrounds the reasons for the Nano EV’s failure, but one key factor is India’s slow pace in adopting electric vehicles. Bhavish Aggarwal, the founder of Ola, has credited Tata as his guiding influence. He recalls a pivotal moment when Tata personally invited him to Coimbatore to test drive the Nano EV prototype. This experience inspired Aggarwal to launch Ola Electric, which today commands a third of India’s electric two-wheeler market, having sold over 300,000 units within three years. In contrast, the electric four-wheeler market has not seen similar growth.
The Nano EV, if it had materialized, would have been positioned as an affordable, compact car with an estimated price range of INR 400,000 to INR 600,000, a speed of 60-70 km/h, and a range of 300 km. Despite these appealing specifications, the car never came to market, leaving behind only unanswered questions.
The Nano EV’s failure is particularly striking given the legacy of its predecessor, the Tata Nano, which was launched in 2009 as one of the world’s cheapest cars, priced at around $9,000 today. The Nano was born from Tata’s vision to provide an affordable alternative to unsafe two-wheelers, sparked by a personal experience where he saw a family riding in the rain on a motorcycle.
The Nano’s design was a testament to cost-saving innovation: metal was replaced with plastic where possible, glue was substituted for welding, and features were minimal—only one rear-view mirror, hand-cranked windows, no airbags, and a sealed boot. Despite the strong initial demand, with nearly 70% of sales occurring in the first three to four years, fewer than 300,000 units were sold over a decade, in a country with over 1.4 billion people.
Many analysts argue that the Nano’s failure wasn’t due to its simplicity or safety features, but because of its stigma. In a class-conscious society like India, owning the “cheapest car” was seen as a social liability. Some believe the Nano EV, launched under the same name, would have been similarly tainted. Puneet Gupta, an automotive analyst, suggests that consumer preferences have shifted away from small cars, as reflected in the decline of sales in India’s fuel-car market.
J Anand of Jayem Motors, a key partner in the Nano EV project, has been reluctant to discuss its failure. He cites factors such as government regulations, the COVID-19 pandemic, and stringent crash standards as impediments. While reports suggest that engineers struggled to reduce the cost of the 72-volt version and that the car failed crash tests, Anand has stated that there are no plans to revisit the Nano EV project.
India, with its vast population and growing market, was once seen as a blue ocean for the automotive industry, but this notion has proven to be false for many international brands. Tesla has yet to deliver an electric car, and Chinese brands, after several attempts, have withdrawn from the market. Despite these struggles, India remains a highly attractive market for electric vehicles. By 2030, the Indian government aims to have 50 million EVs on its roads, with the market size projected to reach $48.6 billion, and electric vehicles expected to account for nearly one-third of the passenger car market.
While the government has expressed strong support for the growth of EVs, the reality is mixed. The highest penetration is in the three-wheeler segment (54%), followed by two-wheelers (6%), while electric four-wheelers account for a negligible share of the market. In FY2023, electric four-wheeler sales were just 90,000 units, or 2% of total vehicle sales, despite doubling year-on-year.
India’s electric vehicle market lags far behind China, which has rapidly expanded its EV offerings. As of July 2024, only 13 Indian automakers had at least one EV model, compared to China’s far more extensive range. Tata, BMW, and Audi lead the Indian market, with Tata capturing nearly two-thirds of the electric passenger car market. However, Maruti Suzuki, the leader of India’s passenger car market, has yet to launch any EV models. Moreover, the electric taxi market in India is underdeveloped, with BluSmart scaling back its ambitious plans for 100,000 electric taxis by 2025 to just 10,000 by early 2024.
Despite these challenges, India’s shift to electrification is inevitable. Hyundai’s new unit in India is set to launch a compact electric car, and Tata is planning to expand its EV lineup in the near future.
China, as a leader in the global electric transition, demonstrated how affordable EVs could become mainstream. The Wuling Hongguang MINI EV, priced at around $4,152, played a key role in this transition. In contrast, India’s EV market still lacks such affordability.
However, in early 2024, as battery costs fell, India began taking steps to make electric vehicles more accessible. The MG Comet EV became the cheapest EV in India, priced at approximately $60,000, while the Tiago EV is priced at around $68,486. Despite these price reductions, the Nano EV remains a highly anticipated model, with rumors circulating that Tata might soon release it.
Reports suggest that Tata could partner with Jayem, an unknown company, to release the Nano EV. While the design, interiors, and exteriors may be identical to the petrol-powered Nano, the logo would change from Tata to Neo. Since Jayem is largely unknown, the Nano EV will likely carry Tata’s legacy. If successful, it would be a triumph for Tata, but if it fails, Jayem would bear the blame, with Tata’s reputation and stock price unaffected.
The new Nano EV represents a significant departure from its predecessor. It includes modern features such as an infotainment system, Bluetooth, six speakers, power steering, power windows, ABS with EBD, and a 7-inch touchscreen. With a range of 100-120 km per charge and a top speed of 80-90 km/h, the Nano EV would be an excellent choice for daily commuting. Moreover, with an expected starting price of about $38,000, it is set to be one of the most affordable options in the Indian EV market.
Eight years after its initial unveiling, questions remain: will the Nano EV fulfill its promise? Can it become India’s answer to the Wuling Hongguang MINI EV, or is the Indian EV market still a distant dream? The success or failure of the Nano EV will determine whether Ratan Tata’s vision—and his regrets—can be redeemed.
Source: Times of India, Shifting Gears
