BaaS refers to Battery-as-a-Service which means that the customers can buy the vehicle and rent the battery to bring the initial cost of purchase down significantly
Tata Motors might be planning the BaaS route after taking inspiration from MG Motor India. The latter launched its Windsor EV a few weeks ago. The main highlight of this EV is its pricing structure. MG has introduced BaaS (Battery-as-a-Service) where it is offering the electric crossover and the battery separately. The aim is to ease the burden off the shoulders of the buyers initially. They can rent the battery and pay the company per month basis their usage. A similar approach could be adopted by the largest EV maker in the country going forward.
Tata Motors To Offer BaaS?
A Money Control report hints that the Indian auto giant is currently exploring opportunities with BaaS. We know that Tata Motors owns over 75% of the entire EV market share in India. Its products like the Punch EV, Tiago EV, Tigor EV, Nexon EV and Curvv EV have been posting healthy sales every month. In essence, Tata Motors leveraged the popularity of the ICE versions of these cars and introduced electric iterations at relatively attractive price points. As per this report, if Tata Motors offers BaaS, we might see the prices of its EVs drop by around 30%. This could roughly translate to anywhere between Rs 2 lakh to Rs 3.5 lakh. This is naturally a substantial number.
A Tata Motors spokesperson confirmed to Money Control that, “We are always open to experimenting and piloting new ideas. We had tested the BaaS option about three-four years back and found that it was confusing customers. While physically the battery and the vehicle are not separated, financially the pricing model was separating them. It was not easy for customers to understand this and so we decided not to proceed with it then.” At present, the EV lineup from Tata Motors starts at Rs 7.99 lakh with the Tiago EV and goes up to Rs 21.99 lakh, ex-showroom for the Curvv EV.
My View
I believe BaaS is a great initiative by JSW MG Motor India which can be adopted and implemented across the industry. The Indian auto giant experienced a slight decline in sales recently in ICE and electric portfolios. Therefore, it is natural for them to look for new ways to spur demand. I feel BaaS could be just what they need. In fact, it is a program which could pull in the fence-sitters towards purchasing their first EVs. We shall have to keep an eye out for how things pan out in this regard.
Also Read: EVs Don’t Need Subsidies Anymore – Nitin Gadkari
