Tata Motors, India’s leading electric vehicle manufacturer, has embarked on a new initiative to collaborate with used car marketplaces, aiming to enhance the resale and exchange options for electric vehicle (EV) owners. A spokesperson from the company shared with Business Standard that they are currently exploring opportunities to streamline the resale process for EV owners seeking to upgrade to newer models.
Although the initiative is still in its early phases, it is being tested on a limited scale in partnership with online used car platforms. As of now, Tata Motors boasts the largest electric vehicle fleet in the country, with an estimated 170,000 units on the road. In their pilot program, they have begun collaborating with the used car marketplace Spinny. While both Tata Motors and Spinny refrained from providing detailed comments, listings of used Tata Nexon models can already be found on the platform.
For instance, a 2021 Tata Nexon EV XZ Plus is currently listed for sale in Mumbai at a price of Rs 11.61 lakh. In contrast, new Tata Nexon EVs range from Rs 12.49 lakh to Rs 16.49 lakh. Dealer sources indicate that the depreciation of electric vehicles generally aligns with that of internal combustion engine (ICE) vehicles, typically seeing a reduction of about 25% in the first year. Subsequent depreciation rates depend on factors such as mileage and battery condition.
A spokesperson from Tata Motors mentioned that the used EV market is expected to reflect trends in the new EV market, albeit with a delay of three to four years. This prediction is based on the assumption that early adopters will eventually seek to upgrade to more advanced models with longer ranges. The first significant wave of upgrades is anticipated within the next 12 to 24 months, particularly from vehicles sold in 2021 and 2022.
Dealers based in Mumbai have noted an increase in customers interested in trading in their Tiago or Nexon EVs for newer Tata electric models. One dealer, situated in the eastern suburbs of Mumbai, expressed optimism about the potential benefits of a partnership between Tata Motors and used EV marketplaces, citing the challenges posed by inconsistent pricing standards in this segment.
According to an executive from a used car marketplace, one of the key advantages of purchasing a used EV through such platforms is the inclusion of a warranty. “More consumers who are cost-conscious are now considering used EVs, as these come with battery warranties lasting between 8 to 10 years. These batteries can often exceed their warranty lifespan, depending on their charging cycles.
Typically, an EV might handle 2,000 to 3,000 charging cycles over its lifetime. For example, if a vehicle is charged once a week, it would accumulate around 52 charges a year, meaning a three to four-year-old EV might have only been charged about 200 times,” explained the executive.
They further noted that if necessary, the battery cells could be replaced, allowing the vehicle to function optimally. A significant barrier to EV adoption remains the high initial purchase cost, and the executive believes that the availability of used EVs could address this issue effectively.
The Tata Motors spokesperson reiterated that the market for used EVs presents a compelling value proposition for those looking to experience a more affordable electric vehicle option. This strategy allows consumers to gain insights into the benefits of EVs before committing to a new purchase. “Customers who are budget-conscious and have high usage needs will likely opt for used EVs due to their lower operational costs and the security offered by residual warranties,” they added.
Additionally, Tata Motors is actively pursuing pricing parity between its electric and ICE vehicles. Earlier in September, Vivek Srivatsa, the chief commercial officer of Tata Passenger Electric Mobility, emphasized that the company’s primary objective at Tata.ev is to integrate EVs into mainstream markets by eliminating barriers and enhancing accessibility for everyday car buyers.
He highlighted the importance of special promotional pricing initiatives aimed at reducing the high initial acquisition costs associated with electric vehicles, bringing their prices more in line with those of comparable petrol and diesel models. The fiscal year 2025 has posed challenges for the company’s electric vehicle sales.
During the first quarter, while the overall wholesales for Tata Motors’ passenger vehicles saw a slight decline of 1.1%, the sales of electric vehicles dropped significantly by 13.9%, largely attributed to a downturn in the fleet segment.
Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, noted that the EV market had been impacted by broader industry trends and the earlier-than-expected increase in fleet sales during the previous quarter due to the impending expiration of the FAME II subsidy in March 2024. While retail sales in the personal segment have seen minor growth, a notable decrease in fleet segment sales has been observed, which is expected to recover in the coming months.
In response to consumer needs, the company has also initiated bundled offerings in collaboration with Tata Power, which include options for EVs paired with solar rooftop installations, effectively ensuring zero running costs for buyers. A Tata Motors spokesperson remarked that the growing trend of solar rooftop panel installations will further enhance the appeal of owning an electric vehicle.
Other automotive manufacturers, such as Maruti Suzuki, are also preparing to enter the EV market, planning to offer a comprehensive ecosystem for their customers. Partho Banerjee, senior executive officer of marketing and sales at Maruti Suzuki India, recently stated, “We have conducted some preliminary research.”
Banerjee added, “Our approach will not be solely product-focused; we aim to provide an entire ecosystem for customers joining the EV community. The primary concerns we are addressing include range anxiety, the availability of charging infrastructure, and the residual value of EVs after five years of ownership. There is still uncertainty regarding the future residual value of electric vehicles.”
Premium automotive brands like Mercedes-Benz have begun offering guaranteed residual values to their EV customers, with their newly launched EQS SUV expected to retain a 60% residual value after three years, assuming a mileage of 45,000 kilometers.
Tata Motors is a leading global automobile manufacturer based in India, renowned for its diverse portfolio of vehicles, including passenger cars, trucks, and electric vehicles. Part of the Tata Group, the company focuses on innovation, sustainability, and customer satisfaction. With a strong commitment to electrification and advanced technology, Tata Motors aims to reshape the future of mobility.
