Tata Motors advances hydrogen truck trials, weighs further CV price hikes as demand stays strong

Tata Motors is stepping up its hydrogen truck trials as it evaluates the technology's potential for wider commercial deployment, with pilot projects underway across three routes to generate real-world operating data. The commercial vehicle maker is pursuing a technology-agnostic approach to decarbonisation, even as strong fleet replacement demand supports its core business and persistent commodity inflation weighs on profitability.

Tata Motors is keeping multiple powertrain options, including CNG, LNG, electric, hydrogen and biofuels, in play as it evaluates technologies for different commercial vehicle applications.

Girish Wagh, executive director, Tata Motors, said, “The pilots are intended to generate operating data before the technology can be considered for wider commercial deployment.” The hydrogen programme is being undertaken under the government's hydrogen mission, with Indian Oil Corporation generating green hydrogen for the trials.

Hydrogen trials to determine wider commercial potential

The three-route pilots will allow Tata Motors to assess how hydrogen-powered trucks perform under actual operating conditions before determining where the technology could make commercial sense. The company is evaluating hydrogen alongside battery-electric vehicles as part of its broader alternative-powertrain strategy, particularly for applications that could benefit from longer range and heavier-duty operations.

The company is also seeing stronger interest in electric commercial vehicles as higher diesel and CNG prices improve their total-cost-of-ownership economics. Tata Motors has received increased enquiries from fleet operators seeking to electrify their fleets, while demand for smaller electric commercial vehicles is spreading beyond metros into tier-II and tier-III towns.

Fleet replacement supports CV demand

Tata Motors is witnessing genuine replacement demand for heavy commercial vehicles, with large fleet operators replacing ageing trucks to improve fuel economy, lower maintenance costs and achieve better total cost of ownership. Infrastructure and mining activity are supporting HCV demand, while e-commerce, FMCG and courier and parcel businesses are driving demand for intermediate and light commercial vehicles.

The company is also tracking retail registrations through the Vahan platform alongside wholesale volumes to ensure growth is not being driven by inventory accumulation at dealerships. Total CV volumes rose 26% year-on-year to 1,08,658 units in Q1 FY27, while exports increased 35%.

Commodity inflation weighs on margins

The demand momentum is being accompanied by rising input costs. Tata Motors has already implemented a 2% price increase during Q1 and another 2.5% hike from July 1. Commodity inflation had an adverse impact of around 3.8% on the business during the quarter.

“Commodity inflation does remain a major headwind. We do see some more increase,” Wagh said, indicating the possibility of further price hikes. On margins, he added, “The margin growth will not happen only from volume growth. It will be a play of all these three variables,” referring to commodity prices, the absorption of recent price increases and volume growth.

Tata Motors expects electric commercial vehicle penetration to improve particularly in the second half of FY27, while battery-cell supply constraints are expected to ease towards the end of Q2. “The increase in conventional fuel prices has reduced the time taken for electric vehicles to reach total-cost-of-ownership parity with diesel and CNG vehicles,” Wagh said.

Tata Motors reported an 83% year-on-year increase in consolidated net profit to ₹2,560 crore in Q1 FY27, while consolidated revenue rose 19.3% to ₹20,667 crore, with profit also benefiting from a mark-to-market gain on its Tata Capital investment.