Carmakers don’t need incentives to make money on hybrid: Tata Motors' PB Balaji

Tata Motors Group CFO P B Balaji believes that the government should not "waste its money" by offering incentives on hybrid cars, as everybody makes money on such vehicles.

As states like Delhi weigh road tax and registration fee waivers on hybrid cars, Balaji said, “If you are going to ask for incentives for hybrid, then why not CNG. It’s not that the companies don’t make money on hybrids. We have our own hybrid platform in JLR. There is money being made on that."

On the other hand, electric vehicles have a “funding gap” because the speed of adoption is slow, the Tata Motors group CFO said. EVs require a lot of ecosystem work in terms of charging infrastructure, localisation of suppliers (to meet domestic value addition norms to qualify for the PLI scheme), he said.

Balaji said Tata Motors can offer hybrid vehicles if customer demand increases. "Our only issue has been incentivising hybrids. This is not a destination technology; it is an intermediate transition technology. It is being used to manage CAFE norms," said Balaji. “If and when the customer believes that hybrid is a relevant technology that we need to supply, we are more than happy to supply,” he said.

India’s biggest electric carmaker is not pressing any panic buttons amid China’s restrictions on rare-earth magnet exports. “At this point, we are okay as far as rare earth magnets are concerned. There are no panic buttons pressed as yet because the supplies are coming through but we will have to see how that plays out,” Balaji told reporters.

The automaker is not planning any production curtailment due to the rare earth magnet crisis. “We don’t have any stress on the supply chain,” Balaji said, adding that the company has enough stock of magnets due to existing inventory and some sourcing from alternate countries. “But if it continues forever, then of course it is a different issue to deal with,” Balaji cautioned.

Shailesh Chandra, managing director of Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd, said the carmaker is “comfortable” for the next few months as far as rare earth magnets are concerned. “Different OEMs have different situations,” he added.

Chandra, who is also the president of the Society of Indian Automobile Manufacturers (SIAM), said Indian automakers are dependent on inventories of rare earth magnets in the short term. “There is an ongoing discussion in SIAM and ACMA (Automotive Component Manufacturers Association). Both are taking it up with the ministry of commerce. In the short term, sorting out the issue is the only solution. In the mid- to long-term, there are multiple solutions. We are working with the government on being more self-sufficient. In the mid-term, we will have to look at some alternate countries,” Chandra said.