Tata Motors is planning to separate showrooms for electric vehicles in cities where EV volumes have reached a certain level.

More than 49% of the sales of Tiago EVs are coming from other than the top 20 cities, according to Shailesh Chandra, managing director, of Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd.

"Therefore, we have taken that opportunity to really start expanding our network in those smaller cities through a shop-in-shop concept. And going forward, we also want to separate, ICE as well as the EV showrooms, as and when we see the volumes in certain cities, which go to a certain level where the separate channel becomes viable," Chandra says during Tata Motors' first-quarter earnings call.

"As we are expanding in these cities, we are also therefore building the service capability from an infra perspective as well as also training the service engineers for those service stations," he says.

This comes at a time when passenger vehicle EV wholesales in India touched nearly 27,000 for the first time in the June quarter.

"As far as EVs are concerned, in-line with the industry, we also more than doubled our volumes as compared to where we were in the same quarter last financial year, touching 19,000 plus," says Chandra.

EV adoption is now growing beyond the top 20 cities, says Chandra. "I think, the bias is now moving to other parts of the country, and that's a good sign in terms of how the EV sales will grow from here," he says.

"Going forward the bright spots that we see that there is a strong booking pipeline in the industry. The demand is held at a very high level," Chandra says.

Tata Motors expects several tailwinds for its EV business. The outlook of margins of EV is going to be very strong, says Chandra. The cell prices are recovering to the levels where it was in the first half and the impact should start from this quarter itself, he says.

"PLI is going to be a big addition to the margin, and we are confident that we are adhering to all the requirements for the eligibility as has been laid down by the Ministry. So that is going to be a big one," Chandra says.

"There's localisation that we have been working on for the last two years, and that is going to yield us significant benefits from a cost reduction perspective," Chandra explains.

Tata Motors on Monday joined hands with South Indian Bank to offer a financing programme exclusively for their passenger electric vehicle dealers.

As far as challenges are concerned, Chandra says that the last financial year was a high base, and therefore that impact is going to come in terms of growth rates. "We also know that last year the festive season was in September, October, which is now going to be October and November. So, therefore, there will be demand which will be more stronger in quarter three as compared to quarter two," he says.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.