Tata Motors’ EV sales slump 23% in Feb, marking ninth monthly decline in FY25

New Delhi: Tata Motors Ltd.’s electric vehicle (EV) sales have been on a downhill slide so far this fiscal, with sales of nine out of 11 months settling below their FY24 numbers, accompanied by a significant drop in market share. While the country’s top EV maker blames the withdrawal of a government incentive for the slide, analysts point to rising competition weaning away buyers.

In February, the Mumbai-based company’s EV sales declined 23% from the year-ago period—from 6,923 units in February 2024 to 5,343 units last month. In FY25 so far (April 2024 to February 2025), Tata Motors’ EV sales have slid 12% year-on-year to 58,293 EVs in the domestic and international markets.

This decline in sales has hurt the company’s EV market share, falling from 62% in 2024 to 46% in December, according to a 31 December note from Goldman Sachs. Meanwhile, JSW MG Motor, whose market share was 22% in 2024, recorded a 41% market share in December, largely driven by the introduction of the Windsor EV last September.

Overall this fiscal, market share of the top three companies—Tata Motors, JSW MG Motor and Mahindra & Mahindra (M&M)—were 56%, 28% and 6.2%, respectively according to Vahan portal on 3 March.

The country saw nearly 100,000 electric car sales in 2024, up from 82,688 in the previous year. The electric passenger vehicle market is dominated mainly by these two companies. Mahindra and Mahindra is the third largest player, with a 7% share in 2024, followed by Chinese EV maker BYD at 3%.

Meanwhile, JSW MG Motor recorded 16.3% sales growth in February, selling 4,956 units. Of this, around 3,800 units were its EV models—Windsor, Comet, and ZS. MG Windsor crossed the production milestone of 15,000 units in February, five months after its launch.

The changing landscape has hit Tata Motors’ share value on the stock exchanges as well. Between 1 April 2024 and 28 February, the company’s share price declined by more than 37% on the NSE.

To be sure, Tata Motors launched its first electric car for personal buyers in October 2019. So far, it has sold over 200,000 electric vehicles in the country. Currently, it has the largest EV four-wheeler portfolio, which includes Curvv.ev, Nexon.ev, Punch.ev, Tigor.ev and Tiago.ev.

Tata blames incentive pullback

The company has attributed the weakening sales to the slowdown in growth of electric four-wheelers sold for commercial purposes owing to withdrawal of Fame-II subsidies in March 2024. Under the scheme, subsidies were given on the purchase of electric four wheelers used for commercial purposes like taxis.

“[It’s] largely because of the decline that we have seen in the fleet segment once the FAME II incentives fell off in Q4 last fiscal,” Dhiman Gupta, chief financial officer at Tata Passenger Electric Mobility Ltd, said in a post-earnings call on 29 January.

“Despite the very strong competition that we have seen in the last few quarters and the new launches from the competition, we have still been able to manage our market share at greater than 53% (in Q3FY25) because of the wide portfolio that we have maintained at different price points ranging from ₹8 lakh to ₹22 lakh,” Gupta added.

To offset this decline, Tata Motors started offering discounts on some models last month.

Analyst views

Analysts have observed the rising competition affecting Tata Motors in the electric four-wheeler market. In a note dated 31 December 2024, Chandramouli Muthiah, Kota Yuzawa, and Mrinal Maheshwar of Goldman Sachs highlighted the competition as a downside for the firm. “MG Windsor continues to capture share from Tata Motors’ EVs,” Goldman Sachs said.

Mumuksh Mandlesha, research analyst at Anand Rathi Institutional Equities, said that Tata Motors EV sales have come under pressure from JSW MG Motor’s new launches in the past year. “The firm’s new launches have not received the expected traction, which is why its EV passenger vehicle sales have declined as compared to last year. The new launches from JSW MG Motor have received good traction, so they are taking some market share away,” said Mandlesha.

To be sure, competition in the EV space is set to intensify with several products being lined up for launch by both old and new EV players. Already, last month, M&M reported over 30,000 bookings for two new electric SUVs—XEV 9e and BE 6—on the very first day.

Further, conventional passenger vehicle market leader Maruti Suzuki India Limited showcased its first EV—the eVitara—at the Bharat Mobility Show 2025 in Delhi in January. The second-biggest conventional car maker, Hyundai Motor India Limited, also launched Creta Electric at the same auto show.

The Tesla angle

Another looming threat to domestic EV players is the potential entry of Elon Musk’s Tesla into the country. In February, the company started hiring for Delhi and Mumbai locations after Prime Minister Narendra Modi met Musk in Washington.

In a note on 27 February 2025, Rishi Vora and Praveen Poreddy of Kotak Institutional Equities wrote that Indian firms would face a significant risk if the government allowed BYD to import vehicles under a revised EV policy to attract global EV players.

Under the scheme to promote electric vehicle manufacturing in India, EV makers could be allowed to import vehicles at 15% duty if they commit to setting up domestic manufacturing. Currently, EV four-wheeler imports attract a duty of around 100%. There were reports of the government easing the requirements further as the scheme did not attract significant interest.

“BYD can import vehicles for pricing as low as ₹10 lakh, which can impact all the OEMs, in our view,” Kotak Institutional Equities said in its February note. “While we believe this is an unlikely scenario, there will be a significant risk of multiple de-rating of the entire PV sector if the Indian government allows Chinese OEMs under this scheme.”