Tata Motors Passenger Vehicles Managing Director, Shailesh Chandra said the company is witnessing a clear shift in consumer behaviour towards electric vehicles as rising fuel prices, driven in part by the ongoing West Asia crisis, begin to influence demand patterns in the auto sector.
The company highlighted that recent fuel price increases have started altering customer preferences, with early signs of higher traction in EV bookings across segments.
Chandra in an interview with NDTV Profit has already observed a noticeable increase in electric vehicle bookings over the past two to three months, rising by around 2% to 2.5%. He said this reflects a growing sense of urgency among consumers to switch to cleaner and more economical mobility options amid rising fuel costs.
He noted that the recently launched Tiago EV has been positioned as an aggressively priced offering, comparable to the entry-level petrol variant on an ex-showroom basis and even cheaper on an on-road cost basis. This, he said, makes it a compelling proposition in the current macro environment where fuel prices remain volatile.
“We are already seeing EV urgency in customers. If fuel prices rise further, this shift will only accelerate,” he said.
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The company also launched the next-generation Tiago across internal combustion engine (ICE), CNG, and EV variants, with a major design and feature upgrade aimed at repositioning the hatchback in a segment increasingly overshadowed by SUVs.
On the broader industry outlook, the management said that while multiple fuel price hikes in petrol, diesel, and CNG have raised concerns, there has not yet been any material demand contraction.
He noted that the current slowdown in the industry is largely seasonal and not structural. However, he cautioned that sustained fuel inflation could eventually act as a tipping point, particularly in entry-level segments where price sensitivity is higher.
He added that past GST-related benefits provided a cushion to consumers, creating headroom that has so far absorbed fuel price shocks. For now, overall demand trends remain stable, with strong industry growth still visible in recent months.
Addressing the impact of the West Asia crisis, the MD said raw material and commodity costs have increased significantly over the past year. Even before the geopolitical escalation, commodity inflation was already running at 2–3%, which had not been fully passed on to consumers.
He said that after the onset of the crisis, input costs have risen further, taking cumulative raw material inflation to around 5–5.5% of revenue over the past 12 months.
The company has so far absorbed a portion of these costs through internal efficiency measures, but is now evaluating selective price increases to offset continued pressure.
Despite global uncertainties, the company confirmed that its long-term strategy remains unchanged. The management reiterated that cyclical disruptions do not alter its commitment to product investment and innovation.
The company continues to focus on a strong pipeline of new launches and product upgrades planned for the current financial year, aimed at maintaining momentum across segments.
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On government push for ethanol blending and flex-fuel adoption, the company said it is prepared to align with evolving policy directions.
The MD noted that while discussions around higher ethanol blends and flex-fuel vehicles are ongoing, execution will depend on ecosystem readiness, including oil marketing companies and infrastructure support.
He added that the company will be ready with flex-fuel technology by early next year, while emphasising the need for a coordinated roadmap between industry and policymakers.
The management said the company continues to benefit from strong product momentum, with multiple launches supporting growth. It also highlighted that recent GST-related tailwinds are still aiding demand.
However, the key risk factor remains inflationary pressure stemming from the West Asia crisis and its cascading impact on fuel prices, input costs, and overall consumer sentiment.
The MD concluded that while demand remains resilient for now, sustained inflation could eventually weigh on the broader auto industry, particularly in lower-priced vehicle segments.
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