Tata Motors Wins India Contract to Supply 10,000 Electric Cars

(Bloomberg) -- Tata Motors Ltd. won an India government order for 10,000 electric cars as the country makes efforts to reduce emissions and curb fuel imports.

The maker of high-end Jaguar and Land Rover models and the Nano small car will initially supply 500 vehicles to government-backed Energy Efficiency Services Ltd. in November, with the remaining 9,500 autos to be delivered in a second phase, according to a statement by the Press Information Bureau.

Tata Motors, Mahindra & Mahindra Ltd. and Nissan Motor Co. participated in the tender, termed by EESL as the world's largest single electric-vehicle procurement, according to the statement. The car will be provided to EESL for 1.12 million rupees ($17,200) apiece, including tax and a five-year warranty. EESL will also seek bids for a fleet manager.

EESL, which offers consulting and financing for energy-reduction projects, is a joint venture between India's Ministry of Power and state-backed companies in the power industry such as NTPC Ltd., Rural Electrification Corp., Power Grid Corp. of India Ltd. and Power Finance Corp., as well as the Bureau of Energy Efficiency.

The electric cars will replace petrol and diesel vehicles used by the federal government and its agencies over a period of three to four years. Those entities operate a fleet of about 500,000 vehicles.

Prime Minister Narendra Modi has asked senior ministers to lead an initiative to ensure that by 2030 almost all vehicles in India are powered by electricity as a way to curb oil imports and reduce air pollution. The country's carmakers, including Mumbai-based Tata Motors and New Delhi-based Maruti Suzuki India Ltd., are considering making electric vehicles for the $30 billion auto market.

Sales of zero-emission models will account for 53.3 percent of total deliveries in India by 2040, although making batteries and building charging stations will be challenging, according to the official Niti Aayog think tank.

--With assistance from Anindya Upadhyay

To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net.

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Tom Lavell, Ashutosh Joshi