Tata Motors Bets Big on CNG & Flex-Fuel While Expanding EV Lineup

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Tata Motors, an Indian automotive manufacturer, maintains a positive outlook regarding the future of CNG in the passenger vehicle market. During a recent press conference, Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, conveyed the company's belief that CNG models will significantly contribute to its growth. Currently, Tata Motors offers four prominent models equipped with CNG powertrains: the Tata Punch, Nexon, Tiago, Tigor, and Altroz.

In 2024, CNG models accounted for approximately 20 per cent of the company's total passenger vehicle sales. Chandra emphasized the increasing demand for CNG as a fuel option throughout India. However, he pointed out that the limited infrastructure poses a challenge, remarking, “We are still scratching the surface of India’s overall demand because CNG is currently concentrated in certain pockets."

Chandra noted that regions such as Delhi NCR, Gujarat, and Maharashtra are experiencing the most rapid growth in CNG adoption. Conversely, many areas in the eastern and southern parts of the country have yet to fully utilize CNG technology. He also mentioned that the expansion of the Compressed Bio Gas (CBG) network across India offers a substantial opportunity for the future growth of CNG.

Tata Motor’s multi-pronged approach for sustainable future

A recent analysis by Phillip Capital has indicated that electric vehicles (EVs), flex-fuel models, and CNG-powered vehicles are becoming increasingly prominent in the Indian automotive sector. The report emphasized that these alternative fuel vehicles are swiftly transforming both the passenger and two-wheeler markets, indicating a significant change in consumer and industry preferences.

Tata Motors has experienced growth in the CNG sector, and it currently dominates the passenger electric vehicle market, holding over 60 per cent of the market share. As one of the pioneers in the electric passenger vehicle arena, Tata Motors boasts the most extensive EV portfolio compared to any other competitor in the passenger vehicle segment.

A Tata Punch Flex Fuel prototype on display at the 2025 Auto Expo — A prototype of the Tata Punch Flex Fuel was exhibited at the 2025 Auto Expo. Notably, while Tata Motors is focused on maintaining its leadership in the electric vehicle sector, the company is also considering Flex Fuel as a significant avenue for future growth. The Tata Punch Flex Fuel, anticipated to be the first flex fuel vehicle from Tata Motors, was presented at the event. Although the specific launch date for the Punch Flex Fuel has yet to be revealed, Chandra confirmed that the Flex Fuel initiative is actively advancing and is a top priority for the company.

He noted that while electric vehicles are pivotal in combating pollution and climate change, flex-fuel is essential for enhancing energy security. The company regards CNG, electric vehicles, and flex-fuel as vital components for the future. "We believe flex fuel will play a key role," Chandra stated.

Can 2025 be a year of EVs?

Electric vehicles (EVs) have been increasingly supported by regulators globally; however, from the consumer standpoint, considerable progress remains necessary. Notably, many countries reported a decline in EV sales in 2024. In India, the growth rate for EVs was recorded at 18 per cent, a significant decrease compared to previous years.

Chandra anticipates that 2025 will witness a substantial increase in EV sales. Although India has set a target of achieving 30 per cent EV penetration by 2030, he suggests that a more attainable goal would be between 15 and 20 per cent. The Managing Director emphasized that to achieve the 30 per cent target by 2030, current EV sales must be considerably higher than their present levels.

Chandra noted that a key factor contributing to the expected growth of EVs in 2025 is the reduction in negative perceptions surrounding them. Additionally, the influx of new entrants into the electric vehicle market is instilling greater confidence among consumers regarding the technology. “This shift significantly enhances the mental comfort of customers, which has been previously lacking, and I believe that, if conditions are favourable, EVs could experience a growth of 2 to 3 times,” Chandra remarked.

Tata Motors is set to launch new electric vehicles, including the Harrier EV and Sierra EV, which will utilize the enhanced ACTI.EV plus architecture. While there is optimism regarding these developments, Chandra has warned that a lack of growth could pose challenges for all stakeholders involved. He noted that many current electric vehicle users consider their EVs as secondary or tertiary vehicles within their households. Mainstream consumers are currently hesitant to adopt electric vehicles due to three primary concerns: loyalty to established brands, insufficient charging infrastructure, and uncertainty regarding resale values.

The Managing Director emphasized that the success of these upcoming launches in addressing these concerns will be critical, with the next two quarters being pivotal for the passenger electric vehicle sector.

The company anticipates that future electric vehicles in the passenger segment will be divided into two main categories: City EVs and Versatile EVs. City EVs are expected to offer a practical range of 300 km, suitable for daily urban commuting, while Versatile EVs will provide a range exceeding 500 km, accommodating various uses, including daily travel and intercity journeys.

Chandra pointed out that competition is escalating in the versatile EV market, particularly in the segment priced above ₹18 lakh. However, there remains a notable lack of emphasis on City EVs, which many mainstream consumers are inclined to purchase. He stressed the importance of market expansion for the benefit of all stakeholders, stating, "The market needs to grow; otherwise, it will create difficulties for everyone."

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