Price reduction for Nexon EV compensates for non-availability of subsidies and could also be advantageous in view of rivals like Mahindra XUV400
While there has been significant interest in electric cars, subsidies offered by central and state governments is a key factor that motivates people to make the switch. Central government subsidies for EVs are offered under FAME II scheme, whereas states have their own subsidy policies. Some states also offer other benefits for EVs such as zero registration fee and road tax.
When subsidy schemes were applicable for Tata Nexon EV, buyers were able to save around Rs 2-3 lakh. This is a significant amount and has played a key role in boosting sales of Nexon EV. It currently has a market share of more than 80%.
Nexon EV price cut
With Nexon EV no longer eligible for subsidies, on-road price has increased. This has resulted in a dip in sales. To boost sales, Tata Motors is now offering attractive discounts. In case of Nexon EV Prime, buyers can get discounts of up to Rs 90,000. Folks buying Nexon EV Max stand to gain with a discount of up to Rs 80,000.
These discounts are in addition to the earlier price cuts announced by Tata Motors. In January 2023, prices of Nexon EV Prime were slashed by up to Rs 50,000. For EV Max, the price cut was up to Rs 85,000. The price cuts were attributed to the gains made by the company via its participation in government’s Production Linked Incentives (PLI) scheme. This scheme incentivizes manufacturers of EVs and hydrogen fuel cell EV (FCEV). Tata had passed on the cost benefits to end users.
With the discount and price cuts, total cost benefit available with Nexon EV Prime is around Rs 1.4 lakh. In case of Nexon EV Max, buyers stand to gain from savings of up to Rs 1.65 lakh. This is around half of the savings that were available with FAME II and state subsidies.
Reduced pricing for Nexon EV can also be useful in tackling the threat from rival XUV400. The latter has larger dimensions, more power and torque and faster acceleration. Moreover, XUV400 bookings have already crossed 10,000 units. With reduced pricing, Nexon EV can emerge as a more value-for-money offering. Mahindra has registered over 15,000 bookings for new XUV400 EV.
No subsidy for Nexon EV
As per FAME II, subsidy for electric cars is Rs 10,000 per kWh. Max limit is capped at 20% of the overall cost of the EV. To be eligible, the EV needs to be offered at a price of less than Rs 15 lakh. While Nexon EV met this requirement earlier, it is no longer available within the Rs 15 lakh mark. So, FAME II subsidies do not apply.
In places like Maharashtra, state subsidies are also no longer applicable for Nexon EV. Earlier, the subsidy on EVs in Maharashtra was Rs 5,000 per kWh. Max limit was capped at Rs 1.50 lakh. Early bird incentives were also available to EV buyers if the vehicle was purchased before December 31, 2021. This was later extended to March 31, 2022. State subsidy allotments have already been exhausted, which means Nexon EV buyers won’t be getting this benefit.
Important – Discounts are only available for 2022 models (MY22). No discounts on the current year model (MY23).
