Tata Motors may launch battery-as-a-service model

Tata Motors considers BaaS model, lowers prices by up to 30%

Tata Motors is reportedly considering introducing a battery-as-a-service (BaaS) model for part of its electric vehicle range. The move could be a game-changer in making electric vehicles more affordable for consumers, a move that could significantly reduce the cost of ownership and broaden the appeal of electric vehicles in the country.

Explore Battery Rental

Tata Motors is evaluating the possibility of offering BaaS options across its electric portfolio, including Tiago, Punch, Tigor, Nexon, Curvv and others. The potential benefit of this model is to separate the battery from the purchase cost of the vehicle, which could reduce the ex-showroom price by 25-30%. Consumers will then pay for the battery with a rental rate calculated per kilometer of use, providing them with an affordable entry point into EV ownership.

Although still in its preliminary stages, with plans reportedly being discussed internally, Tata Motors is expected to gauge consumer interest through a pilot program before launching a large-scale rollout.

BaaS model

The BaaS model is not new to the Indian market, with carmakers such as JSW MG Motor already offering this option in its Windsor EV and Comet EV range. The purchase price of these vehicles is much lower when the batteries are leased individually, providing consumers with a more affordable option while allowing them to spread battery-related costs over time. Industry experts say the possibility of Tata adopting this strategy could lower the price of its electric vehicles by Rs. 20,000-350,000 units, making them more competitive with traditional internal combustion engine vehicles.

Challenges and Opportunities

Tata Motors had tested a similar concept in the past but did not go ahead with the BaaS model at that time due to consumer confusion. The economics of separating the battery from the vehicle, rather than physically removing it, proved difficult for customers to understand. However, the company is revisiting the model given the increasing demand for more affordable EV options and growing trust in EVs.

Tata Motors has renewed its focus on BaaS as sales of electric vehicles decline. The company reported that sales of electric passenger vehicles fell 14% in the first quarter of fiscal 2025 and 16% in the second quarter. The figures reflect broader challenges facing India’s electric vehicle industry, including slowing consumer demand and the expiration of tax breaks and incentives in key markets.

The implementation of BaaS can help address these trends by making electric vehicles more economically accessible and consistent with consumer preferences for lower upfront costs. Additionally, this model provides potential buyers with additional assurance as the responsibility for battery maintenance and replacement remains with the manufacturer even if the vehicle changes hands.

Lowering barriers to electric vehicle adoption

Industry analysts say the introduction of BaaS can significantly accelerate the adoption of electric vehicles in India. By addressing one of the most important cost components – batteries – Tata Motors can help more consumers transition to electric vehicles. This approach could also alleviate concerns about battery life, a factor that often deters potential EV buyers due to concerns about performance degradation over time.

While Tata Motors has not confirmed any final decision, a company spokesperson noted that the automaker is open to trying new ideas and continues to explore options to make electric vehicles more attractive. As the company looks to retain its 75-80% market share in the Indian electric passenger vehicle segment, innovative pricing models such as BaaS may become an important tool to sustain growth and compete with new market entrants.

As the electric vehicle market grows, Tata Motors’ possible adoption of a battery-as-a-service model could prove to be a pivotal moment for the industry. By offering more affordable EV options through battery leasing, the company can not only cater to the price-sensitive Indian market but also address common concerns about battery life and performance. Whether this will be enough to reverse the current sales slump remains to be seen, but it certainly makes Tata Motors a forward-thinking player in the EV space.

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