Tata Motors eyes CNG as key growth driver, brings flex fuel to focus while expanding EV lineup

Tata Motors believes that as the CBG network expands across India, it presents a significant growth opportunity for CNG in the future. Additionally, t
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Tata Motor
In 2024 approximately 20 per cent of Tata Motors' total passenger vehicle sales were attributed to CNG models
Tata Motor
In 2024 approximately 20 per cent of Tata Motors' total passenger vehicle sales were attributed to CNG models

Indian vehicle maker, Tata Motors remains optimistic about the prospects of CNG in the passenger vehicle segment. In a recent press conference, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, expressed that the company believes that CNG models will be a major driver for the carmaker. The carmaker currently offers four of its key models with CNG powertrain including the Tata Punch, Nexon, Tiago, Tigor and Altroz.

In 2024, approximately 20 per cent of the company's total passenger vehicle sales were attributed to CNG models. Chandra highlighted the growing demand for CNG as a fuel option across India. However, he noted that limited infrastructure is a constraint, stating, “We are still scratching the surface of India’s overall demand because CNG is currently concentrated in certain pockets."

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Chandra highlighted that the states like Delhi NCR, Gujarat and Maharashtra are witnessing the fastest growth when it comes to CNG, however there are several regions in the eastern and the southern side of the country where CNG as a technology is still to be exploited. He noted that as the Compressed Bio Gas (CBG) network expands across India, it presents a significant growth opportunity for CNG in the future.

Also Read : Tata Motors banks on local battery manufacturing amid rising EV competition

Tata Motor’s multi pronged approach for sustainable future

A recent report by Phillip Capital stated that electric vehicles (EVs), Flex-fuel models, and CNG-powered vehicles are taking center stage in the Indian automotive industry. The report highlighted that these alternative fuel vehicles are rapidly reshaping both passenger and two-wheeler segments, signalling a major shift in consumer and industry preferences.

While Tata Motors has been witnessing growth in the CNG space, the carmaker currently leads the passenger electric vehicle market with over 60 per cent of market share. Being one of the first movers in the electric passenger vehicle space, Tata Motors currently has the largest EV portfolio as compared to any other player in the passenger vehicle segment.

Tata Punch Flex Fuel
A Tata Punch Flex Fuel prototype on display at the 2025 Auto Expo
Tata Punch Flex Fuel
A Tata Punch Flex Fuel prototype on display at the 2025 Auto Expo

Interestingly, while Tata Motors continues its efforts to maintain lead in the EV segment, the carmaker is also eyeing Flex Fuel as another key driver for its growth. During the Auto Expo 2025, Tata Punch Flex Fuel, which is expected to be the first flex fuel vehicle from Tata Motors, was showcased. Although the launch timeline for the Punch Flex Fuel has not been disclosed, Chandra confirmed that the flex fuel program is actively progressing and remains a high-priority initiative for the carmaker.

Also Read : Hyundai Creta to Tata Punch: All flex-fuel cars at Auto Expo 2025

He expressed that while electric vehicles are addressing the issue of pollution and climate change, flex fuel will address the issue of energy security. The company views CNG, EVs, and flex fuel as crucial options for the future. “We believe flex fuel will play a key role," Chandra emphasised.

Can 2025 be a year of EVs?

While EVs have been gaining favour from regulators worldwide, from a consumer's perspective there’s still a lot to do. In fact, the majority of the nations across the world reported a drop in EV sales in 2024. In India meanwhile, the growth rate for EVs stood at 18 per cent, much lower than what it was a year or two ago.

However, Chandra believes that 2025 should see a good amount of boost in EV sales. While India aimed for 30 per cent EV penetration by 2030, he believes a more realistic target would be 15-20 per cent. The MD pointed out that to reach 30 per cent by 2030, EV sales should already be significantly higher than they are today.

Also Read : Tata Motors says making EVs become cheaper as battery prices fall

Chandra explained that one of the big factors behind the potential growth for EVs in 2025 is that the negative commentary is significantly down. Meanwhile, there are many players now getting into the electric vehicle space which gives a lot of confidence to the consumers in the technology itself. “This brings a major shift in the mental comfort of customers, which was lacking, and that's why I believe that, if everything goes right, EVs should see 2-3X growth," Chandra stated.

Tata Harrier EV and Sierra EV
Upcoming electric vehicles from Tata Motors like the Harrier EV and Sierra EV will be based on its updated ACTI.EV plus architecture.
Tata Harrier EV and Sierra EV
Upcoming electric vehicles from Tata Motors like the Harrier EV and Sierra EV will be based on its updated ACTI.EV plus architecture.

While the confidence is there, Chandra also cautioned that if the growth does not happen, it might be an issue for every stakeholder. He explained that most of the users currently are using their EVs as the second or even the third car in the family. A lot of the mainstream buyers currently are hesitating to go for an EV for three major reasons - attachment to certain brands, lack of charging infrastructure and uncertainty about the resale value.

The MD expressed that whether the new set of launches is going to unleash the full potential and make customers cross the hump on those aspects is going to be key and the next two quarters will be crucial for the passenger electric vehicle market.

The company believes that going forward, EVs in the passenger vehicle space will be categorised into two broad categories - City EVs and Versatile EVs. City EVs are the ones which will get an actual range of 300 km and will be used for daily city commutes while versatile EVs will be the ones with an actual range of over 500 km and will be used for multiple purposes including daily use and intercity travels.

Chandra highlighted that competition in the electric passenger vehicle space is intensifying in the versatile EV space or the 18 lakh plus segment. However, there is hardly any focus on the city EVs, which many of the mainstream buyers are actually willing to buy. “Therefore it is imperative, for the benefit of all players, that the market expands if it does not. That's why I said that I wish EVs would grow by three times, otherwise it will be a trouble for everyone," he expressed.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.

First Published Date: 29 Jan 2025, 11:51 AM IST
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