Tata Motors' EV Demand Surges Ahead of Festive Season, Supply Struggles Continue
Tata Motors is expecting a strong festive season for its electric vehicle business as demand for EVs continues to rise. The company says customer interest is currently significantly higher than available supply, prompting it to increase production capacity ahead of the important festive buying period.
The company is also expecting electric vehicle sales to remain one of its key growth drivers during the current financial year.
According to Tata Motors Passenger Vehicles Managing Director Shailesh Chandra, demand for the company's electric vehicles has increased by around three to three-and-a-half times compared with February.
Despite more electric cars entering the Indian market, supply remains a major challenge. Tata Motors has therefore been working to increase production to keep up with customer demand.
The company recorded its highest-ever quarterly EV sales in the first quarter of FY27, crossing 34,000 units.
To address the supply shortage, Tata Motors has increased its EV production capacity from around 9,000 units to more than 15,000 units.
The company is also planning additional capacity expansion in the coming months. Tata Motors expects its EV sales to grow by more than 70% during FY27 and is targeting an EV market share of above 40%.
If demand remains strong during the festive season, improved production capacity could help the company deliver more vehicles to customers without significantly increasing waiting periods.
Rising costs could become a challengeStrong demand is not the only issue Tata Motors is dealing with. Rising commodity and raw material prices could put additional pressure on the company during the second quarter.
The company said commodity prices had an impact equivalent to around 4.5% of revenue during the first quarter.
Tata Motors' consolidated net profit also fell sharply to ₹775 crore in the quarter ended June 2026, compared with ₹3,924 crore in the same period a year earlier.
Rather than immediately passing the entire increase in costs to customers, the company plans to focus on controlling expenses and make price adjustments gradually when necessary.
Strong demand for the SierraThe Tata Sierra is also reportedly receiving strong customer interest. The introduction of its electric version has further increased attention around the model.
However, supply constraints involving castings and sheet-metal components have affected production. Tata Motors expects the situation to improve once additional capacity becomes operational in October.
Tata Motors plans to expand overseasThe company is also looking beyond the Indian market. Tata Motors has reported improving sales in South Africa and expects the momentum to continue.
Between April and July 2026, the company's exports reached 2,432 units, compared with 1,035 units during the same period last year.
Tata Motors is also planning to enter another major international market by the end of FY27 or during the early part of FY28.
EVs and CNG remain important growth areasTata Motors expects the passenger vehicle market to grow by around 15% to 20% during the second quarter of FY27. However, the company expects growth to moderate somewhat in the second half because the previous year's sales were relatively strong.
Electric vehicles and CNG models are expected to remain important parts of Tata Motors' growth strategy.
With EV demand already running ahead of supply, the upcoming festive season could become an important period for Tata Motors. Increased production capacity may allow the company to take advantage of the growing interest in electric cars.
If demand continues at the current pace and supply constraints ease, Tata Motors could see EVs play an even larger role in its passenger vehicle business during FY27.