Tata Motors is expanding into the premium electric SUV market with the Harrier.ev, targeting affluent buyers and aiming to boost margins. While competitively pricing its EVs and focusing on cost reduction, the company is also working to revive fleet sales by offering value propositions comparable to CNG vehicles.
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India's electric car market leader Tata Motors has opened a new front with its push into the premium electric SUV segment amid falling sales and stiff competition from MG Motor India and Mahindra & Mahindra. Besides introducing high-end models like the Harrier.ev and Sierra.ev, it will also improve the price-to-value of its EVs and revamp its fleet offerings to revive demand.
Tata Motors took the wraps off the Harrier.ev (65kw/hr battery) on Tuesday, prising open the premium end of the e-car market. Priced at ₹21.49 lakh, the electric version undercuts the pricing of rivals' and its own fossil fuel variant. Harrier diesel (automatic) is priced at ₹22.09 lakh to ₹30.55 lakh. Among other things, it comes with a lifetime warranty on the battery.
"We are entering the ₹20 lakh-plus segment with Harrier.ev - that should help us," Shailesh Chandra, MD, Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, told ET. "This is a white space in the market, and consumers looking to upgrade to larger EVs have very limited options," he noted. The size of this segment has now increased to anywhere between 22,000 to 25,000 units per month, he said.
It will be introducing the higher trim variants later in the year. Chandra said the company will sustain the competitive pricing as it has managed to bring down the production cost substantially over the years since it entered the EV market in 2020.
Tata's entry into the premium EV space is a strategic move to capture affluent buyers who may be looking beyond compact and mid-sized electric cars - a segment Tata has long dominated with models like the Nexon.ev and Punch.ev. "The premium SUV segment is critical because it brings higher realizations, better margins, and helps elevate brand perception," Chandra explained.
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Simultaneously, Tata Motors is reinforcing its hold on the mid and entry-level segments with product and pricing tweaks. However, one of its most urgent challenges lies in the commercial fleet space - historically a strong volume driver. The contribution from the segment is now down to 8 % to 10% compared to 15% a year ago.
The phase-out of the FAME II subsidy made EV economics less viable for operators, particularly in comparison to CNG, he noted.
"Our goal now is to build a value proposition for fleet buyers that is on par with CNG," Chandra said, noting that signs of recovery have emerged from new fleet customers in recent months. The steps come at a critical juncture. Tata Motors' EV sales in May 2025 dropped 18.7% year-on-year to 4,320 units, even as the broader electric passenger vehicle market grew 49.6% to 11,405 units, according to Vahan registration data. Its full year dispatches to dealers in 2024-25 declined 13% to 64276 units from the year ago period. Its market share dropped to 53% from 70% in the same period.
Despite maintaining its lead in total volume terms, Tata's market share has been on a steady slide as rivals launch new EV models across categories and aggressively scale operations.
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