Murugappa Group's EV Arm Set to Launch 3 Electric Tractors in Current Fiscal Year

Tube Investments of India's electric vehicle arm, TI Clean Mobility (TICMPL), is set to disrupt the tractor segment with the launch of three electric tractors in the current fiscal year. Recognizing the favorable cost economics of battery-powered products, TICMPL aims to target what it refers to as "the productive end of the EV spectrum," focusing on three-wheelers, tractors, and medium to heavy commercial vehicles.

The company has already introduced a battery-powered passenger autorickshaw called 'Montra' in the southern regions, marking its entry into the electric three-wheeler segment. Now, TICMPL is placing a significant bet on e-tractors, citing similar cost economics to electric three-wheelers and the immense opportunity in the Indian market. Supportive government policies for farm mechanization and green energy programs have created a conducive environment for the adoption of electric tractors.

Diesel-powered tractors, which are prevalent in India, contribute to carbon emissions and air pollution. By introducing electric tractors, TICMPL aims to promote green farming practices that benefit both farmers and the environment. Electric tractors can significantly reduce carbon dioxide emissions, the primary cause of air pollution and climate change.

TICMPL's acquisition of Hyderabad-based Cellestial E-Mobility has empowered the company to design and manufacture e-tractors using a ground-up architecture. Leveraging their frugal engineering and application expertise, TICMPL plans to introduce three different variants of four-wheel drive e-tractors to cater to various user segments. The production facilities for these tractors are currently under construction at Apex Park in Chennai, Tamil Nadu, and the vehicles are scheduled for launch within this fiscal year, according to Mukesh Ahuja, Managing Director of TII.

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The upcoming e-tractor is being developed as a cost-effective, pollution-free, and low-maintenance product. It will be powered by swappable, rechargeable batteries that can be charged within two hours from a domestic power source, providing six hours of continuous operation before requiring a recharge.

Although electric tractors have higher purchase costs, a total cost of ownership (TCO) analysis conducted by the International Council on Clean Transportation reveals that the cost gap over ten years is minimal, even when considering electricity costs and opportunity costs at the upper end. This suggests that electric tractors can be highly cost-competitive if adequate incentives are provided. Factors such as the FAME II scheme, state-level incentives, a 5% GST rate, and discounted insurance can bridge the cost gap between electric and diesel tractors, potentially resulting in electric tractors being cheaper on a TCO basis.

While the estimated TCO of electric tractors was approximately ₹31.1 lakh over ten years, diesel tractors were marginally lower at less than ₹30.2 lakhs. Fuel costs constitute the major component for both types, followed by vehicle purchase and financing costs.

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It is important to note that the TCO estimate for electric tractors is conservative due to limited data availability and a lack of understanding regarding real-world tractor performance. However, with consistent incentives for EVs, the cost gap can be further minimized, enabling e-tractors to achieve cost parity with diesel models or even be more affordable in terms of TCO.

According to market estimates, the global electric tractor market was valued at over $120 million in 2021 and is projected to reach $300 million by 2030, exhibiting a compound annual growth rate (CAGR) of 13.1% between 2022 and 2030.

The launch of TICMPL's electric tractors signifies a significant step toward sustainable and eco-friendly agricultural practices in India. By embracing electric mobility solutions, farmers can not only reduce their carbon footprint but also potentially enjoy long-term cost savings. As the country continues to prioritize clean energy and sustainable farming, the electric tractor market is expected to witness substantial growth in the coming years.

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