MG Motor India intends to launch an affordable sub-Rs 15 lakh EV in the local market in the next financial year to challenge the dominance of homegrown car companies Tata Motors in the green mobility segment.

Rajiv Chaba, president and managing director of MG Motor India, told ET that the company will source batteries for the product locally to keep prices competitive. The company expects that with the use of this vehicle in the conventional market next year, electric vehicles will bring up to a quarter of sales.

“For India, if we want to democratize technology, we will need low-cost solutions. We will launch our second electric vehicle in the second quarter (April-June 2023). We expect to get good volumes,” Chaba said.

The car is likely to be priced between Rs 11 lakh and Rs 15 lakh. The company already has an offer ZS EVwhich is manufactured at a facility in Halol, Gujarat.

Tata Motors, the leader in the local electric car market with over 80% share, currently has three models – Tiago, Tigor and Nexon. They are priced between Rs 8.49 lakh and Rs 17.50 lakh (ex-showroom). The company is on track to end the current fiscal year with sales of around 50,000 electric vehicles. In total, Tata Motors plans to launch 10 electric vehicles over the next five years.

Csaba told MG Motor India is working to create an ecosystem for electric vehicles to accelerate the transition to clean mobility.

“In India, we need to ensure low cost of ownership from the consumer’s perspective. Also, in terms of supply, we have to see what combination (battery chemistry and charging solution) works best for the country,” he added.

The company is working with technology start-ups to innovate battery chemistry and charging solutions for the local market through the MG Development Program (MGDP), which could eventually be replicated across MG Motor’s UK division and emerging markets around the world.

So far, 180 startups including Koinearth, Electreefi, VoxomosRedbot Technologies and Mihup have been identified and led by MG and consortium members to explore and build applications in connected car technology, futuristic technology and CaaP (Car-as-a-Platform).

Overall, Czaba said demand for electric vehicles remains high. MG Motor India is working to increase production of the ZS EV to 500 units per month from 300-350 units now. Efforts are underway to increase production of the Hector SUV to 4,000 units per month by January 2023 from the current 2,000 units.

The company will end the calendar year with sales of 55,000-56,000 units and aims to double the volume next year.

“We’ve been hit by chip shortages in all four of our vehicle lines more than others. If not, we would have been able to sell more this year,” said Chaba. MG Motor India initially planned to sell 65,000-70,000 vehicles in CY 2022.