The Nexon was planned as Tata Motors' in-between car. Now it's driving the automaker's resurgence

Packed with features and the highest safety standards, the ICE and electric variants of the Nexon have been gamechangers, making Tata Motors India's third-largest automaker

By Manu Balachandran Forbes India Staff

Published: Sep 13, 2023 03:23:43 PM IST

Updated: Nov 17, 2023 04:20:22 PM IST

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Tata launched the Nexon EV Max boasting an ARAI range of 437 km, almost 120 km more than the electric Nexon currently on sale.

In the beginning, it was intended to be a bridge product, a relatively short-lived wonder, that could raise eyebrows and bring customers to the showrooms when the chips were down.

Back then, the Mumbai-headquartered Tata Motors was undergoing a transition, lining up new vehicles under its new platform architecture to win back private car owners who had deserted the automaker after many years as a fleet operator, amidst dwindling market share. Two new platforms, upon which the company’s popular Altroz and Harrier were later built, were still in the works, which meant the bridge product had to be based on the old and new architecture.

“There was a period when we had to bring bridge products to bring excitement among personal consumers, and the backbone of that became impact design and safety,” Shailesh Chandra, the president of Tata Motors Passenger vehicles, had told Forbes India earlier.

Thus was born the Tata Nexon, the popular crossover SUV, that has since built up a steely reputation for its safety features, affordability, road presence, and performance. When introduced, the Nexon became the country’s first made-in-India, sold-in-India model to register a five-star rating from Global NCAP. Since then, the vehicle, offered in as many as 69 variants, has sold over 500,000 units, helped largely by a robust supply chain.

“The bridge products were the Tiago, Tigor, and Nexon of which the Nexon was in-between the old and new architecture, and that helped us come back strongly. But even that was only to a limited extent,” Chandra adds. The Nexon, with its unique crossover design, albeit a polarising one, was unlike any vehicle from the automaker before, known for iconic models such as Indica, Safari, and Sumo, among others.

“What sets this product apart is its remarkable synthesis of innovation, design, and performance, a testament to Tata Motors' commitment to excellence,” says Harshvardhan Sharma, head of auto retail practice at Nomura Research Institute. “The Nexon serves as a testament to Tata Motors' adaptability and success in a dynamic market, and the future looks promising as it continues to lead the way."

Today, six years since the Nexon took shape, the model has taken centre stage among the Tata Motors portfolio and is busy rewriting the rules of the country’s automotive arena. In all, Tata Motors sells over 12,000 Nexons a month, a number which crosses 15,000 if the electric variant is also considered.

The electric version of the vehicle is the country’s best-selling electric vehicle (EV), clocking sales of over 3,000 units a month, while the Nexon itself is the highest-selling model from the Tata Group until August this year, when the Punch took over that spot. Much of that drop is also in anticipation of a new variant that the group is planning to launch this month.

Also read: The Tata Group has built an electric vehicle universe. Can it help its global ambitions?

A refreshed facelift model has been in the works for long and on September 14, at an event in New Delhi, Tata Motors will pull the cover off the facelifted version of Nexon, and its equally admired electric sibling, the Nexon EV. The sub-compact crossover SUV will now boast a slew of changes to its exteriors and interiors, all aimed at helping Tata Motors continue its phenomenal run in the domestic automobile market. Among others, the new Nexon will have a redesigned front and rear, and features such as a 10.25-inch touchscreen, and a two-spoke steering wheel. The car will also feature a 360-degree camera, telematics, wireless charger, ventilated front seats, air purifier, and electronic gear shifter.

"The Tata Nexon has emerged as a game-changer for Tata Motors, and its significance in the company's resurgence cannot be overstated,” adds Sharma of Nomura. “Initially conceived as a bridge product during Tata's transition phase, the Nexon has defied expectations and become a driving force in the company's climb to the top.”

The new Nexon is expected to start retailing at less than Rs 8 lakh, although a now-deleted Instagram post from Tata Motors had claimed that the pricing will start at Rs 7.39 lakh for the combustion fuel variant. The Nexon’s rivals in the domestic market include the Hyundai Venue, Maruti Suzuki Brezza, and the Kia Sonet.

The new Nexon EV meanwhile could be priced at Rs 15 lakh and currently doesn’t boast many rivals, with the automaker controlling as much as almost 80 percent of the four-wheeler EV market. “The new Nexon is a major upgrade on design, innovation, technology, safety, comfort, and performance,” Tata Motors said after clarifying its gaffe on pricing.

Also read: Is The New Nexon EV Max The Game Changer That Tata Motors Needs To Fuel India's EV Transformation?

The Nexon Era

The Nexon was launched in 2017 at Rs 5.85 lakh with the top-spec diesel variant costing Rs 9.45 lakh, and the top-end petrol costing Rs 8.6 lakh. Among others, the Nexon offered customers features such as dual front airbags for the base variants, multiple drive modes, and an 8-speaker, 6.5-inch touchscreen Harman infotainment system. By 2018, the model had swung well past the Ford EcoSport, its nearest rival in sales with over 52,500 units annually. By 2018, the model contributed to as much as 50 percent of the company’s utility vehicle sales.

By late 2019, Tata Motors brought about some cosmetic changes to the model, including the front fascia and the instrument cluster, even as the automaker launched an electric version of the car. The EV, launched at Rs 13.99 lakh featured a motor that produced 129 PS power with 245 Nm torque and a certified driving range of 312 km.

“The Nexon has truly changed the fortunes of Tata Motors, especially with its aggressive styling and features and it was a game-changer for the automaker,” Puneet Gupta, the director for automotive forecasting at S&P Mobility says. “Somehow it managed to understand the pulse of the customer and with the electric variant, we are looking at a product that can go very deep into the future.”

Also read: Not just cars, Tata Motors wants to change the way its trucks and buses move too

Today, helped by Nexon’s electric variant, Tata Motors has emerged as India’s largest EV player. The Nexon EV’s phenomenal success has also prompted the automaker to launch other electric variants of its vehicles including the Tiago. Of course, EVs are in their infancy in India, and lag markets like China and the US, as domestic sales pale in comparison to what carmakers sell on the internal combustion engine (ICE) platforms. The EV sector penetration in the country currently stands at around 1 percent and that’s particularly why Tata, with its first-mover advantage, is only likely to benefit once the transformation gathers pace, pushed by private and public investments in the sector.

Last year, Tata also launched the Nexon EV Max boasting an ARAI range of 437 km, almost 120 km more than the electric Nexon currently on sale. The new electric variants meanwhile boast additional features like vehicle-to-vehicle (V2V) charging, paddle shifters for regenerative braking, a 12.3-inch touchscreen infotainment system, an electronic parking brake, and a digital instrument cluster, among others.

The new Nexon EV comes with two battery pack options, a long-range 40.5-kWh battery which has an ARAI-certified range of 465 km, 12 km more than the older version. The medium-range 30 kWh battery pack offers a range of 325 km.

“We did a survey, and it came out that the minimum range that a customer is looking for to avoid range anxiety is 200 km,” Shailesh Chandra, president of Tata Motors passenger vehicles, told Forbes India in November 2021. “That means a certified range has to go above 300 km or so. At the same time, the customer is not willing to give more than 25 percent premium over ICE vehicles.”

All that has meant that Tata Motors, which has seen its market capitalisation surge nearly 10 times between April 2020 and September 2023 is charting a new story for itself, across both electric and ICE segments, led by the likes of Nexon. With a renewed product portfolio, cost optimisation, better distribution network, affordability, and a host of features alongside impeccable safety offerings, the automaker has once again caught the fancy of private car buyers, propelling it to India’s third-largest carmaker, almost neck-and-neck with South Korean behemoth, Hyundai Motors.

In the process, Tata Passenger Electric Mobility, an arm set up to focus on the electric business has attracted funds from TPG Rise Climate, at a valuation of $9.1 billion. Tatas now aims to invest $2 billion by 2026 to launch 10 new EVs including the Curvv, Harrier EV, Sierra EV, and the Avinya.

There is merit in that gamble too. Over the past few months, everyone from General Motors to Ford Motor Company, Volkswagen, and Honda have been making commitments to shift their entire fleet to EVs over the next few decades. General Motors now plans to sell only those vehicles that have zero tailpipe emissions by 2035, while Japanese automaker Honda made it clear that the company intends to only sell EVs and fuel cell vehicles by 2040. In Europe, American automaker Ford said it will only be offering electric cars from 2030.

By 2025, Volkswagen wants to build and sell up to 3 million all-electric cars per year with over 50 purely electric-powered variants. All this follows the massive success story of Tesla, which has gone on to join the coveted trillion-dollar club after it announced a plan to sell 100,000 vehicles to Hertz, indicating a massive shift underway from a demand perspective too.

In the transition journey into electric, Tata is also banking on an ecosystem that will see the Tata Group build everything from batteries to charging stations to financing vehicles and finally putting them on the road. That’s a proposition no other automaker in India can currently counter. That project, known as Tata UniEVerse, is an ecosystem that will leverage group synergies, from companies such as Tata Power, Tata Chemicals, Tata Autocomp, Tata Consultancy Services (TCS), Tata Digital, Tata Elxsi and Tata Motors Finance.

“The Indian market story might be slightly different,” Chandra had told Forbes India. “Today, the Indian passenger vehicle market would be 3.5 million units a year. If you fast forward to 2030, this will grow by double to nearly seven million. If you take a 30 percent penetration, it will mean two million EVs. There is an opportunity on the EV side to grow from zero to 2 million.” The rest of the 7 million, Chandra reckons, will be ICE vehicles. “So, there is a growth opportunity in both these spaces,” Chandra says. “ICE vehicles will become more emission-friendly.”

Nexon has given Tata Motors that strong pedestal for both its ICE and electric journey with a story for times to come. The question now is, how long will the reign continue?