Tata Curvv EV bookings to open on August 12; can it give Tata Motors shares a lift?

Tata Motors Ltd is all set to open bookings for Tata Curvv EV on August 12 and if one were to go by Nomura India, this EV launch is significant, as the model’s booking ratio of EVs to ICE may help understand Indian customer’s propensity to buy EVs. 

Tata Curvv EV would be the fifth EV offering from Tata Motors after the Tiago EV, Punch EV, Tigor EV, and Nexon EV. It is the second product based on the company’s advanced Pure EV architecture.

Nomura India said SUVs of over 4 metres have the highest potential for EV penetration due to the GST differential between EVs (5 per cent) and ICE (48-50 per cent). Tata Curvv EV, it said, may significantly reduce range anxiety as most locally made EVs offer real-world range of 200-300 km while Tata Curvv EV may be able to offer real-world range of 350-400 km. 

"The current market size of this segment is 50,000 units per month and it is a white space for Tata Motors. Curvv could gain 10-20 per cent market share in this segment once all variants are launched, in our view. Key monitorables regarding this car will be reviews, customer feedback, and ICE pricing. There will likely be some cannibalization of Nexon EV, which will also be a risk to consider," Nomura India said. 

Nexon gets nearly 60 per cent first-time buyers. Tata Curvv EV will be for those looking to upgrade and, hence, cannibalization may be low, it said. The Tata Motors management mentioned that PV inquiry levels remain high, but customers are taking longer to convert. With good monsoons and the upcoming festive season, Nomura India expects H2FY25F growth should be better than H1FY25. 

"Overall, for the PV segment, we factor in FY25F and FY26F volumes of 6,20,000 (up 6 per cent YoY) and 6,51,000 (up 5 per cent YoY), respectively. We maintain our Buy rating on Tata Motors with target price of Rs 1,303, implying 27 per cent upside," Nomura India said.

In an earlier note, Kotak said Harrier EV launch is likely in 2HFY25E. Also, the company will be launching Altroz EV, Sierra EV and Avinya EV models in FY2026E. 

It noted that Tata Motors is the market leader in the EV segment with over 70 per cent market share and with the strong product pipeline, growing charging infrastructure, declining battery prices and PLI benefits, it is well positioned to capitalise on the growing electrification trend with first mover advantage. 

"However, any taxation cut on hybrids will negatively impact the EV sales over the near-term," it said. This brokerage finds Tata Motors' fair value at Rs 1,250. 

Tata Motors shares have fallen 12 per cent in the past five sessions amid concerns over tepid CV demand and weakness at JLR. 

"In the domestic PV segment, while demand environment remains muted, new launches (including Curvv) is expected to support growth. Domestic CV demand is also expected to pick-up going ahead. Healthy margin performance augurs well and near net-cash position in India auto business provides comfort," JM Financial said while suggesting a target of Rs 1,200 on the stock.

MOFSL said along with subdued global demand and margin headwinds, the recent supplier based constraint may pose as an incremental headwind in the near-term.  

"This, coupled with demand moderation in its India CV and PV businesses, raises concerns about TTMT’s ability to sustain the current-level of profitability going forward," it said while suggesting a target of Rs 1,144.