Shailesh Chandra, MD & CEO, Tata Motors Passenger Vehicles, at the launch of Next Gen Tiago and Tiago.ev

To promote flex-fuel vehicles, Tata Motors has said the government should make the fuel affordable (cheaper) rather than reducing the goods and services tax (GST) on such vehicles because price of the fuel directly impacts the customers.

“There is absolutely no need to reduce the GST on such vehicles...benefit has to go to consumers. A study has to be done by what level it can be reduced. That could be the threshold, otherwise people won’t get excited about flex-fuel vehicles (FFVs). If you make it cheaper that would become a base fuel and people will start buying FFVs,” Shailesh Chandra, Managing Director and Chief Executive Officer, Tata Motors Passenger Vehicles, told businessline.

With the surge in crude oil prices, the Centre is pushing for more alternative fuels including flex-fuels and companies like Maruti Suzuki India and Hero MotoCorp are launching flex-fuel powered vehicles next week. While Maruti Suzuki is introducing its WagonR flex fuel on June 4, Hero MotoCorp is launching Splendor and HF Deluxe commuter bikes powered by this new fuel.

Speaking on the sidelines of the all-new Tiago launch here, Chandra said rising fuel prices remain a key concern for the auto industry, with rates having increased four times in the last 10 days, making it difficult to assess the eventual impact on consumer sentiment and demand.

Shift in choices

Chandra also added that the rising fuel prices could also entail a shift in powertrain choices in the small car segment, which is the most sensitive regarding the acquisition and operating cost of the vehicle for a customer.

“Bigger cars, people are less sensitive to changes in fuel prices and so on, and therefore they might continue with their purchase decisions. But, in the smaller segment, people are very sensitive to their monthly expenses, and therefore fuel price hikes disturb the dynamics for such a buyer,” he said.

He also cautioned that higher diesel prices could have a multiplier effect on inflation, which may influence consumer sentiment and spending patterns in the days to come.

In terms of EVs, he said there has been a sudden rush in the demand and for Tata Motors too, it has risen close to 33 per cent or nearly one-third of its total bookings in May this year and therefore, Tata Motors is also going to increase the capacity of its EVs to around 15,000 a month from around 10,000 per month currently, in the next three-four months.

Next Gen Tiago

Meanwhile, Tata Motors Passenger Vehicles launched the Next Gen Tiago hatchback available across petrol, iCNG, and electric powertrains, starting at ₹4.69 lakh for the petrol version, ₹5.79 lakh for the iCNG and ₹6.99 lakh for the electric version.

While the petrol variant is priced between ₹4.69 lakh and ₹7.29 lakh, the iCNG is priced at ₹5.79 to ₹7.99 lakh (all prices are introductory ex-showroom).

The Tiago.ev is priced between ₹6.99 lakh and ₹9.99 lakh, and will also be available with battery-as-a-service (BaaS) option, starting at ₹4.69 lakh (with battery EMI of ₹2.6 per km).

Published on May 28, 2026