The Nexon EV Fire Is A Grim Reminder And An Opportunity For Tata Motors

As a video of a burning Nexon EV went viral, Tata Motors Ltd. was thrust into the spotlight of safety concerns around electric vehicles. It wasn’t just that. The incident also brought back memories of another Tata car that lost buyer trust after similar fires—the now-discontinued Nano.

The fire heightened concerns as it follows a number of electric scooters going up in flames because of heated batteries, prompting the government to order an investigation. Tata Motors, too, is probing the Nexon fire.

“It is not a reputation risk for Tata Motors, as in the case of Nano,” Suraj Ghosh, director of mobility at S&P Global, said. There will be such odd incidents in electric vehicles, and this may give Tata Motors data to tweak any gaps, he said. Unless the investigation is over, according to Ghosh, it is hard to say what really went wrong in this case.

Yet, Nano's history underscores how things can go wrong. Touted as the world's cheapest car, it suffered serious brand damage after multiple fires. And Ghosh said, "The nature of EVs is such there is a risk of thermal runways happening with such isolated cases."

EVs catching fire, however, is not new. Tesla Inc., the world’s biggest EV maker, had disclosed that from 2012 to 2021, there was one Tesla fire for every 210 million miles travelled. For comparison, it cited data from the National Fire Protection Association and the U.S. Department of Transport that showed there was vehicle fire for every 19 million miles travelled on an average.

For Tata Motors, the fire coincides with its EV arm, Tata Passenger Electric Mobility, laying out aggressive plans to launch multiple models by 2025. Besides the Nexon EV, the company sells the Tata Tigor EV.

Initial feedback suggests no impact on demand so far, according to two Tata Motors dealers from Delhi who spoke on the condition of anonymity to speak candidly. Potential buyers raise safety and fire-related questions but that doesn’t impact their buying decisions because of the trust in the brand, one of two the dealers said.

According to Abhishek Jain, research analyst at Dolat Capital, customers are aware of the perils of EVs catching fire, especially after the multiple fire incidents in electric two-wheelers. And he does not see an impact on the electric car market.

The incident will only strengthen the ecosystem because Tata is going to lead the way in doing the right analysis, Maxson Lewis, managing director of charging infrastructure company Magenta. If Tata handles it right, he said, that will increase customer confidence.

The company has promised full disclosure. “We are committed to sharing the findings post an in-depth root cause analysis,” the Tata Motors spokesperson said in a statement. This is an isolated incident as more than 30,000 Tata Motors EVs have traversed over 100-million kilometres across the country in nearly four years.

The government’s Defence Research and Development Organisation will conduct a separate investigation.