Tata Motors and Hyundai Motor have emerged winners in a tender to supply 250 electric passenger vehicles to the government floated by Energy Efficiency Services Ltd, people familiar with the development said.

Out of the total procurement, Tata Motors will supply 150 Nexon electric compact SUVs while Hyundai will supply 100 units of its Kona electric SUVs, they said.

This is part of a tender floated by the state-owned government transport provider to acquire 1,000 electric vehicles from automobile manufacturers.

However, 750 vehicles of the tender, which were meant for e-taxis, has been put on hold, said Saurabh Kumar, managing director of EESL. “The e-taxi operators were wary of any fresh investments at this time, so we will let the tender lapse and wait till demand revives for e-taxis,” he said.

The tender came three years after EESL had floated a 10,000 vehicle EV tender in 2017. That tender – won by Tata Motors and Mahindra & Mahindra – was eventually scrapped.

Under the new contract, EESL was calling for quotes for two different categories of EVs – 750 electric cars with a standard three-year warranty and comprehensive annual maintenance costs (AMC) for three years and 250 cars with a standard six-year warranty and comprehensive AMC for six years.

“Currently EESL has 100 charging stations,” Kumar said. He said usage of charging stations is increasing steadily and grew 20% in July. “Going forward, this will definitely give a fillip to the electric vehicle sales,” he said.

As per the latest deal, EESL will procure Tata Nexon at Rs 14.85 lakh each, just Rs 14,000 cheaper than its ex-showroom price of Rs 14.99 lakh. Kona, which offers a higher range, will be procured at an 11% lower price band of Rs 21.1 lakh.

While confirming its participation in the tender, a Tata Motors spokesperson said Nexon EV has helped the company post a market share of 62% in EVs in the first quarter of this fiscal. The company recently rolled out the 1000th Nexon EV in just over six months.

An order from EESL is not a volume game, but it helps in terms of branding s the order from a government agency gets consumer confidence in such products, said Kaushik Madhavan, vice president, mobility practice, at research and consulting firm Frost & Sullivan.

For Hyundai, such orders are an entry point with government agencies while Tata Motors gets better prepared to handle quality and other operational issues.

Mahindra, the country’s pioneer in EVs, did not participate in this tender. Experts said their limited EV product profile as well as e-Verito not doing too well could be the reason for non-participation.

According to some industry insiders, many government agencies had refused Tata Tigor and Mahindra e-Verito earlier procured by EESL, blaming poor performance and range.

The newer set of EVs have a higher range and perform better opening the doors for EESL to consider fresh tenders, experts said.

This is the right time for EESL to take the plunge and open more tenders for EVs, Madhavan of Frost & Sullivan said.

He said the current crop of EVs are better designed and developed and leagues ahead in performance compared to previous ones.

EESL is a joint venture of four public-sector undertakings under the power ministry promoting the adoption of EVs. It purchases electric cars from manufacturers and leases them to government departments and cab aggregators.