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Tata Motors to power EVs with Rs 18,000 crore investment until FY30

Investment to span over 6 years, targets 20% share in PV market by FY30

Tata motors

Tata Motors on Tuesday said it is planning to incur a capital expenditure between Rs 16,000 crore and Rs 18,000 crore into its electric vehicle (EV) division. (Photo: Twitter)

Deepak Patel New Delhi
Tata Motors announced on Tuesday its plans to invest between Rs 16,000 crore and Rs 18,000 crore into its electric vehicle (EV) division until 2029–30 (FY30). The company, which currently sells four electric car (e-car) models, aims to launch six more by March 2026.

India’s third-largest carmaker by sales targets achieving a 20 per cent share in the passenger vehicle (PV) market by FY30.
In 2023–24 (FY24), it held a 13.81 per cent share in the Indian PV market in volume terms, according to data from the Society of Indian Automobile Manufacturers.

In a presentation to investors, Tata Motors outlined its proactive strategy to drive the “mainstreaming” of EVs in India. This strategy includes expanding its EV product portfolio to offer a wider range of options with improved range (distance driven per charge) and achieving price parity with internal combustion engine (ICE) cars.
 
Additionally, the company plans to increase the number of e-car dealerships to 50 cities within the next 24 months.

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Collaborating with private charge point operators such as ChargeZone, Glida, and Statiq, Tata Motors aims to increase the number of public charge points across the country tenfold, reaching about 100,000 by FY30.
 
The number of community charge points currently stands at about 4,300, and the company intends to expand this to 100,000 by FY30. These efforts aim to reduce range anxiety and improve the overall ease of EV ownership.
 
Public charge points are accessible to any EV owner and are located in public areas, while community charge points are restricted facilities primarily meant for residents of a particular housing community or locality.
 
Tata Motors said that currently, only 10–15 per cent of its e-car customers are using rooftop solar for charging vehicles. By FY30, the company aims to increase this share to about 50 per cent.
 
In FY24, India saw 90,996 e-car sales, marking a year-on-year growth of 91.37 per cent, according to data from the Federation of Automobile Dealers Associations.
 
Tata Passenger Electric Mobility, a subsidiary of Tata Motors, dominated the Indian e-car market, securing a 70.57 per cent share in terms of volume in the last financial year.
 
In the presentation, Tata Motors said that its EV division, which is not a listed entity, would be “Ebitda break-even” by 2025–26.
‘Ebitda break-even’ refers to the point at which a company’s earnings before interest, tax, depreciation, and amortisation cover its operating costs, and it starts generating positive cash flow from operations.

The company also mentioned it would incur a capital expenditure of Rs 16,000 crore to Rs 18,000 crore in its EV division between the current financial year and FY30 “as necessary”.

Tata Motors expects EV penetration in the Indian car market to reach 20 per cent by FY30, up from about 2 per cent in the last financial year. Within its own portfolio, the company aims to achieve EV penetration of about 30 per cent by FY30.

It said that its PV volume growth would exceed the overall PV market growth rate. Currently holding about a 14 per cent share of the PV market, the company aims to achieve a 16 per cent share by 2026-27 and then “18–20 per cent in another two to three years”.

It is, however, not the only company investing heavily in EVs.

Mahindra & Mahindra’s (M&M’s) board last month approved an investment of Rs 12,000 crore in its EV arm, Mahindra Electric Automobile (MEAL), to fund the EV journey over the next three years.

 M&M would roll out its first set of Born EVs in the first quarter of the 2025 calendar year.

A Born EV is an e-car designed and engineered from the outset as an EV without being converted from an existing ICE vehicle platform.

EVs will constitute 20–30 per cent of M&M’s overall sales by 2027 or so.

Anish Shah, managing director and chief executive officer of M&M, said last month that the EVs will have a similar margin profile (on a per-unit basis) as ICE vehicles.

Just like ICE vehicles, EVs would have a lower margin profile when newly launched and thereafter improve the margins through value engineering. Shah did not wish to offer a timeline for when MEAL could break even.

In March, Chinese automotive giant SAIC Motor, which owns MG Motor India, and diversified business conglomerate JSW Group joined forces to form an automotive joint venture (JV), JSW MG Motor India. In this partnership, JSW holds a 35 per cent stake.

The JV plans to invest in the region of Rs 5,000 crore to develop new energy vehicles and ICE vehicles for both the Indian market and exports.

MG Motor is currently the No. 2 player in the Indian e-car market.

Maruti Suzuki India (MSIL) announced in 2023 the launch of its first EV in the sport utility vehicle category in FY24. However, the launch date was subsequently pushed back to 2024–25. MSIL aims to introduce six EVs in India by FY30.

South Korean carmaker Kia India plans to launch a ground-up EV in 2025, specifically designed for the Indian mass market, marking the brand’s first foray into the mainstream electric segment.

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First Published: Jun 11 2024 | 3:02 PM IST

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