Tata Motors’ Ambitious EV Investment and Market Goals

According to Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Motors Electric Mobility, electric vehicle sales in the local market are projected to increase tenfold over the next five years, falling short of the government’s earlier target of 30% of new car sales.

Shailesh Chandra emphasised that Tata Motors is taking a pragmatic approach based on current ecosystem development. It estimates that electric vehicles will comprise 20% of industry-wide new car sales by FY 2030, scaling back from previous estimates of potentially half its volumes in this period.

Tata Motors plans to invest between ₹16,000-18,000 crore in its electric vehicle segment to bolster its portfolio and develop an ecosystem for these vehicles, according to Chandra. The company aims for a significant increase in the combined market share of CNG and EVs, targeting 18-20% in passenger vehicles by FY 2030, up from 13.9% in FY 2024.

The Managing Director also stated, “We will look at increasing our addressable market. Currently, with seven products, we are addressing 53% of the market, and in our addressable market, we have a 26% market share. We aim to increase our addressable market to 80% by FY30”. Over the next two years, Tata Motors plans to launch the Curvv EV, Curvv ICE (internal combustion engine), and Sierra EV.

Additionally, Tata Motors Group CFO P Balaji highlighted that the demerger of Tata Motors’ commercial vehicles business will enable each resulting entity to focus more effectively on its growth strategies. The commercial vehicles segment, traditionally a strong revenue generator, will have the flexibility to invest its cash flows independently post-demerger.

On the other hand, the passenger vehicles (PV) business, which has recently achieved self-sustainability, aims for a 10% EBITDA margin across both combustion engine and electric vehicle segments. Jaguar Land Rover will remain part of the passenger vehicles arm and is anticipated to become debt-free by the next fiscal year. The demerger process is expected to be completed by the first quarter of the upcoming fiscal year.

Girish Wagh, Executive Director of Tata Motors Commercial Vehicle, expressed optimism about the business’s prospects over the next five years, driven by increasing disposable income, government infrastructure investments, and broader measures to boost the manufacturing sector’s contribution to GDP, enhancing freight and passenger movement.

On June 27, 2024, the share price of Tata Motors Ltd opened at ₹952.50, touching the day’s high at ₹956.75, as of 11:37 AM on the NSE.

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