Tata Motors’ Ambitious Market Share Expansion Strategy

In an investor presentation on June 11, 2024, Tata Motors revealed ambitions to significantly increase its market share, targeting a rise of 400-600 basis points from the current 14% to 18%- 20% by the end of this decade.

The company intends to achieve this goal by introducing entirely new vehicle brands in both the internal combustion engine (ICE) and electric vehicle (EV) segments. To accelerate the adoption of EVs and ensure that 20% of its total passenger vehicle (PV) sales come from EVs by FY30, Tata Motors will implement a multifaceted strategy focusing on product innovation, technological advancements, improved accessibility, charging infrastructure development, and cost optimisation.

The company said, “We will grow faster than the industry leveraging new nameplates and powertrain shifts.”

Tata Motors has established milestones in a year characterised by anticipated modest 3-5% growth in India’s internal combustion engine (ICE) car sales. Additionally, despite leading with a 72% market share in electric cars, Tata Motors is experiencing a slowdown in month-on-month sales in this segment.

Expanding the product portfolio is poised to capture 80% of the market for Tata Motors. The company aims for a 10% EBITDA margin and positive free cash flow by 2030 in its consolidated passenger vehicle and EV business.

Introducing new vehicle brands is anticipated to enhance volumes and operational efficiency, increasing revenues in both passenger vehicle (PV) and electric vehicle (EV) segments. This move is expected to boost the overall profitability of the portfolio, which will be helped by the projected decline in battery prices. In line with its strategy to promote EV adoption in India, Tata Motors plans to launch new EV models – Curvv.ev and Harrier.ev Sierra.ev in FY 2025, followed by Sierra.ev and Avinya, its first ground-up EV developed in FY26.

The models will address key obstacles in terms of range and technology. It claims to have a 300-plus-mile range, be loaded with advanced technologies, and offer vehicle-to-vehicle charging.

Further, Tata Motors plans to increase the number of EV-exclusive showrooms from two to 50 over the next few years in a phased approach.

In efforts to enhance the charging infrastructure, Tata Motors aims to raise the number of public charging points from 10,000 in FY 2024 to over 1,00,000 by FY 2-30, with a significant increase from 4,300 to over 1,00,000 for community charging. The company will offer bundled packages combining EVs with solar rooftops to deliver tangible financial advantages to customers and will promote both solar rooftops and EVs jointly, setting specific targets for this initiative.

Moreover, Tata Passenger Electric Mobility will benefit from collaborations with other Tata Group entities, including JLR, Agartas, Tata AutoComp Systems, and Tata Power, ensuring access to advanced technologies, localisation, and cost efficiencies. Utilising JLR’s EMA platform for Avinya is expected to expedite Tata Motors’ entry into the premium pure EV segment while also offering cost advantages.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.