Tesla vs Tata Motors: A Detailed Comparison

Tesla is an American electric vehicle (EV) and clean energy company. It was founded to accelerate the world’s transition to sustainable energy. Its primary focus is on designing, manufacturing, and selling electric cars, energy storage products, and renewable energy generation solutions. It is widely recognized for its innovative electric vehicles, advanced battery technology, and extensive charging infrastructure. 

Tata Motors is an Indian multinational automotive manufacturing company. It is a subsidiary of Tata Group, one of India’s largest conglomerates. It is well known for manufacturing a wide range of vehicles, including passenger cars, commercial vehicles, and electric vehicles. The company has a diverse portfolio of brands and products to cater to different market segments. Tata Motors in recent years has been its foray into electric vehicles (EVs). 

The company has introduced electric variants of some of its popular models, such as the Tata Nexon EV, Tiago EV, and Tigor EV. Tata Motors has been investing in EV technology and aims to contribute to the adoption of electric mobility in India and globally.

Also Read: Best EV Stocks in India

Tesla is widely recognized as a pioneer and leader in the electric vehicle industry. It has successfully developed and marketed high-performance electric cars. Whereas Tata is also expanding its EV unit to capture the domestic EV market. 

Tesla experienced losses in its operations in earlier years. In 2018, the company reported a net loss of USD 976 million, which narrowed to USD 775 million in 2019. However, in FY20, Tesla achieved a milestone by posting a net profit of USD 721 million after consecutive losses since FY17. Remarkably, during FY21, the net profit grew over six-fold to USD 5,519 million. In the most recent financial year, the net profit further surged to USD 12,556 million. Despite Tesla’s strong presence in the EV sector, it faced challenges in generating substantial profits in earlier years. 

Tata Motors, similarly, faced challenges during the same period and experienced losses starting from FY19. The net loss for FY19 amounted to Rs 28,724 Crore, which was reduced to Rs 13,395 Crore in FY21. However, in FY23, the company achieved a profit of Rs 2,690 Crore. Tata Motors returned to profitability after four years, primarily due to the improved performance of its luxury car unit, Jaguar Land Rover (JLR). JLR, in the third quarter of FY23, reported profit as the chip shortages eased and production and wholesale numbers got increased. 

If we compare the price to earnings of both companies Tesla is trading at 76.26 times while Tata Motors is trading at 79.8 times in their respective markets. Both companies have a presence in their origin country as well as in other geographies. Tesla is yet to come to India. 

Furthermore, Tesla’s EPS during the year 2020 was USD 0.21 and reached USD 3.62 in FY22 while Tata Motor’s EPS was negative and becomes positive to Rs 7.27 in FY23. 

Both the company’s revenue is growing significantly. If we look at the operating margins of both the company Tesla’s margins have increased from 12.1% to 16.8% in FY22 while Tata Motor’s margins are slightly lower than Tesla’s and it is 9% in the last two years. 

The current trading price of Tesla stock on the New York Stock Exchange is approximately USD 264.61. The market capitalisation of the company is USD 838.68 billion, However, its one-year return stands at a modest 12.6%. On the other hand, Tata Motors is trading at Rs 561, with a market capitalisation of Rs 201,701 crore. Tata Motors has displayed impressive growth with a one-year return of 40%. 

Prime Minister Narendra Modi is in the US for his official meeting with US President Joe Biden, furthermore, He also met with Elon Musk and had a good discussion with him. Elon says Tesla intends to make significant investments in India. This investment from Tesla would aim to support India’s sustainable energy generation primarily through solar and wind. Musk also said that he is keen on improving India’s internet connectivity and hopes to bring SpaceX’s Starlink satellite internet service to the South Asian nation. 

It will be very interesting to watch when and how Tesla hit the Indian market, and whether will it be a game changer for the Indian EV market considering Tesla’s prominence in the electric vehicle industry and its reputation for innovation while the future outcome remains uncertain, it is likely that the Indian automobile market would witness intensified competition between domestic players and Tesla as they strive to capture the market and meet the evolving demands of Indian consumers. 

The arrival of Tesla could potentially drive further advancements in the Indian auto industry and encourage other automakers to accelerate their efforts in the electric vehicle segment.