TVS Motor E-Mobility Expansion: A Closer Look

A new chapter unfolds in TVS Motor Company Limited’s journey towards electric mobility dominance. Breaking free from traditional confines, the company, through its subsidiary, TVS Motor (Singapore) Pte Ltd, has orchestrated a strategic coup in the form of a significant acquisition. With the groundwork laid in April 2023 when the acquisition of a 25% stake in Killwatt GmbH was successfully concluded, the stakes have been raised.

Now, TVS Motor (Singapore) Pte Ltd is poised to acquire 8,000 additional equity shares in Killwatt GmbH, propelling their shareholding from 25% to an impressive 39.28%. This bold move exemplifies TVS Motor’s commitment to sustainable transportation solutions and underscores its vision to pioneer the electric mobility revolution. The recent press release illuminates the company’s ambitious strides towards establishing a commanding presence in the ever-evolving e-mobility landscape.

Killwatt GmbH: A Profile

Killwatt GmbH, a Germany-incorporated entity founded on July 3, 2020, operates from 95643 Tirschenreuth, Germany. The core focus of Killwatt’s business is the development, design, manufacturing, sale, and distribution of products and components in the realm of electric two-wheeler vehicles. While Killwatt is presently in the pre-revenue phase, it has exhibited tremendous potential in the electric mobility arena.

Strategic Vision

This noteworthy acquisition is perfectly aligned with TVS Motor Company’s overarching vision of positioning itself as a leader in the e-personal mobility domain, catering to the evolving needs of environmentally conscious consumers. Furthermore, the acquisition complements the company’s recent forays into the electric mobility space. TVS Motor recognizes Killwatt GmbH as a long-term partner to help establish a robust presence in the e-mobility business. Notably, the transaction has been conducted at arm’s length.

In a strategic move, TVS Motor, through its Singapore subsidiary, TVS Motor (Singapore) Pte Ltd, has acquired an additional stake in Killwatt GmbH via subscription to newly issued shares. The acquisition of 8,000 equity shares in Killwatt GmbH will increase TVS Motor’s shareholding from 25% to 39.28%.

Financial Aspects

The acquisition involves a cash consideration of EUR 500 per share. Significantly, 3/4 of the acquisition price has been paid upon the completion of the acquisition. The remaining 1/4 of the acquisition price is earmarked for a later date, contingent upon the successful accomplishment of a specific pre-agreed milestone by Killwatt GmbH.

In a rapidly evolving landscape where electric vehicles are gaining significant traction, TVS Motor Company’s strategic acquisition of Killwatt GmbH underscores its commitment to stay at the forefront of the e-mobility revolution. This development symbolizes not only a dedication to environmental sustainability but also a drive for innovation and growth in the electric two-wheeler sector.

About TVS Motors

TVS Motor Company, a global heavyweight in the manufacture of two and three-wheelers, stands proudly at the forefront of the Sustainable Mobility revolution. With state-of-the-art manufacturing facilities strategically located in India and Indonesia, the company draws strength from a venerable century-old legacy grounded in principles of Trust, Value, and unwavering Customer Passion.

This commitment to crafting internationally acclaimed products of the highest calibre is underpinned by an unwavering dedication to innovation and the steadfast embrace of sustainable manufacturing practices. Notably, TVS Motor has garnered the coveted Deming Prize, an exclusive honour in the realm of two-wheeler manufacturers, symbolizing an unyielding pursuit of excellence.

With a consistent track record of leadership in their respective categories, TVS Motor’s products have consistently shone in the prestigious J.D. Power IQS and APEAL surveys. Holding the top position for four consecutive years in the J.D. Power Customer Service Satisfaction Survey reaffirms the company’s unwavering commitment to customer-centricity.

Expanding their horizons, TVS Motor’s subsidiaries in the personal e-mobility sector, the Swiss E-Mobility Group (SEMG) and EGO Movement have become influential players in the e-bike market, especially in Switzerland.

Operating across 80 countries, TVS Motor Company is dedicated to delivering exceptional customer experiences while championing the cause of Sustainable Mobility.

Q2FY2024 Concall Analysis

1. Domestic ICE market sales grew by 4% in Q2, reaching 7.35 lakhs compared to 7.1 lakhs in the same quarter last year.
2. TVS Motor Company’s Q2 electric vehicle (EV) sales witnessed a substantial increase, with 58,000 units sold, a significant jump from the 16,000 units sold in the previous year’s Q2.
3. The TVS iQube, an electric scooter, continued its upward trajectory, surpassing the 2 lakh unit sales milestone.
4. TVS Motor Company announced the start of production of the BMW CE-02, an electric vehicle developed in collaboration with BMW Motorrad.
5. TVS Credit achieved significant milestones with a book size crossing Rs 23,500 crore and a 39% growth in profit before tax (PBT) to Rs 180 crore.
6. The company disclosed a strong pipeline of new products, including a range of electric vehicles with power ratings between 5 to 25 kW.
7. TVS is expanding its EV dealership network and is planning to introduce its products in new markets.
8. TVS Motor Company expresses confidence in maintaining its growth momentum, positioning itself as a prominent player in the ever-evolving automotive industry.

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.