Tata Motors sees 25% share for EVs in its passenger car business by 2025

Tata Motors has set an ambitious target of its EV business contributing 25 per cent of its total annual sales turnover by 2025 Natarajan Chandrasekaran, chairman of Tata Sons and chairman of Tata Motors, said at the 76th annual general meeting of the company.

Tata Motors to look at fund raising for EV business, charts 25% sales from battery-powered cars

The Mumbai-based automobiles major is looking to raise capital for its electric vehicle business, he said, adding that the company has lined up capital expenditure of Rs3,000-Rs3,500 crore for the current financial year.

“We have a very ambitious goal for electric vehicles. From the current 2 percent we have planned to have at least 25 percent of our sales coming from EVs in the medium to long term. We will be launching at least 10 models before 2025. Towards this we will also do a capital raise for EV segment alone at the appropriate time,” Chandrasekaran said.

Tata Motors has a 77 per cent of the domestic electric passenger vehicle market in India, powered by the Nexon EV. Since its launch in early 2020, the Nexon EV has seen sales of more than 4,000 units.

Tata Motors has a strong orderbook for the Nexon EV extending to 14-16 weeks, the company had informed recently. During Q1FY22 the Nexon EV saw sales of 1,715 units, the highest in a quarter since its launch. Demand for the electric version of the Tata Nexon is now on par with the diesel variant of the SUV in markets such as Maharashtra and Gujarat where the electric model is available.

Tata Motors will also look at launching more affordable EVs in the future compared to the Nexon EV whose prices start at Rs14 lakh. This is in addition to plans to launching EVs for the last mile application like an electric version of the Tata Ace or similar vehicle. These mini trucks are targeted at intra-city commercial purposes.

“We will be launching the Tigor EV with a higher range in FY22 and we will also be looking at more affordable EVs in the future. We don’t have definitive dates to announce about that today,” Chandrasekaran added.

Tata Motors is working with group company Tata Power to set up charging stations across the country. Chandrasekaran said Tata Motors is expanding its charging infrastructure to at least 25 cities and the goal is to have at least 10,000 charging stations in the coming years.

Replying to a shareholder's query on the company's investment plans, Chandrasekaran said, "For FY21 it was Rs19,800 crore. For FY22 the plan is Rs28,900 crore, that is basically 2.5 billion pounds for JLR on an annual basis and Rs3,000 crore to Rs3,500 crore for Tata Motors."

The company will also look to raise capital separately for its EV business at an appropriate time, he added.

He also stated that the company is investing in hydrogen fuel cell vehicles. He said, "We are investing in hydrogen. And in fact, we got the first order from Indian Oil for 15 vehicles, and we have a lot of work going on in the hydrogen fuel cell area."

He further added, "We already have produced seven such vehicles but we have orders for 15 vehicles but it is all in the trial stage and we need to have a long term plan. We are working on it."

Replying to a query on Tata Motors' plans for EV components business, he said, "We are studying and that will have opportunities. In fact, we are also looking at setting up a separate battery (business) outside of Tata Motors."

Speaking on the semiconductor shortage issue, Chandrasekaran said the company is looking at alternative sources and is making progress. "In fact, some of the reasons why we are able to sell the cars at this stage and produce the EVs is primarily because of that. On JLR, we are looking at a number of options, including working directly with semiconductor manufacturers. Those discussions are on and the particular contracts with them are all being negotiated," he said.