Tata Motors secures Rs.7,500 Crore investment for New EV Subsidiary

Recently, the Tata motors and TPG rise climate has entered into an binding agreement, wherein the latter along with its co-investor ADQ will invest in its newly incorporated subsidiary of Tata Motors.

TPG Rise Climate would invest nearing to Rs. 7500 Crore in compulsory convertible instrument, wherein it would secure nearing to 11 to 15% stake in this company, thus translating to an equity valuation nearing to $ 9.1 billion(RS 67,349 crore).

• Would invest about $2 billion (Rs. 15,000 crore over the next 5 years.

• Tata Nexon EV is the highest EV in the nation and about 7000 units has been sold.

• The carmaker looks to expand beyond 100 cities and 255 touchpoints.

The new company would help in leverage entire existing investment and capabilities of TATA Motors and it would also help in channelizing the future investment in EVs, dedicated BEV platforms and advanced automotive technologies and catalyze the investments in charging infrastructure and also battery technologies.

Over the next five years, the above company would create a portfolio of 10 EVS in association with TATA power as well as catalyze the creation of a widespread charging infrastructure in order to facilitate rapid EV adoption In India.

It has been expected that the 1st round of capital infusion will be completed by March 2022 and the rest being invested by the next year end.

As per the TATA Motors, the EV business would need more than $2 billion (RS.15000 crore approx) of investment in the coming 5 years. The company has stated that, PVs would be fund constrained to support the aggressive EV aspirations. Need to continue to build momentum in EV to retain the competitive advantage. The EV technologies are still evolving and they are risky.

To have market dominance, focused approach is followed

Tata Motors is going about its EV business in a strategic manner, it would comprise a holistic offering of network and charging infrastructure and products. The carmaker, which is witnessing a robust demand for its passenger vehicle business, is also notching speedy gains in the electric passenger vehicle.

The Tata Motors have commanded a 70% share of the Eve market this past year and the NExon EV, which has a 312km range and sold more than 7000 units until now, it remains, India's best selling Electric PV by far. The carmaker has expanded its portfolio with the addition of Tigor EV-launched on August 31st for Rs. 11. Lakh.

By recognizing the growing demand from the fleet user segment, the Tata has introduced the Xpres-T EV in mid September. The eco-friendly sedan, which has been exclusively, targets mobility services, corporate and government fleet customers, which comes with an optimal battery size as well as captive fast charging solution, both of which are designed to provide a low ownership cost.

The TATa motors has been benefitting greatly from its sister company TATA power, India's largest power generation company, which is presently has a network of more than 700 public charges across india, more than 7000 AC slow chargers and above 150 captive charging points (YTD 2022).

10 New EV's by FY2026, enhanced component localization and network expansion

TATa motors has been implement Project Helios, wherein it has confirmed its plans to expand its portfolio by offering india-specific products having different body styles as well as driving ranges, that is 10 EVs by FY2026. It is also planning towards transition to a modular multi-energy platform from conversion EVs.

When it comes to network front, the company is looking to expand beyond its existing micro-markets (above 100 cities, 255 touchpoints by next April. It would also like to introduce a subscription model for TATa EVs and it has got plans to further increase localization levels of EV components(both Tier 1 and Tier 2) and this would help optimize the costs and it would further drive down pricing. High initial cost is definitely acts as a deterrent to numerous ICE vehicle buyers who desire to shift to EVs.