Tata Invests Rs 7500 Crore For Electric Vehicle Business; Plans To Launch 10 Electric Cars, Bikes In Next 5 Yrs

Sources revealed that the TPG Rise Climate fund will lead a Rs 7,500 crore investment in a new company of Tata Motors Ltd.

This new company will house the automaker’s passenger electric vehicle business.

New Company Of Tata Motors

Here TPG Rise is the dedicated climate investing strategy of US private equity firm TPG, and co-investor ADQ.

TPG Rise will subscribe to compulsory convertible instruments for between 11% and 15% stake in the new company.

This is equal to an equity valuation of up to $9.1 billion for the new company, said Tata Motors in a statement.

Further, this new company will be a unit of Tata Motors.

Development In EV Infrastructure

Basically, this new company will help in leveraging the automaker’s existing investments and capabilities.

It will also help in channeling future investments into electric vehicles, dedicated battery electric vehicle platforms, advanced automotive technologies, and catalyze investments in charging infrastructure and battery technologies, as per the statement.

The company plans to create a portfolio of 10 electric vehicles and establish a charging infrastructure across India in the next five years.

Also, with the partnership with Tata Power Ltd, it plans to spur the rapid adoption of such eco-friendly vehicles.

 Creating A Synergistic Ecosystem

On this occasion, the chairman, Tata Motors,  N. Chandrasekaran said, “I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India. We will continue to proactively invest in exciting products that delight customers while meticulously creating a synergistic ecosystem. We are excited and committed to play a leading role in the government’s vision to have a 30% electric vehicles penetration rate by 2030,”.

Further, he added that the first tranche of the funding will be made by March, and the remainder by the third quarter of 2022.

Prior to this, on 13 August that Tata Motors was in talks with private equity investors to raise as much as $1 billion for its EV business. 

During that time, the company was in talks with buyout firms, including TPG, Blackstone and KKR.

Basically, improving charging infrastructure is also encouraging more consumers to opt for electric vehicles to avoid pollution. 

Apart from this, the government’s encouragement and a steep increase in prices of internal combustion engine vehicles post-implementation of Bharat Stage-VI emission norms and rising fuel prices are also causing a shift towards EVs.