This marks the first major fundraising by an Indian carmaker to push clean mobility.
Tata Motors is betting big on electric vehicles (EV) and plans to launch 10 new electric cars in India by 2026.
TPG Rise Climate and Abu Dhabi’s ADQ are investing $1 billion or Rs 7,500 crore in the carmaker’s new subsidiary for the EV business- called EVCo.
The investors will now hold a stake of 11-15% stake in this subsidiary, valuing the business at $9.1 billion.
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Significance
This marks the first major fundraising by an Indian carmaker to push clean mobility.
It is also being seen as increasing interest from global investors in India’s effort to electrify transport.
With these funds, it will launch a slew of electric four-wheelers that could turn the tides in India’s emerging EV industry
Utilizing The Funds
The investment also gives Tata Motors access to TPG’s network of world-class EV capabilities which it can use to fine-tune its strategy.
EvCo will undertake the passenger electric mobility business while the passenger business unit will own the existing assets like manufacturing plants, dealerships, and brands.
Chief Financial Officer P B Balaji said that the investment will “go towards creating intellectual properties like new vehicle designs and EV platforms”.
It will be manufacturing the cars through EVCo which will feature larger battery packs than existing models and will also have more driving range
No Exclusive Platform
Presently it has only two EVs in the market, the Nexon which rules the EV sales charts in India and the recently launched Tigor EV.
Shailesh Chandra, president, Passenger Vehicles Business at Tata Motors, said that the company will transition from conversion electric vehicles to those built on modular multi-energy platforms.
There will not be an exclusive platform for the EVs.
Instead, the cars will be built on modified existing platforms such as ALFA and OMEGA.
Promoting EVs In India
Along with building its portfolio, it has also committed to setting up charging infrastructure to facilitate rapid EV adoption in India, in association with Tata Power.
N Chandrasekaran, chairman of Tata Sons, said, “We are committed to playing a leading role in the government’s vision to have 30% electric vehicles penetration rate by 2030.”
To increase the percentage of total car sales by 2030 from less than 1% at present, the government has launched several incentive schemes including one for setting up local battery manufacturing.
Achieving the target would go a long way toward reducing the country’s oil dependence and cut pollution
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