Tata Motors Ltd., the leader in India’s tiny electric vehicle market, will go aggressive and targets to turn at least a quarter of its portfolio battery-powered.
Tata Motors Ltd. to increase the share of electric vehicles from 2% of the portfolio to 25% in the medium to long term, N Chandrasekaran, chairman of parent Tata Sons Pvt. said the at the automaker’s 76 annual general meeting on Friday. “We have aggressive growth plans (in EVs) and towards that we will also do a capital raise for the EV segment at an appropriate time.”
The company’s inclination to raise capital separately for its EV business comes at a time when it is already awaiting National Company Law Tribunal’s order to carve out domestic passenger vehicle business, including EVs. It is already scouting for strategic partner.
The group is eyeing at least 10 electric models before 2025. It has two fully electric variants of the Nexon compact sports utility vehicle and the Tigor hatchback. It has sold 4,000 electric Nexons since the launch last year, taking its share to 71.4%. It competes with the likes of MG Motor and Hyundai Motor Group that have one EV model each.
Semiconductor Fear looms
Semiconductor shortage is affecting automakers globally and Tata Motor’s subsidiary Jaguar Land Rover reported a wider-than-expected loss in April-June owning to the crunch, dragging down the company’s earnings.
The chip shortage and disruption due to local shutdowns will continue to hit company’s production volumes, sales, cash-flow and margins for the next the few months, Chandrasekaran said.
“Expect the situation to improve in the second half of the ongoing financial year even as the broader underlying structural capacity issues resolve with new capacities coming online over the next 12-18 months,” he said. “Some level of shortages will therefore continue through to the end of the year and beyond.”
Tata Motors, Chandrasekaran said is on track to wipe out its debt by FY24. “Last year due to internal cash flows and tight management, we were able to reduce the debt by over Rs 7,500 crore,” he said.
Tata Motors, Jaguar Land Rover, and the domestic passenger and commercial vehicle businesses are on the path to recovery with passenger vehicles being the star performer of FY21, according to Chandrasekaran.
The company, having managed to achieve 10% share of the domestic passenger vehicle market in the quarter ended June, is now targeting 15%.
