Tata Motors appears to have set in motion its game plan to plug the gap in India’s affordable electric vehicle market, as it makes official the news of a dedicated all-electric sub-brand.
The automaker on October 12 announced that private equity firm TPG Group would be investing Rs 7,500 crore in its new wholly-owned electric vehicle (EV) subsidiary.
Here’s what we know, so far, about the yet-to-be-named subsidiary:
1 It will be wholly-owned by Tata Motors and dedicated to all things EV
Tata Motors has announced that it will be forming a wholly-owned subsidiary dedicated exclusively to making EVs—passenger electric vehicles to be specific.
American private equity firm TPG Group is putting in Rs 7,500 crore, an investment that will be made over 18 months. TPG Group will not retain any shares within the group, Tata Motors said in a statement to the Bombay Stock Exchange.
While the subsidiary is yet to be officially christened, Tata Motors Limited has set up the entity under TML EVCo.
Apart from making battery EVs, the brand will also use Tata Motors’ tech and capabilities and channelise them into EV technology, dedicated EV platforms and charging infrastructure, the company has said.
2 Lots of EVs but no hybrids
Tata Motors will introduce 10 EVs over the next five years. The new models will be more extensively localised, utilising the existing Alfa and Omega platforms while also cultivating a dedicated EV platform.
At present, Tata sells two EVs—the Nexon and the Tigor. While the Tigor is one of the most affordable EVs in India, both are the only passenger EVs to fully avail central as well as state subsidies, most of which are capped at Rs15 lakh.
Tata Motors has confirmed that it will not be investing in hybrid powertrains and focus on electric, petrol diesel and CNG vehicles.
The company does not intend to retro-fit EV powertrains to existing platforms either and will focus on its modular, powertrain agnostic, multi-energy platforms such as the ALFA (Altroz, Punch) and OMEGA platforms to serve as the base for the next range of EVs.
While a dedicated EV platform is in the pipeline, it’s not likely to be launched anytime soon. The Tata Altroz is set to be the next EV launch by the company, though it’s unclear whether it will be branded under the company’s new all-electric car brand.
Also read: Tata Motors offers TPG multiple exit options, including IPO, from EV arm
3 The most successful EV-maker in India
Having clocked sales of 10,000 EVs, Tata Motors is the only Indian carmaker, or indeed the only car manufacturer in the country, to have covered extensive ground in setting up an EV ecosystem.
It has more than 700 charging stations across 120 cities. The company will incorporate the services of other group companies such as Tata Power, Tata Chemicals and Tata Consultancy Services (TCS) for end-to-end solutions in the EV space.
While Tata Power Ltd is expected to set up a charging infrastructure, Tata Chemicals will help establish large-scale local lithium-ion battery and battery cell manufacturing technology and infrastructure.
Tata Auto Components Ltd will take care of the powertrain requirements, while brands like TCS and Tata Technologies will help fine-tune the software.
4 Tata is setting up battery manufacturing mother lode
Tata Group is building a lithium-ion battery plant in Gujarat, having set aside Rs 4,000 crore for it.
The plant, coming up in the special investment region of Dholera, is spread over 126 acres. It will cater to battery technology in the automotive as well as the stationary energy-storage sector.
Tata Chemicals is also building an energy-storage system facility for mobility and stationary charging, with labs in Pune and Chennai, media reports have said.
Tata is focusing on what the brand calls a “circular economy”, which means the manufactured components such as battery cells can be re-absorbed through the recycling process, remanufactured and sold anew.
Also read: Tata Motors halts passenger vehicle stake sale as EVs shift to top gear
5 The only internal combustion carmaker to have a dedicated EV subsidiary
Auto companies setting up wholly-owned subsidiaries isn’t new, with the likes of Toyota and Nissan setting up luxury brands (Lexus, Infinity) that cater to a different demographic. Tata, however, is the only carmaker to have an exclusive brand dedicated to EVs.
Sure, Hyundai has a sub-brand called Ioniq under which its electric cars will be sold, while Audi has registered the e-tron name to precede all its electric cars, much like Mercedes-Benz does with the “EQ” sub-brand and BMW with the “i”. However, these remain sub-brands and not separately registered wholly-owned subsidiaries.
At a time when all manufacturers are in the process of phasing out their fossil-fuel cars, Tata Motors intends to keep its existing brand exclusively for petrol, diesel and CNG cars, with the latter also expected to get dedicated powertrains.
It remains unclear what will happen to the Tata Motors brand when there will be no fossil fuel cars to be made, but for the moment, conventional ICE cars are clearly on Tata Motors’ agenda for the decade.