Leading carmaker Tata Motors targets scaling up its double-digit EBITDA for the CV business into teens by FY26 and is aiming at a 10 percent EBITDA for PV and EV business by FY30, an investor presentation said on June 9.
The CV business will be 'stepping up the pace now', said Tata Motors, setting sight on 40% market share by 2027, with teen EBITDA margin. Commercial vehicles at Tata Motors could see a proactive investment in decarbonisation and connectivity solutions, along with software defined vehicles (SDVs).
The management reaffirmed its EV business achieved EBITDA breakeven in FY25 in a mark of improved profitability, which it said will continue going forward. The car maker is now targetting its EV business to have a penetration of 20% By FY27 and over 30% by FY30 with continued improvement in margins. The EV side of the business is well-funded for the next three years, added Tata Motors, and said it is aiming at leading the transition towards software defined vehicles (SDV) in India. Tata Motors added that it plans to 'converge' its cost structure for EVs with ICE engine and deliver positive EBITDA.
Tata Motors - leader in the electric space - has been losing market share over the past one year on increasing competitive intensity, which knocked down the EV market share to 35% in May 2025 as against 66% a year ago. New lauches by Mahindra and Hyundai Motor have helped rivals bridge the gap, along with a JSW-MG Motors’ Windsor, which took the company's market share to 31% in May 2025 from 19% a year ago. Tata Motors is now pinning hopes of recently launched Harrier EV to regain market share.
On car sales, the management sees muted demand growth going forward, with the shift to SUVs continuing, amid a highly competitive environment. Tata Motors added that the uncertainty around the global trade environment may continue to induce added volatility into the business. Tata Motors said it will double-digit EBITDA margins and positive free cashflow in the passenger vehicle segment, going forward.
Tata Motors cited a moderation in demand as having impacted its profitability in FY25, along with rising competition in the SUV segment, and an inflationary trend in commodities and currencies. For this fiscal, the management continues to see muted demand growth and inventory with dealers could stay high. In order to survive the competitive intensity, Tata Motors said it will continue to rely on its SUV portfolio, with a planned launch of Tata Sierra in H2FY26. However, global trade uncertainties could results in continued volatility in FY26, it added.
Read More: Tata Motors pins hope on new EVs, stronger demand to lead FY26 comeback
The management added that its aftersales transformation initiatives have resulted in significant improvement, with a 21 percent improvement in same-day service metric, and a 25 percent drop in vehicles needing multiple workshop visits.
The FY26 capex has been projected to be in-line with what the company spent during FY25.
The management has assigned July 1, 2025 as the date for the demerger of CV business and amalgamation of TMPVL into Tata Motors. Between September and December this year, the car company is hoping for the final NCLT approval for the demerger, which will see the existing listed company to trade ex-CV business, and Tata Motors will be renamed as TMPVL, and the new CV company will be separately listed subsequently.
Shareholders and analysts will next be watching for the FY26 guidance and updates at the JLR Investor Day on June 16, 2025.
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