TVS Motor to set up new electric vehicle company, add new EVs

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TVS Motor Company is pushing the pedal further in the electric vehicle (EV) space as its board has given the nod to set up a new company for the electric mobility business.

The move follows rival Bajaj Auto which is also setting up a new subsidiary that will house electric and hybrid vehicle business including Chetak, its first all-electric product.

The board approved the incorporation of a wholly-owned subsidiary to undertake its electric mobility business, TVS said in a statement on October 21 while announcing its July-September quarter financial results. TVS has already set up an EV-dedicated team with over 500 engineers housed in a separate vertical.

K N Radhakrishnan, Director and Chief Executive Officer, TVS Motor Company said in an earnings call, “We are investing more than Rs 1,000 crore to create a portfolio. This will be in addition to the iQube. Very shortly we will see new EV products coming in. This subsidiary will give us the flexibility and freedom to scale up the business. We will look at global markets – developed and developing – under this strategy.”

Presently, iQube is the only all-electric product in the market from TVS. In September, the Chennai-headquartered company picked up 80 percent stake in a Swiss company EGO Movement for $17.9 million. EGO Movement is a Swiss technology company providing a wide range of mobility solutions through a portfolio of e-bikes, e-cargo bikes, and e-scooters.

TVS has lined up capital expenditure (capex) of Rs 750 crore for FY22 which is Rs 150 crore more than the Rs 600 crore planned earlier.

K Gopala Desikan, Chief Financial Officer, TVS Motor Company said, “We have invested Rs 500 crore in the first half and there will be another Rs 250-300 crore in second half. The investments will be made in EVs and (other) products. So far, we have invested Rs 140 crore in EGO (Movement), Rs 100 crore in TVS Credit and Rs 120 crore in Norton.”

TVS’s first all-electric scooter, iQube was launched in January 2020. The battery-powered scooter with a range of 75 km is available in New Delhi, Chennai, Pune, Coimbatore, Kochi and Bengaluru which are part of the 33 cities roll out. The company is struggling to ramp up production like the rest of the industry because of shortage of parts.

Rival Hero MotoCorp is also stepping on the accelerator in EVs with a committed launch in the final quarter of FY22.