Tata Motors’ new electric vehicle company won’t have any manufacturing plants

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26 Aug, 2025 12:21

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The new electric vehicle (EV) company of Tata Motors will not own any manufacturing plants but will instead rely on the passenger vehicle factories for output and remain asset-light.

Valued at $9.1 billion which is nearly half of Tata Motors' market cap by the end of October 12, 2021, the yet to be named EV company will build an own all future intellectual property (IP) rights for EVs but will refrain from setting up factories of its own.

Replying to a query from Moneycontrol, PB Balaji, chief financial officer, Tata Motors said, “The manufacturing capacities of passenger vehicle (PV) will be available on a tolling basis to the EV company. The EV company will not have any asset or any capacity for itself within the company but it will have the access to the PV capacities already created.”

The PV business will benefit from the fees paid to it by the new EV company for using its brand and IP. These arrangements will be done on an arm’s length basis.

Tata Motors’ current generation products like the Nexon EV and Tigor EV will continue to be manufactured from their current locations. “The EV company will have the ability to leverage the manufacturing capacity of PV. It will be an asset-light company,” Balaji added.

TPG Rise Climate is the lead investor in the fund-raising programme that Tata Motors announced on October 12. ADQ will be the co-investor. The new investors will hold a maximum of 15 percent in the new EV company.

The EV unit has plans to have 10 products by FY26 which will be a mix of different body styles and different drive ranges. Tata Motors is the leader in the passenger EV segment with a market share of 71 percent. The company is clocking more than 1,000 units in sales of EVs every month. During FY21, the company had clocked revenues of Rs 500- Rs 600 crore in the EV business.

The Mumbai-based company; however, clarified that the commercial vehicle division’s EV vertical will not be a part of this deal. But the CV division can draw technology from the new EV company after paying royalty.

“When the commercial vehicle EV business, the buses, for instance, will be outside of the perimeter of this transaction. This deal is squarely focussed on PV under the Tata brand name. If there is anything that the CV business wants to use in terms of technology then there will be a simple royalty agreement on an arm’s length basis,” Balaji added.