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Mumbai, April 10
Tata Motors, India’s third largest manufacturer of passenger vehicles, said it is open to having partners in both of its subsidiaries that makes battery electric vehicles and regular engine-powered cars and SUVs, as it looks to maintain its growth trajectory by tapping new technologies.
The Mumbai-based company, which recorded a trend-defying growth last year in the segments that both the subsidiaries operate in, wants to stay ahead of the curve as its rivals prepare to make significant investments in tune for the future market shift.
When asked in an interview to BusinessLine if Tata Motors is looking for a partner in the electric vehicle company, Shailesh Chandra, Managing Director of both the Tata Motors’ subsidiaries said, “We are open to (having a partnership in) PV (passenger vehicle) and EV (electric vehicle) both because both are disrupted by the same new technology.”
The EV subsidiary, Tata Passenger Electric Mobility (TPEML), saw the financial participation of TPG Rise Climate and ADQ who have agreed to pump in Rs 7,500 crore in two tranches in exchange of a stake ranging between 11-15 percent. This transaction which was executed in October, 2021, gave TPEML a valuation of $9.1 billion.
“TPG is a strategic partner with a lot of knowledge,” Chandra added. Tata Motors ended FY22 with a share of more than 85 percent in the passenger EV category based on just two models, Nexon EV and Tigor EV.
The company has committed to having a total of 10 EV launches in five years including those which will be based on a born-electric platform. Its existing offerings are essentially petrol/diesel-powered cars converted to battery electric. The next phase of product offerings will see the company introduce electric vehicles with an option of petrol/diesel powertrains. The company has planned an investment of Rs 15,000 in five years to execute these plans and meet its ambitions.
Passenger Vehicle company
In 2020, Tata Motors had announced plans to seek a partner for its PV business unit even before it hived off the vertical into a separate company. Disruption caused by the Covid-19 pandemic and added focus given to the electric vehicle business meant that the plans to find a partner for the PV business took a back seat.
Chandra clarified that Tata Motors does not find itself in a desperate situation presently with regards to finding a partner and that it is ‘waiting for a good opportunity’ to arise. The hive-off of the PV unit called Tata Motors Passenger Vehicle came into effect from January 1, 2022.
“We are still not in a hurry. We are able to bring the right technology and products are doing good but there are certain areas where partners can become a force multiplier. When that kind of a situation comes, we will actively look for a partner but today there is nothing of that nature visible. There are desperate times when you need a partner but we are not in that situation. We are just waiting for a good opportunity to come along,” Chandra added.
Tata Motors and Germany’s Volkswagen Group were engaged in a five-month discussion in 2017 for exploring a tie-up for products and technologies. The deal, however, fell through after both companies realised that the envisioned areas of partnership may not yield the desired synergies as originally assessed.
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