Deal. TPG arm to invest ₹7,500 crore in Tata Motors’ EV subsidiary

American investment firm TPG will invest ₹7,500 crore in Tata Motors’ newly created electric vehicle subsidiary, TML EV Co.

The investment is being done through TPG Rise Climate, a dedicated climate investing platform, in compulsory convertible instruments for a 11-15 per cent stake in the new company.

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Investment in tranches

The investment will be done in tranches, over 18 months. The first round of capital infusion will be completed by March 2022 and all the funds will be in by end of 2022. The investment pegs the valuation of the new company at $9.1 billion. TML EV Co will own and develop all future IPs of Tata Motor’s EV business.

“The new company shall leverage all existing investments and capabilities of Tata Motors and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies,” said a press statement.

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Over the next five years, this company will create a portfolio of 10 EVs and, in association with Tata Power, catalyse the creation of widespread charging infrastructure to facilitate rapid EV adoption in India. Tata Motors is bullish about the EV segment, having sold over 10,000 Nexon EVs since its launch.

Major EV plans

TML EVCo will also invest over $2 billion (₹16,000 crore) in the next five years in products, platforms, drive trains, dedicated EV manufacturing, charging infrastructure and advanced technologies. Other targets for the company include increasing options to access Tata EVs with subscriptions. EV subscriptions will enable wary customers try the technology by subscribing to the product before buying. Other targets include building a centre of competence and localisation of automobile components.

Will create EV ecosystem

N Chandrasekaran, Chairman, Tata Motors, said, “We will continue to proactively invest in exciting products that delight customers, while meticulously creating a synergistic ecosystem.”

Jim Coulter, Managing Partner, TPG Rise Climate and Founding partner of TPG, said: “There is significant momentum around India’s EV movement, supported by the government’s vision and policies, as well as growing consumer demand for greener solutions. The investment aligns with TPG Rise Climate’s focus on decarbonised transport and builds on TPG’s long history in India.”

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