Tata Motors invests $2 billion in EVs after raising from TPG

Texas News Today

File photo: The Tata Motors logo is pictured outside the company’s showroom in Mumbai, India on February 5, 2018. Reuters / Danish Siddiqui / File photo

13 October 2021

Aditya Shah

NEW DELHI (Reuters) – Tata Motors announced that it will invest more than $2 billion in its electric vehicle (EV) business over the next five years, after an Indian automaker announced that it has raised funding from private equity firm TPG. has collected.

Tata Motors had earlier said that TPG’s Rise Climate Fund and Abu Dhabi-based state holding company ADQ have agreed to invest about $1 billion to expand the company’s EV business, which forms an independent entity.

According to Tata, TPG and ADQ own 11% to 15% of the new EV unit and are valued at around $9.1 billion. The unit will invest in new models, dedicated battery electric vehicle platform, charging infrastructure and battery technology.

The goal is to “lead EV charging in the market,” Shiresh Chandra, head of passenger car business at Tata Motors, told reporters in a “carbon-free world” to reach that goal. He said he plans to work with focused investors. “

Shares of an Indian carmaker, which owns British luxury brand Jaguar Land Rover, rose nearly 20% in trading on Wednesday morning, hitting its highest level since February 2017.

It provides clean mobility at a time when global automakers such as General Motors, Volkswagen and Toyota are accelerating EV adoption and spending billions of dollars to counter China’s dominance of the region. This is the first large-scale financing promotion by an Indian carmaker.

Furthermore, Tesla, the world’s largest electric vehicle maker, is preparing to launch a car in India and is urging the government to reduce the EV import tax.

Consulting firm AlixPartners said in June that investment in EVs globally could grow to $330 billion by 2025, up from about 2% of EV sales today by 2030. It is estimated to account for about a quarter of the world’s total automobile sales.

India aims to account for 30% of total sales of electric vehicles by 2030, from less than 1% today. To achieve that goal, the government has launched several incentive schemes, including setting up a local battery manufacture.

Tata Motors will dominate EV sales in India with its electric SUVs Nexon and Tigor compact EV, with 10 new electric models to be launched by 2025. However, some automakers, including India’s largest Maruti Suzuki, are yet to enter the segment.

Tata also has the advantage of working with other group companies like Tata Power, Tata Chemicals and Tata Autocomp to build the EV ecosystem.

JP Morgan and Morgan Stanley advised Tata Motors and Bank of America advised TPG.

(Reporting by Aditi Shah, edited by Jane Merriman and David Gregorio)

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