TPG Rise Climate and Tata Motors have signed a definitive agreement in which the former, together with co-investor ADQ, will participate in a newly formed Tata Motors subsidiary.
An investment of Rs 7,500 crore will be made by TPG Rise Climate in mandatory convertible instruments to achieve an 11 percent to 15 percent interest in this company, equating to a $9.1 billion equity valuation (Rs 67,349 crore).
The new firm will make use of Tata Motors’ existing investments and skills while also channelling future investments into electric vehicles. Specific BEV platforms, sophisticated automotive technologies, and charging infrastructure and battery technology. In collaboration with Tata Power, this business will develop a portfolio of ten electric vehicles over the next five years. And catalyze the development of nationwide recharging stations to support rapid EV rise in India.
The first round of capital injection is projected to be finished by March 2022, with the remainder invested by the end of the year.
In the next five years, Tata Motors estimates that the EV business will require over $2 billion in investments. “PVs will be fund restricted to sustain the high EV objectives,” the business adds. To maintain a competitive advantage in EV, momentum must be maintained. EV technologies are still in the early stages of development, which makes them dangerous.”
Market supremacy requires a laser-like focus
Tata Motors is approaching its electric vehicle business in a strategic way, with a comprehensive product, network, and charging infrastructure offering. The automaker is making rapid progress in electric passenger vehicles, despite strong demand for its passenger vehicles. Tata Motors has a total share of 70% in the EV market this year. The Nexon EV has a 312km range and has sold over 7,000 units, is by far the best-selling electric PV in India. The Tigor EV, which was released on August 31 for Rs 11.99 lakh, has been added to the company’s lineup.
Tata also debuted the Xpres-T EV in mid-September, in response to increased demand from the fleet user category. The eco-friendly sedan has an optimal battery size and a captive fast charging technology. Both of which are designed to offer a low ownership cost to mobility services, business and government fleet customers.
Tata Motors also benefits from Tata Power, India’s largest power producing firm. It operates a network of over 700 public chargers, 7,000 AC slow chargers, and over 150 captive charging points across the country.
Tata Motors is launching Project Helios, with the goal of “expanding its portfolio of supplying India-specific products with various body shapes and driving ranges (10 EVs by FY2026)”. It also intends to move away from conversion EVs and toward a flexible multi-energy platform.
On the network front, the company plans to grow beyond its current micro-markets (100+ cities, 255 touchpoints by April). It also wants to develop a subscription model for Tata EVs. As well as boost the level of localization of EV components (both Tier 1 and Tier 2). This will aid in cost optimization and pricing reduction. Many ICE vehicle buyers who want to switch to EVs are put off by the high initial expense.