According to a top Tata Motors executive, sales of electric vehicles in the local market are predicted to increase tenfold over the next five years, but they will fall short of the government’s earlier objective of 30% of new car sales.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Motors Electric Mobility, said, “We took a realistic call basis where the state of ecosystem development is. Electric vehicles are likely to account for 20% (of new cars sales in the industry). We are targeting 30-40% of our sales to come in from electric by FY30.”
The company – which dominates electric car sales in the country – had earlier estimates as much as half of its of its volumes to come in from EVs in this period.
Tata Motors will invest Rs 16,000-18,000 crore into its electric vehicle business to strengthen portfolio and develop an ecosystem for these vehicles, Chandra said.
Overall, it expects the mix of CNG and EVs to increase, and its market share in passenger vehicles to rise to 18-20% in this period compared to 13.9% in FY24.
Chandra informed, “We will look at increasing our addressable market. Currently with seven products, we are addressing 53% of the market, and in our addressable market we have a 26% market share. We aim to increase our addressable market to 80% by FY30.”
This will include new nameplates or model launches, as well as upgrades of existing products. Over the next two years, the company has scheduled for launch Curvv EV, Curvv ICE ( internal combustion engine) and Sierra EV.
Separately, Tata Motors Group CFO P Balaji said, “the proposed demerger of Tata Motors’ commercial vehicles business will allow the two resultant companies to better focus on their growth strategies. The commercial vehicle business, which has so far been the cash engine of Tata Motors, will after the demerger be able to invest its cash flows towards its own strategic goals”.
Meanwhile, the passanger vehicles (PV) business, which has only recently become self-sustainable, will focus on achieving 10% EBITDA (Earnings before interest, tax, depreciation and amortisation) margins across its combustion engine and electric vehicle segments. Jaguar Land Rover will remain with the passenger vehicle arm, and is expected to become debt free by the next year. The demerger of the commercial and passenger vehicle business is expected to be complete by the first quarter of the next fiscal year.
Girish Wagh, Executive Director, Tata Motors Commercial Vehicle, said the business is expected to perform well over the next five years driven by rising disposable income in the country, government spends on infrastructure and measures being undertaken to ensure a larger play of the manufacturing sector in the GDP, which would lead to more movement of both freight and passengers.