TPG Rise Climate has decided to invest a seventh of its $ 7 billion corpus into Tata Motors. With this, the company is planning to invest Rs 15,000 crore in its EV business. The investment will happen over the next 5 years when the company will launch 10 new products. Tata said it would invest in new platforms, technologies and to further localise its EV vertical.
P Balaji, chief financial officer, Tata Motors said – “We have always been bullish about EVs but there is a definite surge in demand right now. A number of factors are helping it. Favorable policies both from centre and states, increase in fuel prices as well as ICE vehicles post BS VI emission norms are working in favor of EVs. We have seen a 1.5-2x growth every year between FY 2017 and FY 2021. In the current financial year alone the growth is projected at 2.5-2.7x. TML will not have a manufacturing facility of its own. Our capacities at Tata Motors will be available for EVco.”
With the investment from TPG, the valuation of the new dedicated EV firm will be at $ 9.1 billion (Rs 66,600 crore). For the moment, Tata is calling its new arm as EVco. This valuation is more than 7 times the valuation of its entire passenger vehicle business unit that the company had put at Rs 9,417 crore earlier this year.
Currently, Tata Motors has managed to achieve a localisation of 60 percent in its Nexon and Tigor EVs. By fiscal 2025, it plans to increase that to over 85 percent.