Ask an Indian to name an automotive company with a remarkable blend of style and innovation. You will get the same answer. Tata Motors! How? You may ask. Established in 1945, Tata Motors is an integral part of the billionaire Tata Group Conglomerate. It was founded by Jamsetji Tata in 1868.
Since then, it never fell short of our expectations!
Now at a time when we all are combating climate change, Tata participated too. How? Through Tata Group’s biggest bets on Electric Vehicles (EVs). Really? Yes! It aims to build over 1 lakh electric vehicles in the upcoming 12-18 months. Wow! Sounds quite ambitious. Isn’t it? Well, its big EV ambitions are not limited to this. There’s a lot more in Tata’s EV plans!
Are you curious to look into it? If yes, then stick to this write-up and you will get detailed info on it.
Story So Far
Let’s begin with the market sensation that Tata made with its EVs ambitions. In FY22-23, Tata hit the milestone of 50k annual EV sales which constituted 12% of its portfolio. Yeah! That’s great. Now here comes its aspiring plans. It has set a target to make EVS account for over 50% of its portfolio by 2030. Wait… What? 50%? This means, Tata Group will dedicate over half of its portfolio to EVs. Yes. You’re right!
Jaguar Land Rover- a division of Tata Motors has taken responsibility to achieve the conglomerate’s EV goals. It is going to invest over 15 billion pounds in the Indian market over the next five years. Do you know it has a long queue of EV models?
It is planning to increase the production of the following exclusive electric cars in India in the coming two years, namely-
- Nexon EV Max
- Tigor EV
Now let’s look from the perspective of consumers. Will we be able to afford it? If its price is sky-high, then sadly the majority of the Indian population will be deprived of the benefits of EVS. But that’s not going to happen. Why? You may ask.
All thanks to our governmental policies that will not only encourage you to go for EVs. But also make you a significant contributor to the conservation of the environment. Puzzled? Well, let me describe it in simple terms.
The Indian government is providing lucrative incentives to promote the adoption of EVs. It includes subsidies and Tax breaks. Also, Tata Motors is manufacturing EVs in India which will reduce the overall cost of EVs. Thus, it will be more affordable for us!
Key Strategies: How will Tata Achieve its EV Target?
By now you must be having a query. Are the indigenous production of EVs and governmental support enough for Tata to achieve the EV target? Honestly, no. These two factors may give some enthusiasm to the company but not enough to execute the ambition. So how will Tata achieve its big EV ambitions?
Through the following key strategies to win Tata Group biggest bets-
(1) Increasing the production capacity
The first and foremost step to becoming a dominant player in the Indian EV industry is to increase production capacity. Look at the following table that represents the expectation for Tata Group-
|Particulars (Tata Motors)||Current Scenario||Expectations|
|Electric Vehicle Shipments||400-500 units||8000-10,000 units|
|Annual Production of EVs||55,000-60,000 units||1 lakh units|
|Income from EV Sector||Rs.5,000 crore||Rs.12,000-15,000 crore|
So, how will it land on its expectations? By increasing the production capacity. How? Through Gujarat. Yes. The Gujarat gigafactory will ensure the seamless production and supply of Tata EVs.
Do you know what is the core of EVs? Its battery! If you can manufacture Lithium-Ion batteries for EVs, then half of your problem is solved. And Tata Motors is going to set up a lithium-ion cell manufacturing unit in Gujarat with the help of its subsidiary company. You will learn about it in the next para. Thus, it will boost the production capacity of Tata Motors’ electric vehicles. It will help to win Tata Group biggest bets on electric vehicles.
The automaker is looking forward to localizing 85% of its electric vehicles in the next 3-4 years. Eventually, this step will reduce the EV’s component costs by 15%. Also, it is planning to invest heavily to develop a humongous charging infrastructure pan India.
Also, it is planning to spend over 50% of its capex on green technologies. Thus, it will be a bigger player among eco-friendly companies.
(2) Indigenous Manufacturing of Lithium Ion Cells
Here comes the role of Agartas Energy Storage Solutions. It is the lithium-ion cell manufacturing subsidiary of Tata Group. It is a key player that will help Tata to achieve its EV ambitions. This is the key step of Tata Group biggest bets on EV. So, here’s how it will work. In June 2023, Tata Group announced plans to set up Lithium-ion cell manufacturing in Gujarat. The whole investment is worth Rs.13,000 crore.
Agaratas Energy signed a MoU (Memorandum of Understanding) with the government of Gujarat to build that gigafactory. Can you guess its production capacity? It’s 20 gigawatt hours.
With this new gigafactory, the company is aspiring to be the leader of the indigenous EV battery manufacturing industry. It has three objectives in the battery manufacturing sector-
- Cell Design
Apart from that, Tata Motors is determined to achieve the following aims-
- Aggressive localization
- Drive Cost Reduction
- To benefit from PLI (Production Linked Incentive) Schemes
All these objectives are interlinked with one another.
(3) Other Strategies
Tata Motors is a visionary group. It works on some of the ever-green strategies that do not help the overall growth of the brand. But also provides golden opportunities for its upcoming products. Tata Motors is confident to achieve its EV target because of the following effective strategies-
- Brand Value: When you aren’t a technophile, what do you do to buy a tech-related product? You go for the most reputed and trustworthy brand. Right? That’s the same case with Tata. It is the most trusted brand in India and has a loyal customer base. Thus, its consumers always welcome its new technologies with an open heart!
- A broad network of dealers: It has a large network of dealers throughout the country. Thus, it simplifies the purchasing process of EVs for customers.
- Exclusive Product Portfolio: Tata has never disappointed us in its innovation and product portfolio. The Tata EVs are well-designed with exclusive features. Also, it comes in an affordable price range. Such innovations give a competitive advantage to Tata Motors.
Tata Motors is going forward aggressively and strategically to become a leading player in the EV market of India. This was one of the Tata Group biggest bets. Its strategies are quite effective and well-positioned with which it will reach the target to increase the portfolio of EVs by over 50%. It has started to see the results too! Tata Passenger Electric Mobility’s sales increased four times during the current fiscal year. In 2021, 4,429 units of this vehicle were sold and now, the sales increased to 20,805 units.
Thus, you can say, Tata Group’s biggest bets and ambitious plans on EVs for India will give promising results!