Tata Motors to raise $1 billion to push EV play

Tata Motors to raise $1 billion to push EV play

The proposed fund-raise will value Tata Motors’ electric vehicle unit at $8 billion and has attracted multiple private equity funds from the US, Middle East and Southeast Asia. TPG, California Public Employees’ Retirement System, Temasek, among others, have held conversations to lead or co-lead the financing exercise, sources told TOI.


Tata Motors to raise $1 billion to push EV play

Tata Motors is in advanced stages to raise $1 billion through a stock sale of its electric vehicle unit as it accelerates transition to plug-in cars.

The proposed fund-raise will value Tata Motors’ electric vehicle unit at $8 billion and has attracted multiple private equity funds from the US, Middle East and Southeast Asia. TPG, California Public Employees’ Retirement System, Temasek, among others, have held conversations to lead or co-lead the financing exercise, sources told TOI.

A Tata Motors spokesperson said the company was unable to offer any response regarding the fund-raise.

In fiscal 2021, electric vehicle sales were just 2%. The investment would come into Tata Motors’ step-down electric vehicle arm, which plans to have at least 10 electric car models by 2025.

Currently, Tata Motors has three electric car models, Nexon, Tigor and Xpres T sedan. It may also look to launch an electric SUV called Punch. Nexon is currently the top seller in India’s electric passenger vehicle market with sales of more than 7,000 units since its introduction in January 2020. In fact, Chandrasekaran too got himself a Nexon in August 2020.

Tata Motors currently commands around 70% of the electric four-wheeler space. Tata Motors has been leveraging sister companies’ strengths — Tata Power (charging infrastructure), Tata Chemicals (battery cells), Tata Motors Finance (financing) and Croma (retail) — to boost its electric vehicle play.

Tata Motors rival Ashok Leyland too had hived off its electric vehicle division into a separate entity, called Switch Mobility, which focuses on electric commercial vehicles in India and globally.

In a Chennai International Centre organised virtual conference on Thursday, Mahesh Babu, CEO, Switch Mobility India, said legacy OEMs like Ashok Leyland are trying out the structure of having their electric business as a separate entity so that it is nimble like a startup but has the systems, processes and experience backup of the mother company as well.

Tata Motors to raise $1 billion to push EV play