India is pursuing Make In India electric vehicles/new energy vehicles (EV/NEV). EkaLore has previously looked at the opportunities, and problems, of launching volume production of EV’s in India. Tata Motor’s EV platforms are a candidate for a national-champion brand. The initiative continues Tata’s vehicle ambitions and represents a large investment for the tech enterprise.
Challenges with many aspects of Tata building a high-volume electric vehicle remain unresolved. Tata Motors wishes to become an export enterprise even as fundamental supply chain and technology choices see continuing investment.
Tata Motors is building capacity to sell in export markets as well as India. Announced plans run to 80000 to 100000 vehicles in the current fiscal year (thru 31/3/2024). This is a high unit volume when context of FY2022-2023 sales of 50043 EV’s. Alien Invaders will come to wrest away Tata’s marketshare of 90% of EV’s in India. The FY2022 market for EV/NEV was reckoned at 1-3% of 3M total units. BYD and Tesla are the most frequently mentioned new manufacturers competing to enter the market now dominated by traditional Indian brands. BYD has begun selling in India at very low unit volumes. Tata also intends to export the vehicles to global markets (likely excluding China and Taiwan).
Tata Motors has received investments from the USA-based TPG hedge Rise Climate Fund, and the Abu Dubai ADQ (State Holding Company), totaling over USD$1B (11-15% of equity value) with an estimated equity value of USD$9.1B. Overall Tata has announced plans to spend USD$2B on developing EV/NEV platforms by 2026 for the design, development, manufacturing engineering, and support sales. The full extent of subsidies from the Indian State and Federal Governments are not yet clear.
The challenges are identified for all EV/NEV manufacturers who will operate more intensively than knock-down kits seeing final assembly in India. Tata is investing ~USD$1.58B in a lithium-ion battery plant to be built in Sanand, Gujaret, to provide a domestic supply. In the UK, Tata is partnered with Jaguar-Land-Rover in a commitment to build a plant to supply 500000 vehicles of batteries at a cost of ~USD$5.1B. The challenges are illustrated by the UK plant, to see startup by 2026, still seeking technology and manufacturing process designs to be deployed. A key to plant location in the UK was the availability of renewable power in suitable capacity. The same challenges will be seen in the scale-up process for the Gujaret plant. Securing supply-chains for the raw battery materials, semiconductors, and power electronics at scale are still works-in-process. Tata is optimistic on its capabilities to scale up production even as traditional global manufacturers struggle to build at scale on an economic basis.
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