Tata Motors targets five-fold rise in electric vehicle sales by FY24
Tata Motors is eyeing a 5x growth in sales of electric vehicles (EVs) from the current levels by the end of 2023-24, the automaker’s chairman N Chandrasekaran told the shareholders at the 77th Annual General Meeting (AGM).
“We are determined to increase our EV sales at a very significant rate. Our target is to cross 50,000 cars this year and 100,000 cars next year. We are on an aggressive growth path,” said Chandrasekaran, answering a shareholder’s question on the company’s EV targets.
EVs currently account for 7.5 per cent of the company’s passenger vehicle sales. The company envisages this to go up to 50-60 per cent but it would take time, he added. Tata Motors expects its overall passenger vehicles sales (including EVs) to cross 500,000 units this year. It sold 370,372 units in FY22.
Even as the company pursues its EV-related goals aggressively, safety is a very important element, the chairman stated. In response to the company’s findings regarding the recent e-Nexon fire, he said it’s a one-off incident and Tata Motors has formed a dedicated team to look into it.
“The fire incident is a one-off. We have formed team to find out why it occured. We want to go to the root of the problem. Once we find out, we can communicate in a transaparent manner. We are very determined to ensure that such incidents don’t happen and we are absolutely safety proof in our products,” he said.
The market leader in EVs in India has seen its volumes rising steadily annually—from 1,000 units in FY20 to 5,000 in FY21, and over 19,500 in FY22, driving the e-mobility almost single-handedly with its e-Nexon and e-Tigor models. It has sold 18,378 EVs in the first half of 2022.
This is even as other carmakers have been relatively slow in embracing the transition citing an underdeveloped charging infrastructure, high battery costs and range anxiety to name a few.
The TPG Rise-backed Tata Passenger Electric Mobility (TPEM), company’s subsidiary has made a commitment to invest $2 billion in the EV sector over the next few years and have ambitions to be a global player.
Underlining the commitment to get to net zero emissions (Scope 1, 2 and 3) by 2039 for JLR, 2040 for passenger vehicles (PVs) and 2045 for commercial vehicles (CVs), he said a clear road map is being drawn and several actions are already underway to deliver the same.
“The shift to sustainable mobility is irreversible and the group will be among the leaders of green mobility globally,” Chandrasekaran said in his opening address to the shareholders.
He also assured an aggrieved shareholder that “it will soon become a dividend-paying company.” He attributed the non-payment of dividend to the accumulated losses. Tata Motors last paid dividends in FY14.
The owner of Jaguar Land Rover reported a net loss of Rs 11,441 crore in the last fiscal year (FY22) as the company’s UK subsidiary battled various odds, including a semiconductor shortage and a Covid-induced lockdown in China.
Despite the headwinds, Chandra re-iterated that the company is on track with its target of becoming a near zero debt company by 2024.
He said the move of bifurcating the company’s businesses into separate entities has paid off well and made it leaner and more customer-centric. “Each of these businesses are now self-sustaining which gives me greater confidence to reiterate that we will get to near zero net automotive debt by FY24, a timeline I had announced/committed in my address at the last AGM.”
Tata Motors Group is now operating as three independent business units, comprising commercial vehicles, passenger vehicles and Jaguar Land Rover. This has helped the units offer a distinct and differentiated value proposition to their different customer segments while leveraging backend and corporate synergies wherever possible, he said.
With the gradual improvement in availability of semiconductors and the stabilising of commodity prices, Chandrasekaran said he expects the second half of the current fiscal year to be better than the first. He pointed out that Tata Motors is working on optimising the use of semiconductors in the vehicle architecture.