While the competition is focusing on singular parts of the electric mobility value chain, the Tata Group is chalking out a differentiated strategy to take on the market. The group is focused on building the entire-mobility ecosystem, rather than focusing only on specific aspects of the system.
Tata is probably the only vertically integrated Indian player in the space. The government’s supportive policies have increased the private players’ confidence, and have encouraged them to ramp up the investments in the sector. Several Tata Group firms have come together to enhance the sector.
The collaboration of Tata companies is in line with Tata Sons’ chairman N Chandrasekaran’s “One Tata” strategy with a focus on the 3S — simplify, synergise, and scale.
Here are the areas of the ecosystem it is working on:
Automotive Software And Technology
Tata Group companies such as Tata Consultancy Services (TCS), Tata Elxsi and Tata Technologies have been involved in the EV space for quite some time. These companies have worked with global automotive companies in the past, and therefore, have developed expertise in the space. In 2019, TCS had acquired General Motors’ technical centre situated in Bengaluru.
In addition, TCS had partnered with General Motors in engineering design projects. TCS had aided Tata Power in setting up of EV charging stations with its ChargeCore platform. The project saw 300 charging stations joining the network within 12 weeks, according to a TCS press release.
Similarly, Tata Elxsi helped build the platform for Tata Motors’ Nexon EV. Elxsi is also involved in e-vehicle testing space through hardware-in-the-loop-simulation. It offers functional testing, diagnostic tests, drive scenario, range verification and other services for EV manufacturers.
Vehicle Financing And Insurance
The Tata Group is involved in vehicle financing through Tata Capital and Tata Motors Finance. The businesses have partnerships with Tata Motors to offer their services to customers at Tata showrooms. These companies allow aspiring vehicle owners to avail low-cost loans and buy electric vehicles with ease. The insurance arm, Tata AIG, has launched comprehensive EV insurance policies for car buyers. The insurance regulator, IRDAI, has already asked companies to price EV insurance at a 15 per cent discount to general car insurance, as a means to incentivise EV adoption.
One of the biggest roadblocks to the adoption of e-vehicles is the lack of proper charging infrastructure on Indian roads. is offering different charging solutions for fleets, homes, housing societies, malls, and other areas. Under the initiative, it has built charging stations in more than 40 cities. An app for vehicle owners who wish to find nearby charging stations has also been released by the company.
According to reports, it has been looking to partner with oil and gas marketing companies to build charging stations at fuel pumps. Though India has more than 70,000 fuel pumps, a negligible number of such pumps offer electric charging. Tata Power aims to close the current financial year with 2,000 stations under its belt — and aims to build 10,000 over the next five years.
The newly-formed Tata Electronics is looking to enter the EV space through the development of hi-tech electronics components. The group has already announced its foray into the semi-conductor manufacturing space as the automotive sector faces a chip shortage expected to last until the next year. Tata Auto Comp (TAC), another group company, has tied up with Tellus Power Green to supply AC and DC fast chargers to Tellus’ stations. TAC will be a major partner for the EV production increase, and is expected to simultaneously work on the battery segment as well.
Tata Chemicals is looking to explore opportunities in the energy storage space. According to reports, the company has acquired 127 acres of land in Gujarat to develop a Lithium-ion manufacturing facility. The government has introduced a production linked incentive (PLI) scheme with Rs 18,000 crore worth of subsidies to incentivise lithium-ion battery production. The company has partnered with Indian Space Research Organisation (ISRO) to use its cell technology. In addition, it is also exploring opportunities in the battery recycling space. The company’s stock has tripled within a year, indicating the market’s optimism.
The greatest push for EV comes from Tata Motors, which has set up a separate subsidiary to conduct its EV business — Tata Motors EVco Limited. The new subsidiary commands a valuation of around $9 billion, and has roped in ADQ (Abu Dhabi Developmental Holding Company) and TPG Capital as investors. The two investors will invest around Rs 7,500 crore in the subsidiary.
It has developed a new technology for its EV initiative named Ziptron that powers its two EV launches — Expres-T and Nexon. The Tata Nexon EV was the highest selling EV in India in 2020. These cars have relatively higher value-for-money when compared to other cars available on the Indian market. Further, according to the company, it has 10 new EV launches, and investments worth Rs 15,000 crore, lined up for the next five years.
The Tata Group appears to be well-placed to benefit from the rise of electric vehicles. For Tata Motors, the segment could potentially revive growth as the company struggles with high-debt, slow car sales, and the loss-making Jaguar Land Rover business. The markets are certainly very positive about the company’s prospects as the stock has almost quadrupled within a year.
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