As per the latest media reports, Tata Motors is all set to invest Rs. 15,000 crores in the electric vehicle segment. This investment will be made to produce at least 10 electric cars or SUVs for the Indian car market. It is worth noting that EV adoption has risen in India over the last five years with the implementation of new policies by the Centre government.
The Indian government renewed the FAME II scheme to encourage electric vehicle purchases by offering subsidies. Tata Motors' strategic focus on EVs coincides with investors’ push to promote ecologically beneficial firms.
Tata Motors presently offers only two electric vehicles, the Nexon EV and the Tigor EV. These have a monthly demand of around 3,000 units. However, Tata can only produce 1,000 units each month. The increased investments will not only help to increase the manufacturing of existing EVs but will also aid in the introduction of new EVs.
The new business, temporarily named EVCo, will not have its own production facilities and will instead rely on its parent company to bring out new electric vehicles. Tata Motors' manufacturing capacity will be offered to the EV company on a "toll basis." It has also been announced that the new EV brand would have access to Tata Motors' existing passenger car capacity.
The homegrown manufacturer is not trying to build EVs based on new born-electric platforms, but rather on existing platforms such as ALFA (Altroz, Punch) and OMEGA (Harrier, Safari). The Ziptron powertrain technology underpins Tata's current EV portfolio, which includes the Nexon EV and Tigor EV, and is expected to appear in future EVs as well.
Tata Motors has also stated that it intends to produce completely electric vehicles. Hybrids have also been ruled out since they do not assist manufacturers to fulfil CAFE standards. Furthermore, because the Government of India does not consider hybrids to be EVs, they are not eligible for any tax breaks provided as part of the FAME II legislation.