The Tata Group has stepped up its ambitions in the field of electric vehicles (EVs) with the creation of a new company which will manufacture batteries and cells.
Sources said the new company, Agratas Energy Solutions, is directly managed by Tata Sons, the Tata Group’s main investment holding company. Tata Motors’ two top executives – PB Balaji, chief financial officer, and Thomas Flack, chief purchasing officer – serve on the new company’s board of directors.
A letter sent to Tata Sons requesting details of the new company’s business plans remained unanswered at press time. A senior executive from one of the Tata Group companies, however, confirmed the formation of the new company.
A factory to manufacture battery cells for electric vehicles bodes well for Tata Motors, as it will eliminate the company’s reliance on third-party suppliers based in China and South Korea. These are often exposed to geopolitical tensions, supply chain disruptions and spikes in demand from competitors.
Last year, Tata Chemicals, the company that experts who follow the group believe would lead battery projects for electric vehicles, said it was not interested in entering the space. However, Chairman N Chandrasekaran had added that the company would continue to supply key components for the manufacture of batteries for electric vehicles.
According to earlier reports, the Tata Group is also exploring the idea of setting up an electric vehicle battery factory in the UK or Spain to support plans to electrify British luxury units Jaguar and Land Rover. The UK government has offered £500m in grants to build a battery factory in the UK for the group.
In 2021, Tata Motors set up a separate electric vehicle company called Tata Passenger Electric Mobility, where it provided $1 billion in external financing from TPG and Abu Dhabi’s state-owned holding company ADQ. which earned him a valuation of $9.1 billion. Tata Motors has pledged to invest more than $2 billion in its EV business over five years.
Tata Motors is already the market leader in the electric passenger vehicle space with a market share of over 85% and is among the major players in the electric utility vehicle category, where it owns buses and small trucks. .
Tata Group’s plans to enter the electric vehicle battery cell manufacturing business align with those of other players who have recently pledged to secure the supply chain for their electric vehicle projects.
Suzuki Motor Corporation, the market leader in passenger cars, the parent company of Maruti Suzuki, is committed to becoming the market leader in electric vehicles in India. Maruti Suzuki is expected to launch its first electric vehicle in 2024 and its battery cell manufacturing plant will be completed by 2026.
Korean car giant Hyundai has announced the establishment of a battery assembly unit in Tamil Nadu, which will have a capacity of 178,000 batteries per year. This will support its plans to have six electric vehicles in India by 2028.
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