The TPG Rise-backed firm will also commence making internal combustion engine (ICE) models and EVs at its Sanand plant in 2024 as part of Tata Motors’ plans to clearly bifurcate the ICE and EV business, the company’s top executive said.
TPEML acquired Ford India’s Sanand plant in August 2022 and completed the acquisition in January 2023 for Rs 725.7 crore. The Sanand plant has a manufacturing capacity of 3 lakh units per annum is scalable to 4.2 lakh units per annum.
“The Sanand 2 plant will get operationalized next year. As far as the channel separation is concerned, we will not have a big bang approach—we will go city by city. It would see a micro-market based approach going one by one so that we are able to stabilize,” Shailesh Chandra, managing director Tata Motors Passenger Vehicle and TPEM, told ET.
The first two EV exclusive outlets are coming up in Gurgaon. They are likely to get operational by March 2024, said a person aware of the company’s plans. Tata Motors overall line-up of models, both EVs and ICE, will go up substantially making the separation of sales channels inevitable.
Tata Motors sold 37,961 EVs in the first fiscal half of FY24, up 76% y-o-y, and envisages sales to touch 100,000 units by the end FY24. The share of EVs in its total passenger vehicles sales rose to 8.77% in FY23 from 5.12% in FY22. It stood at 13.58% in H1 FY24.The maker of Tiago.ev and Nexon.ev models leads the EV market with a shareof 75% and is set to launch the electric Punch by the Q4 of the current fiscal. It would be followed by the electrified version of the Harrier SUV next calendar year and a few more in the subsequent months.With the EV market in India being in a nascent phase and charging infrastructure still under-developed, the risks associated with the move is not lost on Chandra.
“Separation is not an easy job. There’s a gain and there’s a loss because we have a network of 1400 outlets,” he said. Hence the company has chosen to move ahead in a phased manner and have a “micro-market” approach. It will also have a hybrid dealership— a differentiated EV dealership within the main one where it sells the ICE, he added.
With the help of a subsidy grant from the government under the FAME II scheme will help the oil marketing companies achieve their mission of setting up 22,000 EV charging stations across the country by 2024. “If the charging infra targets are achieved, it would unleash the true potential of EVs in the country,” said Chandra, adding that the importance of charging infrastructure cannot be downplayed.
Meanwhile, the erstwhile Ford facility, TPEMLhas been working on re-configuring to make existing and future platforms and will get operationalized in 2024, said Chandra. “We see manufacturing facilities as common assets,” he added, commenting on the production plans.
Currently, Tata Motors’ existing facilities in Sanand and Pune are under Tata Motors Passenger Vehicle, which makes ICE models. The upcoming second unit belongs to TPEM. In addition to making EVs it would also do contract manufacturing for ICE. To begin with, it will make ICE and going ahead, it’s intended to do more EVs.
“It will be more-EV biased eventually,” he stated.