The owner of Jaguar Land Rover has raised $ 1 billion for its EV business for which it will form a separate unit.
Tata Motors will invest more than $ 2 billion in its electric vehicle (EV) business over the next five years, a company executive said after the Indian automaker announced a fundraiser from the company. TPG private equity.
TPG’s Rise Climate fund and Abu Dhabi state-owned holding company ADQ have agreed to invest around $ 1 billion to develop the company’s EV business for which it would form a separate unit, Tata Motors said in an exchange dossier on Tuesday.
TPG and ADQ would hold between 11% and 15% in the new EV entity, valuing it at around $ 9.1 billion, Tata said. The unit will invest in new models, platforms dedicated to battery electric vehicles, charging infrastructure and battery technologies.
“The goal is to lead the charge for electric vehicles in the market,” Shailesh Chandra, head of the passenger vehicle business at Tata Motors, told reporters, adding that to achieve its goals, the company will work with investors who focus on a “carbon-free world”. ”.
Shares of Indian automaker, owner of British luxury brand Jaguar Land Rover, rose nearly 20% on Wednesday morning to reach their highest level since February 2017.
Clean mobility boost
This is the first major fundraiser by an Indian automaker to promote clean mobility as global automakers such as General Motors, Volkswagen and Toyota Motor spend tens of billions of dollars to accelerate adoption of electric vehicles and counter the Chinese domination of the sector.
It also comes as the world’s largest electric carmaker Tesla Inc prepares to launch its cars in India and lobbies the government to reduce import duties on electric vehicles.
Investments in electric vehicles around the world by 2025 could total $ 330 billion, consulting firm AlixPartners said in June, adding that it expects sales of electric vehicles to increase by about one. quarter of total global vehicle sales by 2030, up from around 2% today.
India intends electric vehicles to account for 30% of total car sales by 2030, compared to less than 1% currently. To achieve its goal, the government has launched several incentive programs, including one for the establishment of local battery manufacturing.
Tata Motors leads sales in the emerging electric vehicle market in India with its Nexon electric SUV and Tigor compact electric vehicle, and plans to launch 10 new electric models by 2025. Several automakers, including Maruti Suzuki, the largest from India, have not yet entered space.
N Chandrasekaran, chairman of the salt conglomerate at software Tata Group, said in July that Tata Motors had “aggressive” growth plans for its EV business and expects a quarter of its sales to come from battery-powered cars. in the future, against only 2%. now.
Tata also has the advantage of working with other companies in the group such as Tata Power, Tata Chemicals and Tata Autocomp to create an ecosystem for electric vehicles, Chandra said.
JP Morgan and Morgan Stanley advised Tata Motors while Bank of America advised TPG.