Tata Motors’ Rs 32,000 crore Capex plan aims to grow all businesses into EVs

Indigenous carmaker Tata Motors has increased its capital expenditure by 30 per cent to Rs 32,000 crore from Rs 23,000 crore in FY23. The automaker plans to use the capex to accelerate its transition to electric vehicles (EVs) across all its commercial vehicles (CVs), passenger vehicles (PVs) and its partner Jaguar Land Rover.

The automaker will invest up to Rs 6,000 crore internally to expand its portfolio capacity. Jaguar Land Rover, on the other hand, will receive around Rs 26,000 crore or 6 2.6 billion.

Tata Motors plans to launch about ten new EVs in the next five years. The company’s annual report reveals that its domestic PV business will continue to launch new products and increase its capacity to meet growing demand. Despite a significant step forward in investment, the PV business is expected to remain self-sufficient while the investments in the EV business are well-funded.

Shailesh Chandra, managing director of Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said in the company’s annual report: To make FY22 a landmark year in passenger and electric vehicles.

Tata Motors has overtaken South Korean automotive brand Hyundai to become the best-selling sport utility vehicle (SUV) manufacturer in India in FY22. So far, Tata Motors is also leading the EV space in India with over 70 per cent market share and its Nexon EV is the best-selling electric car in the country.

Chandra said, “We have also launched two subsidiaries – Tata Motors Passenger Vehicles Limited. Focusing on IC engine-powered passenger vehicles and Tata Passenger Electric Mobility Limited enables its ecosystem to accelerate the growth of the passenger EV business and as an investor with TPG Rise Climate. . For the foreseeable future, the demand for our ‘New Forever’ range remains strong despite the uncertainties of the semiconductor situation and supply-side challenges. “

Interestingly, Tata Motors already has a cash flow of around Rs 9,504 crore for FY23, for both JLR and domestic operations – despite the increased capital outlay.

Earlier, during the unveiling of the electric mini truck Ace EV, Tata Group Chairman N Chandrasekaran said that sustainable mobility is an essential as well as a global megatrend that is irreversible. “At Tata Group, Tata Motors in particular, we have fully embraced it and created a business model that is one of the key pillars integrating sustainability. Whether it’s a passenger car, our commercial vehicle or a typical Jaguar Land Rover, we We’re committed to change, and we’re accelerating it every day. “

JLR’s capital expenditure limit for FY22 was 2.5 2.5 billion, however, it was reduced by 500 500 million due to volume reduction in the global chip deficit. JLR’s capex ratio was 11 percent at FY22.

Thierry Bollore, chief executive officer of Jaguar Land Rover, said: “The environment is still difficult in light of global chip shortages and other challenges. However, I am encouraged by the consistently strong customer demand for our products highlighted by the record order book. And we’re continuing our remagging strategy with exciting new products like Defender, New Range Rover and just announced the new Range Rover Sport as we move forward with our all-electric Jaguar strategy and our plans for a new generation electric vehicle with BEV. The first EMA platform for new Land Rover products.

Tata Motors’ domestic PV and CV businesses have spent Rs 2,202 crore on research and development (R&D) and received a capital investment of Rs 1,462 crore in FY22, bringing the total investment for the full financial year to Rs 3,664 crore.

Tata Motors plans to gradually increase its capital expenditure ratio to electrify its commercial vehicles. The company has invested up to Rs 2,000 crore in the last five years as capital in its commercial vehicle business.

Girish Wagh, Executive Director, Tata Motors Ltd., said, “The Indian commercial vehicle sector, which has been deeply affected for two consecutive years, shows promising signs of growth in FY22 supported by stable recovery in the economy, growing industrial activity and market reopening. At Tata Motors, the initial adoption of a comprehensive ‘Business Activity Plan’ has enabled us to protect and serve the interests of our customers, dealers and suppliers, as well as smartly manage supply-related challenges, including the global shortage of critical electronic components. “

“Looking ahead, we see significant opportunities to harness the megatrends that shape the Indian automotive industry. We are keeping a close eye on geopolitical developments, energy inflation and semiconductor shortages, and look forward to continuing to work closely with our customers and ecosystem partners to reduce risks and manage uncertainties, “Wagh added.