Tata Motors Ltd is all set to raise US $1 billion for its foray into the passenger electric vehicle (EV) business from the climate investing strategy of the US private equity firm, TPG, and co-investor ADQ.
The new company, which will operate as a unit of Tata Motors, will tap into the existing facilities and capabilities of the Mumbai-headquartered auto manufacturing giant and future investments will be plugged into building dedicated battery EV platforms, developing advanced automotive technologies and also spu investments in critical charging infrastructure and battery technologies, added the statement.
In sync with the growing acceptance for electric vehicles and clean mobility solutions in the country, this EV unit in the next five years will go on to develop a portfolio of ten electric vehicles and establish much-needed charging infrastructure across the country in association with Tata Power Limited. Tata Motors’ shift towards EVs comes in the wake of sustained pressure from investors to back environmentally sustainable businesses, said a Mint report.
Tata Motors is keen to build a “market-shaping electric passenger mobility business in India”, said N Chandrasekaran, Chairman of Tata Motors, commenting on their association with TPG Rise Climate. Media reports quoting him said, “We will continue to proactively invest in exciting products that delight customers while meticulously creating a synergistic ecosystem. We are excited and committed to play a leading role in the government’s vision to have a 30 per cent electric vehicles penetration rate by 2030.”
Excited about partnering with Tata Motors on their journey to electrifying passenger mobility in India, founding partner of TPG and managing partner of TPG Rise Climate, Jim Coulter, said that there is a “significant momentum around India’s EV movement”, which is backed by the government’s vision and policies, as well as growing consumer demand for greener solutions. “The investment aligns with TPG Rise Climate’s focus on decarbonised transport and builds on TPG’s long history in India,” he said.
EVs are gaining popularity as the government provides multiple incentives through its FAME programme to encourage people to switch from petrol and diesel vehicles. Also, the rising fuel prices and increase in the price of internal combustion engine vehicles after the implementation of Bharat Stage-VI emission norms have led to the emergence of EVs.