Electric vehicles will account for 25% of total sales of Tata Motors (TML) over the medium to long term as it scales up its plans in the segment rapidly, chairman N Chandrasekaran told shareholders at the company’s 76th Annual General Meeting, held on Friday through audio-visual format.
Currently, the EV segment is contributing only about 2% to the company’s passenger vehicle volumes. “TML has a very ambitious goal for EV. We will be launching at least 10 EV models before FY25, so we have aggressive growth plans, and towards that we will also do a capital raise for the EV segment alone at an appropriate time,” Chandrasekaran said.
In FY21 too, he said that the performance of the EV business is “particularly noteworthy”. “We strengthened our market leadership to 71.4% led by sales of more than 4,000 Nexon EV units since its launch last year,” he said.
Chandrasekaran also said that though he expected demand for passenger vehicles to remain strong with shift towards personal mobility, the supply situation would be adversely impacted over the next few months due to disruptions from Covid-19 lockdowns in India and semi-conductor shortages worldwide.
“This will impact production volumes, sales, cash flows and margins. We expect the situation will start to improve in the second half of FY22 even as the broader underlying structural capacity issues resolve with new capacities coming online over the next 12-18 months. Some level of shortages will therefore continue through to the end of the year and beyond,” he said.
On debt, Chandrasekaran said that the company is on course towards its goal to become a zero-debt company by FY24. “Last year, due to internal cash flows and tight management, we were able to reduce the debt by over `7,500 crore and we are very much on our path and stay committed to meet our target of FY24,” he said. As on March 31, 2021, the company’s debt was at `40,000 crore, which he said will be reduced through both operational cash flows and sale of non-core assets.
TML will also be launching the company’s commercial vehicle EV platform focusing on last mile segment very soon. “We are also studying EV component business and it will have opportunities. In fact, we are studying a separate battery (manufacturing) outside of Tata Motors. At present, we are investing in hydrogen fuel cells and we have got our first order from Indian Oil for 15 vehicles and there is work going on in hydrogen fuel cells area,” Chandrasekaran said.
He added that while the competition was tough at the higher-end of the EV market, TML’s EV would be at a particular price point. “As regards affordable EVs, the Tigor EV that we have, we will be launching at a higher range in FY22 and also look at more affordable EVs in the coming years,” he said.
On the issue of charging stations for EVs, Chandrasekaran said that along with Tata Power, the company was expanding to at least 25 cities and had a goal of 10,000 charging stations in the coming years.
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