Tata Motors Passenger Vehicles plans to increase annual manufacturing capacity by nearly 45% over the next two to three years as it is targeting around 20 % share of the domestic passenger vehicle market over the same period. At its Passenger Vehicle Investor Day on Tuesday, the company outlined plans to raise annual production capacity from around 900,000 units currently to 1.3 million units. The capacity expansion will support an aggressive product-led strategy that includes six all-new nameplates and more than 20 product interventions across its passenger vehicle portfolio by FY31.
The manufacturing scale-up forms a key part of Tata Motors’ broader objective of increasing annual passenger vehicle sales to more than 1.2 million units by FY31, compared with around 640,000 units currently.
₹40,000 Crore Investment
To support these ambitions, Tata Motors plans to invest nearly Rs 40,000 crore during the planning period, with capital expenditure maintained at around 7% of revenue. The company said investments will be front-loaded in the initial years and directed towards capacity creation, new product development and technology upgrades.
The product roadmap includes expanding the portfolio from nine nameplates currently to 15 by FY31. The strategy encompasses six new nameplates along with multiple facelifts, feature upgrades, lifecycle enhancements and powertrain additions. The brand will launch the Sierra EV on June 30 and the Safari EV is expected to launch by late-September, sources tell FE.
A significant portion of future growth is expected to come from alternative fuel vehicles. Tata Motors expects electric vehicles to account for 15-20 % of the overall passenger vehicle market by FY31 and plans to expand its EV portfolio from six nameplates to ten. The company is targeting EV penetration of around 30 % within its own passenger vehicle sales by the end of the decade.
CNG vehicles are also expected to play a larger role. According to the company, EVs and CNG vehicles together could account for around 45 % of the passenger vehicle market by FY31 as customers increasingly seek lower running costs and cleaner mobility solutions.
Tata Motors said EV penetration in the domestic passenger vehicle market could rise to 15-20 % , with annual EV volumes reaching 1 million-1.1 million units. CNG is also expected to gain share, supported by lower running costs and wider fuel availability. Currently, EV penetration has crossed 6 % and is expected to reach 8 % , while CNG’s share has risen to 22 %.
EV and CNG Vehicles
The company estimates that of the additional passenger vehicle volumes expected between FY26 and FY31, EVs will contribute nearly 47 % and CNG another 35 % , making the two powertrains the primary drivers of market growth.
It expects India’s passenger vehicle market to expand to 6.4 million units by FY31 from 4.7 million units in FY26. Alongside expanding capacity and products, Tata Motors is preparing for a post-PLI environment through deeper localisation, battery cost reduction initiatives and scale efficiencies aimed at improving EV profitability.