Tube Investments is working on four electric vehicle (EV) platforms and plans to invest Rs 250 crore in each, taking the total investment to Rs 1,000 crore.
The company, part of the Murugappa group, said it is currently working on platforms for three-wheeler, tractor and heavy commercial vehicles, and the fourth one is in the works.
Stressing that the company’s biggest area of spend is EVs, Vellayan Subbiah, executive vice-chairman, Tube Investments of India (TII), said during an earnings call: “Over the time, our vision is to get in at least four platforms. Right now, we have announced three-wheeler, tractor and the heavy commercial vehicle. Tractor and heavy commercial vehicle were through acquisition, so we do see a fourth platform as well and we see that consuming a large chunk of our capital.”
TII will see how these platforms scale up and then accordingly evaluate where the company needs to double down and invest more.
On future investments, Subbiah said: “We continue to hold the same prudence that we will not exceed two times free cash flow, so I think capital efficiency-wise, we will continue to maintain that. But we definitely see a lot of opportunity in electric and are going to invest in that.”
On queries if the fourth platform would be for two-wheelers, Subbiah said the company is not working on the segment as it is already too crowded. “The rate at which these guys are losing money…that is not the kind of business we can play. We are still kind of old school, we still have to make money now, that is the way we look at it,” he said.
For e-three-wheelers, the company has appointed dealerships and is likely to start taking orders in September. TII had earlier announced that it will be launching the e-three-wheelers by September first week.
Outlining plans for e-tractors, Subbiah said: “The initial product range may not cover much of the market, but the largest is going to be that 30-40 horsepower segment and 40-50 horsepower. So, there is one product that is closest to homologation right now and then there are two more that we will submit within the next six months.”
TII had formed a wholly owned subsidiary to focus on clean mobility and had planned to infuse around Rs 350 crore into the newly-formed arm through a combination of equity, preference and debt instruments. It had acquired a 70% stake in Cellestial E-Mobility, a Hyderabad-based startup engaged in the design and manufacture of e-tractors, in January this year. It is also working on the heavy commercial vehicle segment. TII had last month acquired lPLTech Electric, an electric heavy commercial vehicle company.