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Updated 21:23 IST, January 30th 2025

Tata Motors To Receive Rs 7,000 Crore In PLI Benefits In 5 years, Says Group CFO P.B. Balaji

Tata Motors CFO also shared that the company has committed $2.2 billion in investment toward its EV division- Tata Passenger Electric Mobility.

Reported by: Avishek Banerjee
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Tata Motors
Tata Motors' plant | Image: Tata Motors

Tata Motors , a leader in domestic electric vehicle (EV) market, expects to receive Rs 7,000 crore from the government’s Production-Linked Incentive (PLI) scheme for automakers over the next five years, according to the company’s Chief Financial Officer, P.B. Balaji.

During a media briefing after the company’s third-quarter earnings report, Balaji emphasized the importance of the PLI scheme in supporting Tata Motors' EV strategy. He also shared that the company has committed $2.2 billion in investment toward its EV division- Tata Passenger Electric Mobility (TPEM). 

“Out of the $2.2 billion, $1 billion has already been secured from TPG Rise Climate, and nearly $800 million is expected to come through the PLI scheme,” Balaji told reports.

Tata Motors has already received Rs 350 crore (approximately $40 million) in PLI benefits, with Rs 140 crore allocated to the previous fiscal year. Balaji mentioned that these funds will continue to be allocated annually and quarterly over the next five years, contributing to the development of new EV models.

Battery Cell Costs and Future Projections

Balaji also discussed the outlook for battery cell prices, indicating that while costs have stabilized at lower levels, they could begin to rise in the near future. However, he pointed out that other components within the battery pack might continue to decrease in cost as production scales up.

“Cell prices have largely leveled off at the lower end,” Balaji explained during the earnings call. “From here, we may see a gradual increase, but we’ll need to monitor how it unfolds.”
The reduction in battery cell prices has allowed Tata Motors to lower the retail prices of its EVs. As adoption rates increase, Balaji expects costs for non-cell components to decrease further due to greater localization efforts.
“As volumes grow, we expect costs across the entire battery pack to come down,” he said, adding, “There are multiple factors at play, and our goal remains to drive vehicle development efficiently.”

Tata Group, the parent company of Tata Motors, is also planning to start manufacturing its own battery cells by 2026 through its subsidiary Agratas. This move is expected to reduce Tata Motors' reliance on battery imports, especially from China. Balaji confirmed that Tata Motors and Jaguar Land Rover (JLR) will be the initial customers for these locally produced cells.

Adapting to Increased Competition in the EV Market

Despite offering India’s largest EV portfolio with five electric models, Tata Motors saw only a modest 2.3 percent increase in EV sales in 2024. The company’s market share also dropped from 75 percenrt in December 2023 to below 50 percent by December 2024. However, Balaji views the increased competition as a positive development for the sector. 

“It’s encouraging that more companies are entering the EV market,” he said, adding that this competition will help drive wider adoption of EVs. “We believe our extensive EV portfolio will continue to serve us well in this expanding market.”

Market Outlook

In terms of broader industry trends, Balaji noted that passenger vehicle sales in India grew by only 4 percent in 2024, with many manufacturers seeing slower sales in urban markets. However, he remains optimistic, stating that measures to stimulate consumption in the upcoming budget could help offset some of the external challenges facing the industry.
 

Published 20:05 IST, January 30th 2025