Tata looks to raise $1 billion for EV unit
Tata Motors, a subsidiary of Tata Group, is the largest car manufacturer across the country. Its Tata Nexon EV is one of the leading electric cars in India with commendable autonomy and features. Now, Tata Motors plans to create a new division to grow its electric vehicle business and to manufacture more Evs. For this, Tata Motors needs 1 billion dollars i.e., 750 million rupees. The company raises money from private investment companies. Live Mint News reported that acquaintances said the funding would be increased to $7 billion from these private equity firms.
Tata Motors has long planned to make a separate division for its passenger cars or vehicles business. In March of this year, shareholders also agreed to establish a passenger car company as an independent subsidiary. The electric vehicle package was acquired by the same passenger car subsidiary. The proposed money is raised for this. Many global private equity funds have also been asked for investment and to achieve the fund target. This includes Blackstone Group, TPG Capital, and KKR & Co. However, discussions only take place in the initial phase. In addition, Tata Motors has hired an adviser to negotiate with the World Investment Bank as well for further funding.
People started preferring Electric vehicles over conventional vehicles
We have seen how electric vehicles have become more and more popular in the country. There are two main reasons for this. The first is that the government offers many benefits like subsidies, tax benefits to consumers who switch to electric vehicles. Second, strict compliance with emissions regulations in response to pollution problems. Investors are also pressuring Tata to open its environmental operations and manufacture environmentally friendly cars. As a result, Tata Motors' focus on electric vehicles is growing and Tata is planning to expand its EV industry to provide more eco-friendly cars to its users.
Tata Motors striving hard to manufacture more and more EVs
Tata Motors is the largest electric vehicle manufacturer in the country. There are currently two Tata Motors electric vehicles on the market. These include the TATA Nexon EV SUV and the Tigor EV sedan. The company plans to release an upgraded electric model of the Altos hatchback in the near future. The Tata Nexon EV is the best-selling electric car in 2020. As of June 2021, Tata has sold 5,734 units of Nexon EV. Tata Motors President N. Chandrasekaran announced plans to fundraise for the electric vehicle sector at AGM in June. He also announced plans to build 10 electric vehicles by 2025 and also Tata Motors, in partnership with affiliated Tata Group companies, has launched Tata uniEVerse, a preferred ecosystem that can accept electric vehicles in India and local production of key components and support infrastructure development.
Tata Motors will split its passenger car business (including the electric vehicle sector) into a new venture valued at Rs 9,417 crore. According to rating agency Crisil, the company's marginal market share and high investment requirements in the domestic passenger car sector are detrimental to the company. But as models like the Tiago, Nexon, and Harrier grow, so does the industry. In the nine months to December 2020, PV panel sales increased 33% year-on-year and the company's market share rose to 7.8%. Tata Motors is also exploring the potential to attract strategic partners to develop new products. Tata Group also plans to enter the semiconductor market. As a result of the new corona disease, there is a worldwide shortage of microcircuits and semiconductors. Many national companies, including Tata Group, have this problem. Therefore, Tata Group plans to enter the microcircuit and semiconductor market. This was announced recently by President N Chandra Sekaran.
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