Tata Motors, the leading electric vehicle (EV) manufacturer in India, is focusing on the production of locally sourced batteries to maintain its competitive edge in the rapidly changing EV market. In a recent interview with Reuters, P.B. Balaji, the group Chief Financial Officer of Tata Motors, emphasized that the company's initiative to manufacture batteries domestically will be crucial in preserving its market leadership amidst increasing competition.

In 2024, Tata Motors' share of the EV market fell to 62 percent, a decrease from 73 percent in the previous year, as competitors like JSW MG Motor made significant strides with the introduction of new models. The competitive landscape is anticipated to become even more challenging in 2025, with Mahindra & Mahindra, Hyundai Motor, and the market leader Maruti Suzuki set to unveil new electric vehicle offerings. Furthermore, Tesla Inc., the prominent global player in the EV sector, is also investigating opportunities within the Indian market, potentially heightening the competition.

To bolster its market position, the Tata Group has committed an initial investment of $1.5 billion to create a battery gigafactory in India, which will cater to Tata Motors' needs. This facility, managed by Agratas, the Tata Group's battery division, is expected to commence the production of lithium-ion cells in 2026. Balaji noted that this strategic move will allow Tata Motors to enhance its supply chain integration, thereby decreasing its dependence on external suppliers and securing the most costly component of electric vehicles: batteries.

Tata Motors is positioned to optimize its costs and investments by leveraging EV components and charging infrastructure from the broader Tata Group ecosystem. The company's electric vehicle range features models priced between ₹8.00 lakh and ₹22.00 lakh, providing a diverse array of options tailored to different customer segments.

Balaji informed Reuters that the Gujarat-based gigafactory is projected to achieve peak production capacity by 2028, thereby ensuring a consistent supply of batteries to support the company's growing electric vehicle (EV) portfolio. With its integrated supply chain, Tata Motors is strategically positioned to maintain a competitive advantage over newer competitors such as Mahindra, Maruti Suzuki, and Hyundai, which rely on external suppliers for EV batteries and components.

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Balaji also noted that Tata Motors is in a strong financial position to compete vigorously in the market. The company has secured $1 billion in investment from the US private equity firm TPG and stands to benefit from India's EV incentive program, which is anticipated to provide approximately $750 million over the next four years. Balaji mentioned that the initial $17 million has already been received, and the company is optimistic about sustaining growth as battery prices decrease and the business begins to self-finance.

Although electric vehicles constituted only 2.5 percent of India's 4.3 million car sales in 2024, the segment experienced a remarkable growth rate of 20 percent, significantly surpassing the overall car market's five percent growth. In 2024, EVs accounted for around 12 percent of Tata's total car sales, with the company aiming to increase this share to 30 percent by 2030. With the introduction of new models and rising consumer acceptance, EV sales are projected to double in 2025, reaching 200,000 units compared to 100,000 the previous year.

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