Tata Motors to Infuse about $1 Billion in Commercial Vehicles Biz

Tata Motors to Infuse about $1 Billion in Commercial Vehicles Biz

Tata Motors has lined up an investment of over $1 billion in the coming 4-5 years to recraft its road map for the commercial vehicle business, with electric vehicles at its core, according to sources.

The company that has taken initiative in the passenger electric vehicle (EV) space, to transition to new-age platforms designed to deliver futuristic EVs in the commercial vehicle (CV) space as well. These vehicle architectures would also be able to accommodate CNG, LNG and diesel powertrains, in a significant shift from the past when fossil-fuelled vehicles were re-engineered to make EVs.

Girish Wagh, executive director – commercial vehicle business, at Tata Motors states that it is working on a range of options catering to the short-range battery-operated vehicles for the last mile with the small CV offerings and gas-based fuel-cell electric vehicles to cater to the more extended range. Still, before that, the shift towards CNG is going to be quick.

Girish adds, “Electrification in CVs will happen through gaseous fuel first. One has seen a significant shift towards CNG; the improved distribution (of CNG) is expected to accelerate further. We have re-looked at the whole range and applications, which we need to work on and prioritise at the back end with a reworked modularity strategy. A lot of work is happening on delivering solutions with real-world experiences.”

 The new roadmap is being put in place as the company is also revamping its sales and marketing interface with the induction of senior marketing professionals like Shubranshu Singh, who joined from Royal Enfield, and former Ford India managing director Anurag Mehrotra, who will steer its international business and strategy.

Apart from last mile, some steel and cement companies are asking for electric trucks for mining applications, and the company has already started working on a solution.

While there is no defined plan to set up an independent subsidiary for the electric CV business at Tata Motors, industry experts said it is almost a foregone conclusion. Right now, there is a big focus on developing a strong product portfolio and building a customer base to secure a healthy valuation at Tata Motors.

To be sure, Tata Motors’ nearest rival, Ashok Leyland, is already out in the market looking for an investor for its EV business under Switch Mobility.

He briefs, “We invested over Rs 1,800 crore in FY20, which was our highest ever investment for the year; with the upcoming BS-VI phase-2 emission norms and a big focus on EVs and CNG, we may have to invest a similar amount in the coming few years.”

The new portfolio of vehicles is being curated to meet the upcoming BS-VI, RDE or Real-time driving emission standards which will be rolled out on April 1, 2023.