Tata Motors is positioning itself to strengthen its presence in the electric vehicle (EV) market by focusing on locally produced batteries. According to a report, the company plans to gain greater control over the most expensive component of an EV, the battery, through its partnership with Agratas, the battery arm of the $165 billion Tata Group. Agratas is set to begin production of lithium-ion battery cells in 2026, allowing Tata Motors to further integrate its supply chain and reduce dependency on external suppliers.
Tata Motors is betting on locally manufactured EVs as a key strategy to maintain its competitive edge in a market that is becoming increasingly crowded. In an interview with Reuters, Group CFO P.B. Balaji emphasized that the company's focus on local production will help it stay ahead, despite mounting competition.
With new players entering the Indian EV market, including JSW, Mahindra & Mahindra, Hyundai Motor, and Maruti Suzuki, Tata Motors has seen a reduction in its market share. Its share of the EV market dropped to 62% in 2024, down from 73% the previous year. Balaji also noted that global players like Tesla are eyeing the Indian market.
Tata Group has already made a significant commitment to this strategy, with a $1.5 billion initial investment to build a battery gigafactory in India. This move will help supply Tata Motors with the necessary components for its EVs and further integrate its supply chain. Balaji expressed confidence in the company’s future in the EV space, saying, "The work on the entire ecosystem is something that we have. We will be a dominant player in this market."
In addition to its investment in local battery production, Tata Motors has received $1 billion in funding from U.S. private equity firm TPG. The company is also set to benefit from India's EV incentive program, under which it expects to receive approximately $750 million over the next four years. Balaji mentioned that the first tranche of $17 million has already been received.
