Tata Group's Next Big Leap in the EV Battery Sector

When it comes to India, there are many corporations that we are known for.

The world knows the potential our country holds and thanks to the brains behind some of the biggest companies in the country, we are witnessing unprecedented growth.

But if we are asked to name one group or business that has historically been synonymous to the name of our country, it has to be the Tata group.

In 1991, Ratan Tata became chairman of the Tata Group and continued the group's tradition of innovation and expansion, leading it into new industries such as e-commerce and automotive.

It was under him that the Tata Group's acquired several global companies, including Jaguar Land Rover and Corus.

This was an extension to an already existing mobility business of the Tata group, Tata Motors.

Founded in 1945, Tata Motors launched Tata Sierra, India's first sport utility vehicle in 1991.

In 1998, Tata Motors launched the Tata Indica, India's first fully native passenger car. The Indica was a huge success and helped to make Tata Motors a major player in the Indian passenger vehicle market.

Over the years, Tata Motors has launched a number of successful passenger vehicles, including the Tata Indigo, Tata Tiago, and Tata Nexon.

The company has also expanded its commercial vehicle business, launching new products such as the Tata Ace and Tata Prima.

And now with its foray into the electric vehicle space, it is slowly changing how the world looks at India when it comes to environment friendly mobility.

Tata Motors now has a market cap of Rs 2,328.74 (billion) bn.

In the year that ended in March 2023, the company had clocked sales of Rs 3,459.7bn and booked a net profit of Rs 26.9bn.

The Tata Group's Next Big Leap is in Tata Motors & Tata Chemicals

As the world moves towards greener alternatives when it comes to mobility, electric cars are turning out to be a big bet.

As per a report earlier this year, India's electric vehicle (EV) market, including EV two-wheelers and three-wheelers, is expected to grow at a compounded annual growth rate (CAGR) of 90% to touch US$ 150 bn by 2030.

The Tata's see this as an opportunity and have started banking on it.

If you speak about an electric vehicle, the most component is the battery.

That right there is the big opportunity Tata Motors are going to ride on.

The Tata group is making a major bet on lithium-ion batteries.

Lithium-ion batteries are the most widely used type of battery in electric vehicles. They offer a number of advantages over other types of batteries, such as lead-acid batteries, including higher energy density, longer lifespan, and lower weight.

Lithium-ion batteries are already used in a wide range of applications, including:

• Portable electronics: Lithium-ion batteries are the most widely used type of battery in portable electronic devices, such as smartphones, laptops, and tablets. They are popular due to their high energy density, long lifespan, and low weight.
• Electric vehicles: Lithium-ion batteries are commonly used in electric vehicles because they offer a good balance of energy density, power density, and cost. This means that they can provide a long range of travel on a single charge without being too heavy or expensive.
• Energy storage systems: Lithium-ion batteries can be used to store energy from renewable energy sources, such as solar and wind power. This energy can then be used to power homes and businesses when the renewable energy source is not available.

In the future, lithium-ion batteries are expected to play an even greater role in our energy system.

As the world transitions to a clean energy future, lithium-ion batteries will be essential for storing and distributing renewable energy.

However, it is also a known fact that lithium-ion batteries are more expensive than the other types of batteries available in the market.

The Tata's have made a huge bet on them with the expansion of their Sanand plant in Gujarat.

The Sanand plant is Tata Motors' largest manufacturing facility in India. It currently produces a wide range of vehicles which includes the Tiago, Nexon, and Altroz.

The expansion of the Sanand plant will see the addition of a new lithium-ion battery production facility, expected to be operational by as early as 2025.

The Tata Group's investment in lithium-ion batteries is part of its broader strategy to transition to electric vehicles.

This investment by the Tata group in lithium-ion battery production is a step towards reducing the cost of electric vehicles in the country.

The company is also working on developing its own electric vehicle charging infrastructure.

The expansion of the Sanand plant is expected to create a substantial number of new jobs. Tata Motors will also be investing Rs 30 bn in the expansion of the plant, which is expected to create 10,000 new jobs.

The Tata Group's commitment to electric vehicles is also a positive development for India's economy and environment. Electric vehicles as we all know are more efficient than traditional gas powered vehicles and has zero emissions.

This can definitely help to reduce India's air pollution and dependence on imported oil.

The Tata Group's investment in lithium-ion batteries and the expansion of the Sanand plant is also a good sign for the global electric vehicle industry.

India is a large and growing market, and the Tata group is one of the leading automakers in the country.

The company's investment is a signal that the electric vehicle market in India is growing and that the Tata group is serious about becoming a leader in the global electric vehicle market.

The company aims to have 25% of its sales come from electric vehicles by 2026. The new lithium-ion battery production facility at the Sanand plant will play a key role in achieving this.

The Tata group as always has a long-term vision in this matter.

And Tata Chemicals also plays an important role in Tata's long-term vision.

It was Tata Chemicals that signed a MoU with the government of Gujarat to set up the 20 gigawatt capacity manufacturing unit for lithium-ion cells.

The current marketcap of Tata Chemicals is Rs 266.45 bn. It has shown a sales growth of 17.5% in the last 3 years.

For the year that ended in March 2023, Tata Chemicals booked a net profit of Rs 24.34 bn, which was a 73% jump of the previous year's 14.05 bn.

And the company has big plans for the future as well.

There is an ongoing expansion in the company with an approximate project cost of Rs 29 bn for increasing capacity of on almost all fronts.

This project is expected to be completed in the latter half of FY24. Rs 20 bn would be spent to further increase the planned capacity, between FY24 and FY27.

The company believes that with the ever-growing demand for electric vehicles, the need for affordable and sustainable energy options will only rise.

And their investment in the technology for lithium ion batteries will play a key role in reducing India's carbon footprint and making the country more energy independent.

It would also help Tata's to make electric vehicles more affordable and accessible to Indian consumers.

The Tata group is working on a number of initiatives to achieve its vision for the future of electric vehicles.

In addition to investing in lithium-ion battery production and the expansion of the Sanand plant, the company is also developing its own electric vehicles and charging infrastructure.

Simultaneously, the Tata group is also working with the Indian government to develop policies that support the adoption of electric vehicles.

Of course, this new development does not come without problems of its own.

These are the high cost of lithium-ion batteries, stiff competition from auto makers, both Indian and foreign, etc.

However, Tata Motors has a strong track record in the automotive industry and is well-positioned to capitalise on the growing demand for electric vehicles in India.

It has a marketcap of Rs 2,328.74 bn as of September 2023.

It made sales of Rs 3,459.7 bn in the year ending March 2023 and clocked a net profit of Rs 26.9 bn.

Conclusion

The Tata group's investment in lithium-ion batteries and the expansion of the Sanand plant are positives for India's economy, environment, and electric vehicle industry.

The company's investment is a sign that the electric vehicle market in India is maturing and that the Tata group is serious about becoming a major player in the global electric vehicle market.

The company has a strong track record in the automotive industry, is well-positioned to capitalise on the growing demand for electric vehicles in India, and is supported by the Indian government.

With the growing market for electric vehicles across the globe, it will be exciting to see how this bet of the Tata's plays out.

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