Tata Motors puts pedal to the metal but margin, market share concerns remain
Tata Motors Ltd has laid out an aggressive road map for the next few years, aiming to jack up its market share on the back of new launches andsharper focus on electric vehicles (EVs), though more competition and margin pressure may throw a wrench in its plans. In the domestic passenger vehicles (PV) business, Tata Motors plans to launch 5-6 new models, including four EVs, over the next two years starting with Curvv in FY25. The management expects India’s PV industry to touch 6 million units by FY30, a compound annual growth rate (CAGR) of 6%.
At its investor day event last week, the company said it plans to grow faster than the industry by improving its addressable market from 53% to 80% led by new car models (including mid-cycle refreshes) and powertrain options like EV and compressed natural gas (CNG). All these steps are geared towards increasing its market share from 14% now to 16% by FY27 and 18-20% by FY30. Giving an update on the demerger of its commercial vehicle (CV) and PV business, Tata Motors said the NCLT scheme will be placed before the board for approval.
A key focus area for the company is the EV segment, where it commands a market share of over 70%. It looks to maintain leadership in the EV segment and achieve a 30% penetration of EVs in its portfolio by FY30. The management also plans Ebitda breakeven by FY26 driven by softening battery costs and growing economies of scale.
Ebitda is earnings before interest, taxes, depreciation, and amortization Of course, there is often a wide gulf between making plans and executing them. For one, with rivals lining up a slew of launches in the EV space, Tata Motors will find it increasingly tough to hold on to its crown. Notably, Tata Motors’ EV market share slipped
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