Encouraged by its success within the electric passenger vehicle space, Tata Motors is preparing for electrification of a part of its commercial vehicle portfolio. The transition towards commercial EVs shall be larger than its entry into the electric private car phase, as industrial EVs will potentially generate $500-700 million (Rs 3,800-5,350 crore) in business in a couple of years for the company.
Tata Motors is already the lowest bidder in a tender floated by the government for 5,500 electric buses, an order with a business potential of more than Rs 3,000 crore. The firm is also set to sign a memorandum of understanding with half a dozen last-mile ecommerce and mobility suppliers, like Amazon, Flipkart, BigBasket, Delivery and Moving.com, to deliver 15,000-20,000 units of the electric version of its Ace mini truck, estimated to be price $150-200 million.
“The company has been slowly and steadily aggregating demand across last-mile mobility providers. The number of 15,000-20,000 appears rather conservative; intent or demand is more than double that number,” stated one of three individuals within the know. The company is ready to deliver more, he said, while pointing out supply chain issues, such as the shortage of semiconductors, as a drag.
“While the passenger vehicle business is all glamourous and gets more attention, the demand in the commercial vehicle space has a lot more heft and may deliver big moolah for Tata Motors in the future. It is a low hanging fruit, which needs to be consummated, tactically and strategically,” stated a second person.
Tata Group Chairman N Chandrasekaran last week informed that Tata Motors’ pivot in the direction of EVs would go “all in”, to enable the company to lead the space.
The entire Tata Group is involved to drive the EV ambition of Tata Motors, with Tata AutoComp, Tata Power, Tata Chemicals, Tata Technologies, Tata Elxi and Tata Consultancy Services working on developing and supplying products, software and services.
In the previous year, the company has brought on board Anurag Mehrotra, the former Managing Director of Ford India who may work on opening up new markets for EVs globally. Former Global Chief Marketing Officer of Royal Enfield Shubhranshu Singh, who also joined the company last year, will drive a change in perception for the brand in the cleaner mobility space.
One of the people said the electric CV business of the company would likely to follow a strategy similar to what it adopted for the passenger vehicle business: showcasing capability and business potential before making investment in scaling up.
