Tata Motors is going to invest more than $1 billion in its CV business in the coming 4-5 years. 

Tata Motors, a leading truck manufacturer in India, is going to invest over $1 Billion, more than Rs 7,500 crore in the coming 4-5 years, to redraw its road map for the commercial vehicle business with electric vehicles. As the company already sees huge success in the passenger electric vehicle space, it is now looking to replicate the same in the commercial vehicle space by delivering futuristic EVs in commercial vehicles. In addition, the company will develop next-gen platforms for commercial vehicles that will accommodate CNG, LNG and diesel powertrains and fully electric powertrains. 

Girish Wagh, executive director of the commercial vehicle business at Tata Motors, said that Tata Motors wants to drive and lead the electrification in the marketplace as the company did with its conventional powertrains in the past. The company is also working on several options for the last mile and short-range battery-powered vehicles with smaller CV offerings and gas-based fuel-cell electric vehicles to cater to a more extended range. However, before that, the move towards CNG will be bullish.

He said, "Electrification in CVs will happen first by gaseous fuel. A significant shift towards CNG has been observed; Better delivery of CNG is expected to pick up further. We have revisited the full range and applications we need to work on and prioritized the back end with a revised modularity strategy. With added, "There is a lot of work going on providing solutions with real-world experiences."

However, Wagh declined to comment on the investment amount and other plans to set up an electric vehicle subsidiary. According to him, such talks have been termed "speculation". 

The new road map is created. The company is also improving its sales and marketing interface by inducting senior marketing professionals such as Shubranshu Singh, who joined from Royal Enfield and the erstwhile MD of Ford India Anuraj Mehrotra, who will drive its international business and strategy. 

Wagh said the overall cost of ownership might soon shift in favour of electric over diesel, but it may take a little longer for EVs to overtake CNG vehicles.

In addition to Last Mile, some steel and cement companies seek electric trucks for mining applications, and the company has already started working on a solution. However, Tata Motors has no definite plans to set up an independent subsidiary for the electric CV business. However, industry experts say it is almost done. Right now, a major focus is on building a customer base at Tata Motors to develop a strong product portfolio and secure a healthy valuation.

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

"We invested over Rs 1,800 crore in FY 2020, which was our highest ever investment for the year. With the upcoming BS-VI Phase-II emission norms and a bigger focus on EV and CNG, we may have to invest a similar amount in a few years to come," he explained.

The new portfolio of vehicles is being built to meet the upcoming BS-VI, RDE or real-time driving emission standards, implemented on April 1, 2023. Currently, Tata Motors offers three electric CVs, all buses - 9/9, 12-meter low floor and 12-meter regular floor. There is also a full range of products under work.

Earlier this year, the company won orders for 15 hydrogen fuel cell electric buses from Indian Oil Corp. Tata Motors has supplied over 650 buses to various state transport undertakings and has gained 20 million km of EV operating experience on the road.

In a recent meeting between top Tata Motors executives and Tamil Nadu Chief Minister MK Stalin, Wagh said the company is seeking a small plot of land for a driving motor training school in the state. The company has been allotted a few acres of land within 48 hours of the meeting, and talks have also been extended to meet any public transport requirement - if Tata Motors can do so, he said. On talks on Tata Motors' interest in Ford's factory near Chennai, Wagh said they were "mere speculation".

Meanwhile, the truck maker expects the market to grow by 20-22% in this financial year, and the momentum will continue in the coming financial year as well. The economic recovery is picking up pace, with freight loads already exceeding pre-Covid levels.
 

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