Tata Motor's pact with TPG to scale up EV biz
Moody's Investors Service on Wednesday said that Tata Motors' pact with private equity firm TPG is credit positive, as it will help the automaker to scale up its electric vehicle (EV) business.
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New Delhi: Moody's Investors Service on Wednesday said that Tata Motors' pact with private equity firm TPG is credit positive, as it will help the automaker to scale up its electric vehicle (EV) business.
Last month, Tata Motors announced that it will raise one billion in its passenger EV business from TPG Rise Climate. "We estimate that TPG Capital's one billion capital injection into Tata Motors's (TML, B1 stable) electric vehicle subsidiary, EVCo, will fund half its EV spending in India (Baa3 stable) through March 2026," Moody's Investors Service said in a statement.
Tata Motors intends to use the funds, which it will receive in exchange for compulsorily convertible preference shares issued to TPG, to create a portfolio of EVs and dedicated battery electric vehicle (BEV) platforms. EVCo will also invest in battery technologies and charging infrastructure in association with Tata Power Ltd. Moody's Investors Service noted that the automaker has an early mover advantage in EVs in India, but faces challenges in scaling the business.
"The company's planned launch of 10 new EVs through March 2026 will help cement its EV position in India. However, its market share will decline from 71 per cent as EV penetration rises."
