In today’s Finshots, we look at what’s brewing in India’s electric vehicle market and how Tata Motors is striving to lead the revolution amid rising competition.
But before we begin, we have a simple video explainer on the recent U.S. charges on Adani. The U.S. SEC and Department of Justice have accused Gautam Adani and his associates of bribery and fraud, leading to a wipeout of nearly ₹3 lakh crore in investor wealth as Adani Group stocks tumbled over 20% in a day. But what are the accusations, and why are U.S. agencies after Adani? Find out by clicking here.
The Story
Picture this: you’re in a bustling Indian city, surrounded by the hum of electric scooters, the silent glide of electric cars, and people charging up at power stations.
This isn’t some distant vision — it’s happening right now. The EV revolution in India is in full swing, fueled by government incentives, private sector enthusiasm and a rising demand for cleaner, affordable transportation. They’ve been on a mission to get us hooked on EVs for years now.
It all began nearly a decade ago with the FAME scheme, rolled out in phases to make EVs more affordable and accessible. Then came FAME II, which wrapped up in early 2024. But it didn’t stop there. New initiatives like the Electric Mobility Promotion Scheme (EMPS) and the shiny PM E-Drive scheme have stepped in, offering subsidies for electric two- and three-wheelers (e2Ws and e3Ws) to keep the EV buzz going strong.
Have these subsidies helped India adopt EVs?
Absolutely!
Over 6 lakh e2Ws and e3Ws have been sold under the PM E-Drive scheme this year alone. And thanks to these subsidies, India is now the world’s 2nd largest market for e2Ws and the largest market for e3Ws. Electric car sales from domestic carmakers is also on the rise.
EV penetration is also rising steadily. Its share in India’s auto sales grew from 1.7% in 2021 to over 6% in 2023.1 And for 2-wheelers, it jumped from 0.4% to over 5%, driven by subsidies and new e2W launches.2 Not bad, right?
That brings us to one company leading India’s EV dreams — Tata Motors.
This company isn’t just dabbling in the EV game, it’s owning it, with a whopping 67% market share in the electric four-wheeler (e4W) segment. Its models, like the Nexon EV and Tigor EV, seem to have cracked the code with the perfect mix of affordability, range and reliability.
But Tata’s not hitting the brakes anytime soon. It’s gearing up to roll out ten new EV models by 2025, covering both passenger and commercial vehicles. And the best part? Tata isn’t just building electric cars. It’s aiming to control the whole EV ecosystem. That’s a big move and gives it a serious advantage over rivals still piecing together their EV strategy.
So, how’s Tata doing this, you ask?
For starters, let’s talk about batteries. They’re the beating heart of any electric vehicle, and Tata gets it. That’s why Agratas, Tata’s battery manufacturing arm, is setting up a lithium-ion giga-factory in Gujarat.3 The goal is to cut down on imports and secure a steady, cost-effective supply of batteries to meet the growing demand. With an initial capacity of 20 GWh (Gigawatt-hour), Agratas is central to Tata’s mission of making EVs affordable and accessible.
But Tata isn’t stopping there. It’s also looking at battery materials. Enter Tata Chemicals, which is not only supplying lithium-ion components but also exploring sodium-ion batteries as a potential alternative. Why? Because they’re less dependent on scarce resources like lithium and could be cheaper for specific uses. It’s also a smart hedge against market swings in raw material availability and costs.
And what’s an EV revolution without charging infrastructure, one of the biggest hurdles to adoption? Tata Power is on it, with over 5,600 public charging stations across India — and plans to add 25,000 more in the next five years. This isn’t just about making EVs practical for daily use, it’s also a clever way to secure a steady revenue stream. Plus, their home charging solutions are a hit among urban buyers who love the convenience of overnight charging.
Then there’s tech. Electric vehicles aren’t just about motors, they’re computers on wheels. That’s where Tata Elxsi and TCS (Tata Consultancy Services) step in. Elxsi handles engineering and design, while TCS delivers IT solutions for connected and autonomous features. Together, they’re giving Tata’s EVs the brains to match their brawn.
And let’s not forget materials. Lighter EVs mean better range and performance, so Tata Steel is developing lightweight, high-strength materials to give Tata’s vehicles an edge. The less weight an EV carries, the longer its range and the better its performance. It’s a win-win.
So yeah, the Tata Group has some pretty big ambitions for EVs, and they’re going all-in with a full-on supply chain integration strategy. But is it actually working?
To answer that, we’ll have to take a closer look at the company’s performance and a few macro factors.
To begin with, competition is definitely heating up. To put things in perspective, Tata Motors saw its market share dip in FY24, with rivals like MG Motors and Mahindra pushing hard to expand their electric vehicle lineups. And if you look at the latest numbers, Tata’s EV retail market share dropped from 74% in October 2023 to 58% in October 2024.4 So, it’s clear others are catching up fast.
Another significant challenge is China’s dominance in the lithium and battery supply chain. China controls nearly 58% of the world’s lithium refining, and disruptions in supply could pose a risk to Tata’s plans.5 Sure, Tata is working hard to localize production. But the global supply chain for batteries remains a vulnerability which they will have to navigate carefully.
Besides, there are a few consumer concerns that Tata still has to overcome. For many potential buyers, range anxiety is a real problem. Now while Tata Power is trying to address this by quickly ramping up its charging network, it’s not quite on par with traditional fuel stations just yet.
On top of that, even with subsidies, the high upfront cost of EVs remains a tough pill to swallow, especially for mass-market consumers. It’s one thing to build an EV that performs well, but it’s another to make it affordable for the average Indian. In fact, recent data shows that nearly half of EV owners are considering switching back to their old internal combustion engine (ICE) vehicles.6
But here’s the thing. Despite these challenges, Tata’s vision for the EV ecosystem is setting it up for long-term success. Its latest quarterly results are proof of the pudding.
Tata’s luxury brand, JLR, which brings in about 70% of the company’s earnings, is diving headfirst into their new “Reimagine” strategy. They’re all set to invest £500 million to transition to electric vehicles, and by 2030, they plan to go fully electric.7 Their Halewood plant will play a big role in this shift.
And it’s not just cars. Tata is making waves in the electric commercial vehicle space too, particularly with buses. There are now over 3,300 Tata electric buses on Indian roads, covering more than 21 crore kilometers.8
Tata also leads the passenger vehicle (PV) EV market with around 65% share.9 Their new model, the Curvv, is already seeing positive demand, with 20% of car bookings going for the EV variant, despite the slowdown in overall EV sales.
And that’s exactly how, by owning a big chunk of the value chain — from battery manufacturing to charging infrastructure — Tata has built a strong foundation that few competitors can match.
Sure, the road ahead might have its bumps, but Tata’s clearly got its foot on the pedal.
And with India still in the early stages of its EV journey, how things unfold with government policies, competition and supply chain hiccups is something to keep an eye on.
Until next time…
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Story Sources: Economic Times [1], [2], Value Research [3], ACKO Drive [4], Visual Capitalist [5] , Times of India [6], CNBC TV18 [7], TATA [8], Mobility Outlook [9]
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