Tata Motors’ electric vehicle (EV) division has achieved a major milestone, recording its first operating profit in the December quarter, five years after entering the EV market. This profit was earned without relying on government incentives from the production-linked incentive (PLI) scheme. It marks a significant achievement, as it is potentially the first profitable instance for an electric vehicle maker in India (excluding commercial vehicles) and the first in the electric car segment.
Dhiman Gupta, CFO of Tata Passenger Electric Mobility (TPEM), highlighted that this is the first time the division has turned a positive EBITDA without the benefit of the PLI. The division posted a profit before tax of Rs 200 crore, largely driven by the launch of the Curvv.ev, a new mid-size SUV, which improved the product mix.
“Margins are improving structurally due to the better mix with the Curvv and deep localisation efforts, such as in battery packs. These are areas we will continue to focus on,” Gupta stated during a post-earnings call.
In the same quarter, Tata Motors recognized Rs 182 crore from the PLI scheme under the passenger vehicle category. Since the division has become profitable without relying on these incentives, Tata plans to reinvest these earnings into further business growth.
The company’s reported EBITDA margin for the quarter was 10%, with 8.3% coming from the PLI, leaving a 1.7% margin without the scheme’s support. Tata Motors plans to use the PLI funds to support capital expenditure and market development efforts.
Currently, Tata Motors’ EV models—Tiago.ev, Tigor.ev, and Punch.ev—are eligible for the PLI, while the Nexon.ev and Curvv.ev are in the certification process. All of the company’s EVs meet the PLI requirement of 50% domestic value addition.
Tata Motors also mentioned that while battery pack prices have dropped significantly, the cost of cells is expected to rise in the near future. However, the company has identified opportunities to reduce costs in other components, enabling them to maintain competitive pricing, especially in the sub-Rs 12 lakh EV segment, where competition is limited.
“We see the most action in the Rs 18 lakh and above segment, so we will focus on expanding in tier 2 and tier 3 cities, where there is significant growth potential,” said Shailesh Chandra, Managing Director of TPEM and Tata Motors Passenger Vehicles.
Tata Passenger Electric Mobility (TPEM), a subsidiary of Tata Motors, is at the forefront of India’s electric vehicle (EV) revolution, driving innovation and sustainability in the passenger vehicle segment. With a strong commitment to green mobility, TPEM has launched a range of cutting-edge electric cars, including the Nexon EV, Tiago EV, and Tigor EV, making electric mobility more accessible to Indian consumers.
The company leverages Tata Group’s ecosystem, including Tata Power for charging infrastructure and Tata Chemicals for battery solutions, to create a robust EV value chain. Focused on advancing EV technology, TPEM continues to invest in R&D, expand its product portfolio, and strengthen India’s transition towards a cleaner and more sustainable transportation future.
