Tata Motors is set to allocate up to Rs 35,000 crore over the next five years to expand its passenger vehicle segment, including electric vehicles (EVs). This investment will focus on expanding its product lineup, developing software-driven vehicles (SDVs), integrating advanced technologies, and rolling out next-generation powertrains.
The company’s investment plan, outlined in an investor presentation, covers the period from FY2026 to FY2030. Within this timeframe, Tata Motors will allocate Rs 33,000-35,000 crore towards the passenger vehicle business, which includes the EV division. For electric vehicles, which have recently reached profitability at the EBITDA level, a capital expenditure of Rs 16,000-18,000 crore is earmarked for FY25 to FY30.
Tata Motors is prioritizing heavy investments in the development of innovative products, SDVs, advanced technologies, and powertrain systems. As part of its expansion strategy, the company plans to grow its product portfolio to more than 15 models by the end of the decade, up from the current eight. This includes 30 product updates, consisting of seven new models and 23 refreshed versions. Among the new models will be one from the Sierra range, two from the Avinya lineup, four internal combustion engine (ICE) vehicles, and two EVs.
The company aims for its passenger vehicle segment to surpass market growth, targeting a 16% market share (including EVs) by FY27, with further expansion to 18-20% over the next 2-3 years. In FY25, the passenger vehicle division generated Rs 48,400 crore in revenue, and the company has committed to investing 6%-8% of this revenue into the sector’s growth.
Within the EV segment, Tata Motors expects to maintain its dominant position. The company forecasts that electric vehicles will account for 20% of its total passenger vehicle sales by FY27, rising to 30% by FY30.
These growth targets come after a year of stabilization in FY25, following four years of robust performance. During this period, Tata Motors experienced a slight dip in its passenger vehicle sales and market share, partly due to rising competition from Mahindra & Mahindra, which has bolstered its SUV portfolio.
The EV market has seen a notable shift in recent years. Tata Motors’ share has dropped from around 80-85% two years ago to roughly 55% today. This change is largely due to growing competition, particularly from JSW MG Motor’s Windsor EV and Mahindra’s new EV models like the BE 6 and XEV 9e.
In response to these developments, other major players have also ramped up their investments. Maruti Suzuki’s parent company, Suzuki Motor Corporation, plans to invest nearly Rs 70,000 crore in India over the next five years to expand its production capacity and refresh its product offerings. Maruti plans to increase its model range from 18 to 27 and introduce an EV portfolio of four models.
Hyundai India is also increasing its investments, with plans to launch 26 new models over the next few years, including 20 ICE vehicles and six EVs. The company will invest Rs 10,000 crore in product development, along with an additional Rs 8,000 crore for R&D and expanding manufacturing capacity. Meanwhile, Mahindra & Mahindra announced last year that it plans to launch nine ICE SUVs and seven EVs by the end of this decade.
