Tata Motors and TPG Rise Climate are partnering on a new passenger EV subsidiary.
Tata Motors Ltd (TML) and TPG Rise Climate have entered into a binding agreement whereby TPG Rise Climate along with its co-investor ADQ shall invest in a subsidiary of Tata Motors that will be newly incorporated. TPG Rise Climate along with co-investors shall invest Rs7,500 cr in compulsory convertible instruments to secure between 11% to 15 % stake in this company, translating to an equity valuation of up to $9.1 billion.
The new company shall leverage all existing investments and capabilities of Tata Motors and will channelize the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies, and catalyze investments in charging infrastructure and battery technologies. Over the next five years, this company will create a portfolio of 10 EVs and in association with Tata Power, catalyze the creation of a widespread charging infrastructure to facilitate rapid EV adoption in India.
“I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India. We will continue to proactively invest in exciting products that delights customers while meticulously creating a synergistic ecosystem. We are excited and committed to play a leading role in the Government’s vision to have 30% electric vehicles penetration rate by 2030,” commented N Chandrasekaran, Chairman of Tata Motors.
Jim Coulter, Managing Partner TPG Rise Climate and Founding partner of TPG, said, “We are excited to partner with Tata Motors on their mission to lead the electrification of passenger mobility in India. There is significant momentum around India’s EV movement, supported by the Government’s vision and policies, as well as growing consumer demand for greener solutions. The investment aligns with TPG Rise Climate’s focus on decarbonized transport and builds on TPG’s long history in India.”
It is expected that the first round of capital infusion will be completed by March 22 and the entire funds will be infused by end of 2022.