Automotive News Europe — 2024-03-04
Automotive Industry
Tata aims to unlock value of its EVs and Jaguar Land Rover.
Tata Motors is seeking to split its passenger and commercial vehicles businesses into two listed companies, as it aims to unlock value of its electric vehicles and the Jaguar Land Rover luxury car making unit.
The commercial vehicles business and its related investments will be housed in one entity, the Mumbai-based company said in a filing Monday, 4 March 2024.
The second company will include passenger cars, electric vehicles, Jaguar Land Rover and its related investments.
The spinoff proposal, which will be placed before the board for approval in the coming months, will not have any adverse impact on the company’s employees, customers or business partners, it added.
All shareholders of Tata Motors will “continue to have the identical shareholding in both the listed entities,” the filing said.
The plan is subject to necessary shareholder, creditor and regulatory approvals and may take as long as 15 months.
“The three automotive business units are now operating independently and delivering consistent performance,” Tata Group Chairman N. Chandrasekaran said in the filing. “This demerger will help them better capitalize on the opportunities provided by the market by enhancing their focus and agility.”
Tata Motors is riding high after it reemerged as India’s most valuable automaker in February 2024 due to its strong position in the SUV and EV markets.
The automaker, whose shares have already surged almost 27% this year, will invest around $2 bn in electrified models by 2027.
JLR is also gearing a major shift toward electric vehicles. It’s due to launch the first electric Range Rover in 2024 and has already had more than 16,000 sign-ups for the model after opening the waiting list in December 2024.
To accelerate the assembly of EVs, Tata Group is building a 4 bn pound battery plant in the UK that will supply electric vehicles. The plant will start mass production in 2026.
Logical Progression
The move is a “logical progression” after the company separated its passenger vehicle and electric mobility businesses in 2022 and since 2021, these businesses have been under different Chief Executive Officers, according to the filing.
The spinoff will lead to “considerable synergies” across electrification, autonomous cars, and vehicle software systems, it said.
Tata Motors is also considering a potential spinoff of its battery business, Agratas, a move that would allow the unit to raise funds and go public at a later stage, Bloomberg News reported earlier this month (March 2024).
The company was also exploring similar plans for its EV business, the report said.