Tata Motors, India’s largest electric vehicle (EV) manufacturer, is set to rely heavily on the government’s Production Linked Incentive (PLI) scheme to fund its future EV investments. Of the $2.2 billion earmarked for expansion, approximately $800–900 million is expected to come from PLI incentives, while the remaining $1 billion is backed by private equity, notably TPG’s investment in the company.
PB Balaji, Tata Motors’ Group Chief Financial Officer, underscored the importance of the PLI incentives in a post-results conference call. “We are managing the entire business this way, and it is well-planned,” he said. “So, I’m very happy from that perspective that we will secure the PLI. Therefore, this will all go well for our continued investments in space in the future.”
Tata Motors has already accrued about Rs 350 crore from the scheme, of which Rs 143 crore pertains to the previous year, while the remainder is accounted for in the current fiscal period. “Therefore, we also know what it takes to claim. We are pretty confident this will play out over the next five years, and consequently, we will continue to plan for that,” Balaji noted. He added that PLI receipts will be an ongoing part of the company’s strategy, with claims being filed annually and accounted for on a quarterly basis.
The PLI scheme, designed to bolster India's manufacturing capabilities in advanced automotive technologies, has a budgetary allocation of Rs 25,938 crore. Incentives range from 13–18% for EV and hydrogen fuel cell components, while other advanced automotive technologies receive support between 8–13%. The scheme aims to enhance local production, reduce reliance on imports, and develop a robust supply chain for next-generation vehicles.
Balaji highlighted that Tata Motors is directing these funds toward the development of new technologies, infrastructure, and products. The company’s commitment to EV expansion was solidified in October 2021 when Tata Motors and TPG Rise Climate entered into a binding agreement. Under the terms, TPG Rise Climate, along with co-investor ADQ, committed Rs 7,500 crore ($1 billion) in compulsory convertible instruments, securing an 11–15% stake in Tata Motors’ EV subsidiary at an equity valuation of up to $9.1 billion.
As Tata Motors scales up its EV ambitions, the synergy between private capital and government support through the PLI scheme will be instrumental in shaping the company’s trajectory in India’s rapidly evolving electric mobility landscape.