TVS Motor to Expand Annual Two-Wheeler Capacity to 8.3 Million Units, Monthly EV Capacity to 80,000

TVS Motor Company is preparing to increase its annual two-wheeler manufacturing capacity to 8.3 million units from 6.8 million units by Q4 FY27, while expanding monthly electric two-wheeler capacity to around 80,000 units, as strong domestic and export demand drives further investment.

Speaking during the company's Q2 FY27 analyst call on Wednesday, TVS Motor management said the company was operating at around 60,000-65,000 electric two-wheelers a month, including domestic sales and exports, and had begun work on the next phase of expansion.

"We have already planned for the next level of capacity expansion to about 80,000. And many of the activities are already going on towards that," management said.
On broader manufacturing capacity, the company said it expected annual two-wheeler capacity to exceed eight million units, while three-wheeler capacity would approach four lakh units.

The expansion builds on plans outlined during TVS Motor's Q1 FY27 earnings call in July, when the company announced an addition of 1.5 million units to its annual two-wheeler capacity and an increase in three-wheeler capacity from 2.5 lakh to 4.2 lakh units. It had also outlined an investment programme of approximately Rs 3,500 crore covering capacity expansion and new product development.

The expansion comes after TVS Motor reported its highest-ever quarterly vehicle sales of 19.19 lakh units in Q2 FY27, an increase of 27% from 15.07 lakh units in the corresponding period last year.

Electric two-wheeler sales more than doubled to 1,86,186 units from 80,009 units, registering growth of 133%. In the domestic market, electric two-wheeler sales increased 129%, compared with industry growth of 84%, according to management.

TVS Steps Up Orbiter Production as EV Demand Grows

The company is increasing production and availability of its Orbiter electric scooter after initially prioritising the iQube to meet demand.

Management said the two models cater to different customer groups, with the iQube positioned as a family scooter and the Orbiter targeting a separate set of buyers.
"So Orbiter availability has gone up," management said, adding that the company had also started exporting the model.

Management indicated that further capacity expansion during Q4 would support Orbiter availability and volumes. However, it did not provide a specific completion date for reaching the proposed 80,000-unit monthly EV capacity.

Rising demand outside major cities is also supporting the company's electric vehicle business. According to management, rural EV demand grew slightly faster than urban demand during the first half of FY27, indicating that adoption is expanding beyond major cities.

International Markets are Contributing to the Expansion

TVS Motor's electric two-wheeler exports increased to 6,930 units in Q2 FY27 from 1,726 units a year earlier, and the company has also begun exporting the Orbiter.

Overall international sales of two-wheelers and three-wheelers increased 35% year-on-year to approximately 5.39 lakh units during the September quarter. Africa remained a major growth driver, supported by demand from Latin America and Asia, management said.

Three-Wheeler Capacity Expansion

Alongside electric scooters, TVS Motor is increasing its three-wheeler manufacturing capacity as demand strengthens in India and international markets.
Three-wheeler sales increased 47% year-on-year to 78,475 units during Q2 FY27 from 53,449 units a year earlier.

In the domestic market, three-wheeler sales, including conventional and electric models, grew 65% to around 26,300 units, compared with industry growth of 23%, according to management.

Management said electric three-wheelers accounted for nearly 44% of domestic industry volumes in Q2, with penetration approaching 48% in September.

The company expects further growth in its three-wheeler business during Q3 and Q4 and is increasing capacity to support demand in domestic and overseas markets.

TVS Motor's standalone revenue increased 44% year-on-year to a record Rs 17,103 crore in Q2 FY27, while net profit grew 52% to Rs 1,377 crore. Operating EBITDA rose 47% to Rs 2,219 crore, with the EBITDA margin improving to 13% from 12.7% a year earlier.

The company is also reviewing manufacturing capacity requirements for FY28 and beyond. Management said some capacity additions require longer planning periods and indicated that more detailed investment guidance for FY28 and FY29 could be provided during the next quarterly call.

"Definitely we have to look at capacity for next year because market pull in the market is pretty good," management said.