Tata Group has outlined an investment of Rs 13,000 crore ($1.58 billion) to set up a giga factory for lithium-ion cell manufacturing in Gujarat. The group on Friday signed a memorandum of understanding (MoU) with the Gujarat government, which will create a domestic supply chain for the manufacture og electric vehicles.
In the first phase, the proposed factory will set up and operate India’s first lithium-ion cell manufacturing plant with a production capacity of 20 Gwh.
The plant is expected to create direct and indirect employment opportunities for over 13,000 people, a joint statement by Tata group and the Gujarat government said.
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Vijay Nehra, CEO of Tata group subsidiary Agratas Energy Storage Solutions, and the Gujarat government’s secretary of science and technology signed and exchanged the MoU in the presence of Gujarat chief minister Bhupendra Patel.
An EV battery cell plant within the group augurs well for Tata Motors as this will eliminate the company’s dependence on third-party suppliers based in China and South Korea. These often expose the company to geopolitical tensions, supply chain disruptions and demand spikes by competition.
Tata group is also believed to be exploring the idea of setting up an EV battery plant in the UK or Spain to support the electrification plans of British luxury unit Jaguar and Land Rover. The UK government has offered £500 million in subsidies to build a battery plant in the UK for the group.
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In 2021, Tata Motors carved out a separate EV company called Tata Passenger Electric Mobility, where it brought in external funding of $1 billion from TPG and Abu Dhabi state holding company ADQ, giving it a valuation of $9.1 billion. Tata Motors has pledged to invest more than $2 billion in its EV business over five years.
Th group is already the market leader in the passenger EV space with a market share of more than 85%, and is among the leading players in the electric commercial vehicle category with buses and small trucks.
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