Tata Motors aims to race past Hyundai, M&M riding on Rs 35,000 crore of investments

Tata Motors has shared ambitious plans to stay ahead of its peers and gain greater market share in Indian passenger vehicle market with Rs 33,000 crore to Rs 35,000 crore cheque it plans to keep ready for investments.

The Indian automaker also set its sights on expanding its passenger vehicle market share to 16 per cent by FY27, even as its share remained unchanged at 14 per cent in FY25. However, in the next two-three years, the automaker aims to beat its Korean counterpart with a longer-term target of reaching 18-20 per cent.

The automaker said that capital allocation over FY26-FY30 will be sharply focused on electric mobility, software-defined vehicles (SDVs), and new-age powertrains, product innovation, feature-rich launches, and higher EV penetration to offset current challenges.

India’s top carmakers, including Tata Motors, saw mixed trends in market share in FY25 amid a slowdown in overall demand and rising competition in the SUV segment.

While Mahindra & Mahindra gained ground with a jump to 13 per cent, Tata Motors’ share held steady at 14 per cent, the same as FY24, following a three-year growth streak since FY21 when it stood at 8 per cent.

Hyundai's share, too, stood at 14 per cent market share in FY25.

Tata acknowledged multiple headwinds impacting profitability in FY25. These included demand moderation, increased dealer incentives to manage stock levels, and inflationary pressure on input costs and forex. Competitive intensity in the SUV space also limited price increases on feature-rich models, even as the salience of top-end trims declined.

Tata Motors' and Hyundai shares were trading at Rs 718.05 and Rs 1925.40 apiece, up 0.95 and 3.50 per cent respectively on the BSE as of 12.08 PM.

TaMo is charged by EVs

Tata’s electric vehicle (EV) plans remain a cornerstone of its growth strategy. The company aims to achieve 20 per cent EV penetration in its passenger vehicle portfolio by FY27 and over 30 per cent by FY30.

This comes at a time when competitive pressure has risen significantly in India’s SUV and EV segments. Hyundai, Maruti Suzuki, and Mahindra are adding pressure in the ICE space, while the electric vehicle market is getting more crowded. Global entrants like BYD, MG Motor, and now Vietnam’s VinFast are stepping up their presence.

Tata Motors holds a 38 per cent market share in the EV space, followed by MG Motor at 29 per cent and Mahindra at 16 per cent. India’s electric car sales in 2024 rose 20 per cent year-on-year, nearing 1 lakh units.

VinFast is set to open a car assembly plant in India by June-end, following a $500 million investment under a larger $2 billion commitment to Tamil Nadu.

Backed by Vietnam’s Vingroup, VinFast, began EV production in 2021 and had initially focused on the U.S. market. However, delays and regulatory challenges in the US prompted the company to diversify.

Its India push now aligns with the growing list of Asian automakers looking to capture a slice of India’s fast-expanding EV market.

Meanwhile, Tesla, which had registered a local unit more than four years ago, is yet to launch operations in India.

While Tata Motors leads the domestic passenger EV market key rivals are also scaling up their efforts:

• Mahindra is preparing to launch its INGLO platform-based BE and XUV.e series, focusing on performance and premium positioning.
• Hyundai and Kia have introduced dedicated EV models such as Ioniq 5 and EV6, with fast-charging features and global EV architecture.
• Maruti Suzuki, though relatively late, has committed to rolling out its first electric SUV in 2025, with joint support from Toyota. The company is also targeting to become number one EV manufacturer in India within one year,
• MG Motor plans to localize battery assembly in India.

Tata Motors also expects to deliver a positive EBITDA from its EV division in FY26, with volume growth continuing ahead of the broader market.

“We are committed to strengthening our market position and improving profitability. Free cash flow of Rs 1,000 crore and double-digit EBITDA margins remain our medium-term goals,” the company stated in the presentation.

Furthermore, the automaker also plans to expand its charging infrastructure five-fold by FY26.

As of FY25, the company has over 22,000 public charging points, and over 1.8 lakh home chargers. Tata Motors aims to scale this to 1 million home chargers and over 100,000 public charging points by FY30.

The company is also introducing “Mega Chargers” with 120kW capacity on 40+ mobility corridors, connecting over 100 cities across 20 states. These ultra-fast chargers will offer preferential tariffs, remote tech support, and seamless access via the iRA.ev app.

Looking ahead, Tata Motors expects demand growth to stay muted and competitive pressures to remain elevated. It aims to sustain momentum through key product launches including the Sierra SUV in the second half of FY26 and several refreshes with enhanced features.