TVS Motor Lines Up Fresh Investments Of Rs 1,000 Crore In EV Push

India took one step closer to green energy transition with TVS Motor committing Rs 1,000 crore to electric vehicles, a sizeable part of which will go into capacity expansion and building the EV product portfolio. The automobile major has decided to invest Rs 1,000 crore investment for the second consecutive year, gearing up to double its EV production capacity to 25,000 units a month by year-end. It will be further stepping it up to 50,000 units a month in the following year, which will push the annual production capacity to 5-6 lakh units per annum.

Sudarshan Venu, MD of TVS Motor, has been quoted as saying, “The direction is clear. The company expects EVs to account for 30% of the scooter market and 35% of the three-wheeler market by 2025 and it is investing to grasp that opportunity. I think the electric vehicles are at the front end of our investment, there is a huge focus and higher mix of our investment towards EVs in the coming years. A significant part of Rs 1,000 crore investment announced has been substantially invested, we will continue to invest at a similar pace in the coming years,”

The exponential surge in demand of electric vehicles has made the EV sector more and more attractive for investments. Last year, TVS invested close to Rs 1,100 crore via its arm TVS Singapore. Of this sum, close to Rs 750 crore was in invested in Swiss E-mobility Group (SEMG), which TVS acquired last year, while Rs 130 crore was invested in EGO Corporation and the balance in Norton Motorcycle.

A sharp rise in investment stopped the free cash flow despite improved performance on higher volume and better cost efficiencies, underlining bullishness on part of the company for aggressive investments and market outperformance. The automobile major rung in around Rs 730 crore as capital expenditure in FY22, thereby recording a growth of 31% YoY. So, cumulatively it invested about Rs 2,100 crore on capital expenditure and investment in FY22. Furthermore, it is set for production of 25,000 units a month by the end of 2022.