Tata Motors to raise $1 billion for its passenger EV business led by TPG Rise Climate

India’s leading automobile company Tata Motors on Tuesday said TPG Rise Climate along with ADQ will invest $1 billion in its passenger electric vehicle (EV) subsidiary business.

This investment will come at a valuation of $9.1 billion.

ADQ is the holding company of the Abu Dhabi government with investment interests spanning multiple sectors. TPG Rise Climate, set up in early 2021 by global impact investing platform TPG Rise, aims to invest in entrepreneurs and businesses working on climate solutions across the world. In late July, TPG Rise Climate announced the first close of $5.4 billion in subscriptions to its inaugural fund.

TPG Rise Climate along with co-investors shall invest Rs 7,500 crore in compulsory convertible instruments to secure between 11  to 15 percent stake in Tata Motors' new EV subsidiary, translating to an equity valuation of up to $9.1 billion, according to a statement.

The new EV company, according to the statement, will leverage existing investments and capabilities of Tata Motors Ltd and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies, and catalyse investments in charging infrastructure and battery technologies.

Over the next 5 years, this company will create a portfolio of 10 EVs and in association with Tata Power Ltd, and work towards ramping up charging infrastructure to facilitate rapid EV adoption in India.

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N Chandrasekaran, Chairman Tata Motors Ltd commented, “I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India.”

He further noted that Tata Motors is committed to playing a leading role in the government’s vision to have a 30 percent electric vehicles penetration rate by 2030.

Jim Coulter, Managing Partner TPG Rise Climate and Founding partner of TPG commented, “There is significant momentum around India’s EV movement, supported by the government’s vision and policies, as well as growing consumer demand for greener solutions. The investment aligns with TPG Rise Climate’s focus on decarbonized transport and builds on TPG’s long history in India.”

The first round of capital infusion is expected to be completed by March 22 next year and the entire fund will be infused by end of 2022.

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