N Chandrasekaran believes Tata Motors can achieve net-zero automotive debt by FY24

17 Jun 2022 , 11:17 AM

“We are dedicated to restoring the profitability of this sector as it returns to competitive growth and inflation stabilizes,” Chandrasekaran stated in his message to shareholders in the FY22 annual report.

N Chandrasekaran, chairman of Tata Motors, claims that each of the company’s divisions is self-sustaining, which gives him confidence in achieving net-zero automotive debt by FY24.

Commercial Vehicles, Passenger Vehicles, and Jaguar Land Rover are currently three separate business units under the Tata Motors Group. In his letter to shareholders, the Chairman stated that this provides differentiated value propositions to their various consumer segments while exploiting backend and corporate synergies whenever possible.

“Tata Motors is now lean, nimble, and customer-focused as a result of this. Each of these businesses is self-sustaining, so I’m optimistic that by FY24, we’ll be close to zero net automotive debt. Tata Motors is taking concerted steps to ensure that it is future-ready and that our shareholders benefit from a virtuous cycle of development and profits “he stated

To guarantee its EV supply chain, the Chairman highlighted that the Group is actively considering partnerships in battery cell manufacturing in India and Europe. Chandrasekaran described FY22 as a “busy year” for the company, as it faced numerous obstacles while effectively strengthening the company’s fundamentals.

Tata Motors’ global wholesales climbed by 20% to 1,086,734 automobiles, and revenues increased by 11.5% to Rs278,454 crore, compared to FY21.

At Rs9,472 crore, the year’s free cash flow (automotive) was negative (compared to positive Rs5,317 crore in FY21). This, according to Chandrasekaran, is mostly due to adverse working capital.

Chandrasekaran elaborated on the global macroeconomic situation, stating that recent history has been unrelenting, with global pandemics, armed conflict, expanding inequality, supply chain problems, and more “decades of experience have been compressed into just two years. Businesses have had to respond quickly and nimbly to this unprecedented series of events “He went on to say. While these changes have had a significant impact on businesses and communities, he believes they have also expedited certain critical future developments.
 
“The energy revolution is irreversible (and will) migrate to green mobility,” the Chairman stated. “There is a need for supply chain rebalancing to become robust, and the digital transition of Artificial Intelligence and Machine Learning has become popular.”
 
According to Chandrasekaran, the global semiconductor shortage had a disproportionately negative impact on Jaguar Land Rover’s production and sales relative to its competitors in FY22.

“Despite our efforts to address the problem, the situation continues to be difficult. This is a critical issue for Jaguar Land Rover, and we are working hard to fix it in FY23 “he reaffirms.

Chandrasekaran stated in the Tata Motors Group’s sustainability roadmap that the change to sustainable mobility is “irreversible” and that the company will be among the global leaders in green mobility. “We want to achieve Net Zero emissions by 2039 for Jaguar Land Rover, 2040 for PVs, and 2045 for CVs, and we’re well on our way.”
 
Jaguar will be totally electrified by 2025, while Land Rover will have six battery-electric vehicles on the road by 2026. By 2030, Jaguar Land Rover intends to sell 60% of its vehicles as pure BEVs.

“EV penetration in our portfolio is projected to expand further to 25% in 5 years from 7.4% as of Q4 FY22,” Chandrasekaran said in India. By 2025 Tata Motors intends to have a portfolio of 10 Electric Vehicles.