Acquisition of the Sanand plant will boost Tata Motors’ EV strategy.

Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Private Limited (FIPL), have signed a Memorandum of Understanding (MoU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.

The MoU covers land and other assets at the Sanand facility. Under the agreement FIPL will operate its Powertrain manufacturing facilities by leasing back the land and buildings of the Powertrain unit from TPEML.

TPEML would invest into new machinery and equipment which is necessary to commission and make the unit ready to produce its vehicles. With the proposed investments, it would establish an installed capacity of 300,000 units per annum, which would be scalable to more than 400,000 units, it says.

Announcing the signing of the MoU, Dr. Rajiv Kumar Gupta, IAS, Additional Chief Secretary, Government of Gujarat, said: “This MoU is intended to catalyse a win-win for all the stakeholders and ensure a smooth transition. This effort reinforces Gujarat’s image as a progressive, investment-friendly state and its resolve to further strengthen the state as a leading automotive hub in the country. It will boost the confidence of the international investment community, reinforce Gujarat’s position as the top investment destination in the country and further strengthen the Atmanirbhar vision of our Hon’ble Prime Minister.”

Mr. Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said: “Tata Motors has a strong presence in Gujarat for more than a decade with its own manufacturing facility at Sanand. This MoU further reinforces our commitment to the state by creating more employment and business opportunities. Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth for the company over the past few years. This potential transaction will support expansion of capacity, thus securing future growth and opportunity to further strengthen our position in the passenger and electric vehicles space.”

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By GlobalData

The MoU will be followed by signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks, Tata said.