Tata Passenger Electric Mobility or TPEM (Tata Motors’ electric vehicle arm) and JLR have now signed an MoU that will see Tata Motors licence JLR’s latest electric vehicle (EV) architecture currently under development
In hindsight, Tata Motors’ acquisition of Jaguar Land Rover (JLR) from Ford in 2008 has been one of the starring achievements of the firm. The company’s approach to letting these premium brands grow with a largely hands-off approach has worked, at least in the case of Land Rover.
However, a dissonance has always remained in how far apart these two luxury brands are from Tata Motors' value-centric creations. The completely different cost structures and manufacturing processes have limited synergies, a key factor in reducing costs. Tata Motors has reworked an older JLR architecture before in its high-end Harrier and Safari models. Still, a new development brings the two firms into a much closer partnership than before.
Tata Passenger Electric Mobility or TPEM (Tata Motors’ electric vehicle arm) and JLR have now signed an MoU that will see Tata Motors licence JLR’s latest electric vehicle (EV) architecture currently under development. TPEM will pay a royalty fee to gain access to this electrified modular architecture as well as to critical components like the battery pack and electric drive units. Significantly, there will also be a sharing of manufacturing know-how to a much greater extent than before which in effect means the two firms will co-develop EVs.
The first models based on this architecture will come to fruition in 2025. Tata Motors will incorporate this into its top-tier Avinya models currently under development late that year, while Jaguar and Land Rover branded offerings will also see light in early 2025.
This notably streamlines Tata Motors' big push to become an electric car maker of repute. The company has so far used frugal engineering and great product packaging to gain a sizeable head-start in the Indian EV market, but this partnership now future-proofs this advancement and opens up higher and more profitable segments for Tata Motors.
With battery cells and electric motors integrated into the structure, very high-speed charging capabilities, over-the-air updates for software and features, semi-autonomous driving capabilities and high safety, Tata Motors will have the latest in EV technologies on hand to not just challenge a wave of competitors lining up in the Indian market but also open up newer global markets to complement JLR’s offerings. These EVs are expected to have over 550 km of range, significant performance and charging speeds of up to 300 kW
Anand Kulkarni, chief product officer and head of high-voltage programs at Tata Passenger Electric Mobility, says: “The joint product development helps us reduce development cycles and improves TPEM’s access to global solutions. We can have opportunities arising out of aligned sourcing in order to leverage the benefits of scale and of location. And then in the future with data-based value-added services, this also becomes a common platform for connected vehicles, thereby giving us added services at an optimised cost proposition.Also read: We don't want to make an electric car, we want to make a Range Rover electric car: Lennard Hoornik of Jaguar Land Rover
In terms of the financial benefits, this leverages economies of scale for a shared bill of material, which is first and foremost. And then you have access to high-value tech, including domain-based architecture, high voltage architecture etc. With optimised upfront CapEx, all of this is available to TPEM and it also provides TPEM with the unique opportunity to optimise the industrialisation investments for the premium pure EV products in India.”
Kulkarni adds that this partnership has been in the works for some time with the announcement coming once reasonable targets for collaboration have been met. This development is a classic example of the changes the auto industry is going through currently with a shift towards electric mobility. EVs are generally less complex than petrol- or diesel-powered vehicles, so finding common ground between two price points isn’t as difficult.
While manufacturing and labour costs will be reduced, the technology is still pricey to develop, which is where partnerships like this are valuable for keeping costs in check. To this end, Tata Motors will be involved at an early stage in the development of this architecture to help meet its needs. Eventually, the company will also look at heightening local content in India to bring costs further down.
But there are some situations to negotiate. These EVs from Tata Motors will be their most premium offering yet and will see it compete at price points that are expected to be over Rs30 lakh. So far, Tata Motors’ EVs have succeeded with smart engineering and a high value proposition. But globally EV sales have slowed down in markets like the US largely with the high upfront cost involved and infrastructure not keeping pace. In India, a certain amount of government initiative has helped, but they are still a small share of the overall car market. This is especially true in segments Tata Motors plans to address with these offerings.
Kulkarni assuages these doubts by saying, “EVs have a high level of interest with our customers at Tata Motors. Our penetration today within our portfolio has been increasing constantly. It is at 13 percent today and, therefore, we see this as maintaining itself going forward. I think it also needs to be looked at from a perspective of forecasts or expectations earlier versus reality. There is no doubt that even today, EVs are one of the fastest-growing segments in the market. And there is no reason to doubt that with the value propositions that are available, more and more people will find that significantly useful for themselves. So once that happens, you need to have products set for these consumers across the entire range of products. It's not possible for us to have only products of a certain category and that's what we are attempting to do.”