NEW DELHI: After prolonged discussions, Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors, and Ford India Private Limited (FIPL), have signed a Memorandum of Understanding (MoU) with the Gujarat government for a potential acquisition of FIPL’s Sanand (in Gujarat) facility.
However, there is yet no update on who would take over Ford’s Chennai plant. The signing of the MoU comes weeks after the US automaker took a U-turn and dropped its plan to make electric vehicles (EVs) in India for exports after participating in the Indian government’s $3.5-billion production-linked incentive scheme (PLI) for the sector.
TPEML said it would invest in new machinery and equipment, which is necessary to commission and make the unit ready to produce its vehicles. With the proposed investments, Tata aims to establish an installed capacity of 300,000 units per annum, which would be scalable to more than 400,000 units. Currently, Tata Motor’s peak production capacity is pegged at 50,000 units per month and given the aggressive expansion plan, it has to launch as many as 10 battery-powered vehicles by March 2026. The new facility is expected to play an important role for the automaker.
“This potential transaction will support the expansion of capacity, thus securing future growth and opportunity to further strengthen our position in the passenger and electric vehicles space,” said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles.
Ford, the iconic American car brand whose founder Henry Ford revolutionised the automotive industry in the early 20th Century, last year announced it will stop manufacturing vehicles in India due to accumulating losses. This exit was seen as a big jolt to Prime Minister Narendra Modi’s Make-in-India initiative. This acquisition can bring some form of relief to workers previously employed by Ford in the Sanand facility.