Tata Motors Aims for Market Share and Margin Growth by 2027

Tata Motors plans to boost its commercial vehicle (CV) market share to 40% by 2027 while achieving double-digit EBITDA, alongside strengthened EV profitability and cutting-edge SDV investment.

CV Business – Acceleration & Efficiency

• Tata’s CV division plans to “step up the pace”, targeting a 40% market share by 2027 with teen EBITDA margins (10–19%).

• FY25 results:

  • CV EBITDA margin: 11.8% (up 100 bps YoY)

  • Free cash flow: ₹7,400 cr (10% of FY25 revenue)

  • ROCE: 37.7%

• Industry outlook favourable, with freight demand rising, stable fuel costs, and targeted investment in decarbonisation and connectivity via Software Defined Vehicles (SDVs).

EV & Passenger Vehicle (PV) Strategy

• EV arm broke even on EBITDA in FY25, marking a turnaround in profitability.

• EV growth targets:

  • 20% penetration by FY27

  • Over 30% by FY30

• Strong funding secured for EVs over the next three years, with cost convergence planned between EVs and ICE vehicles.

• Launch focus on Harrier EV and upcoming Sierra EV, aiming to reclaim falling EV market share (35% in May 2025 vs ~66% a year ago).

Profitability & Market Context

• In FY25, PV & EV business set a target of ~10% EBITDA by FY30.

• Despite heightened competition from rivals like MG, Hyundai, and Mahindra, Tata is focusing on the SUV and fleet segments, using a wide product portfolio and improved after-sales to drive volumes.

Facing Trade Risks & Competition

• Management acknowledges global trade uncertainty may add volatility—but underlined in-house discipline and robust fundamentals that support CV business resilience.

• Strategic investment of ₹33,000–35,000 cr boosts capacity to overtake Hyundai and M&M in passenger vehicle space.

Bottom Line: Three Pillars of Tata’s Growth Strategy

1. Commercial Vehicles: Deepening market share to 40% by 2027 with strong margins and SDV-led innovation.

2. Electric Vehicles: Sustained EBITDA growth, ramp-up in market share via Harrier EV & Sierra EV.

3. Product Expansion & Efficiency: Large investment backed by cost convergence and after-sales improvements.