TATA Motors EV business posts positive EBITDA margin

Tata Motors’ electric vehicle segment posted a positive EBITDA margin in FY25 despite a demand dip in the first half of the year due to the expiry of government incentives and subsidies.

EBITDA, which stands for earnings before interest, taxes, depreciation and amortisation, margin shows the company’s operating profit as a percentage of its revenue. A positive EBITDA margin indicates that the company is generating more revenue than its expenses before accounting for interest, taxes, depreciation, and amortisation.

However, the company also reported a 11.8% decline in FY25 revenue to Rs 8,187 crore compared to Rs 9,285 crore in FY24 due to the demand dip in H1. However the second half of the year saw a strong revival amidst new product launches and a growing charging network in the country.

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The slowdown in subsidies, coupled with the expiry of FAME II (Faster Adoption and Manufacturing of Electric Vehicles in India) initiative, also led to a 30% decline in the EV fleet segment.

Moreover, the pre-buying surge in March 2024 also triggered a slowdown in purchases for the months following, the company said in its annual report.

However, the company added that the segment is seeing signs of recovery, supported by improved market sentiments and the growth in the employee transportation segment.

TATA Motors, which is India’s biggest EV OEM with a 55% market share, believes that strong participation across OEMs will create greater consumer awareness and rising adoption in FY26, which will benefit the company.

“A steady stream of new product launches across segments is expected in FY26, which will broaden customer choice, while ongoing advancements in technology and policy direction will steadily reduce barriers to adoption,” it said.

TATA Motors, which has a rich EV portfolio including Tiago.ev, Curvv.ev, Punch.ev, Nexon.ev, and Xpres-T, recorded EV sales of 64,269 units in FY25, bringing its total EV sales since inception to over 2 lakh units.