Just In

With Ford’s Sanand plant, Tata Motors furthers its pursuit for demand-supply equilibrium for EVs

/2 min read

ADVERTISEMENT

With this acquisition, the most aggressive player in India’s burgeoning electric PV space ostensibly will sate the robust demand for EVs, despite geopolitical and inflation concerns looming large.
With Ford’s Sanand plant, Tata Motors furthers its pursuit for demand-supply equilibrium for EVs
Tata Motors would invest into new machinery and equipment at Ford India' Sanand plant. Credits: Getty Images

Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors, along with Ford India Private Limited, has signed a memorandum of understanding (MOU) with the government of Gujarat, paving the way for potentially acquiring Ford India’s sprawling, state-of-the-art facility in Sanand. The acquisition will help Tata Motors accelerate the enhancement of its passenger and electric vehicle manufacturing capacity. However, when Fortune India sought clarification, the company did not disclose the exact volumes of electric vehicles it plans to produce at this facility.

The MoU is subject to the signing of definitive agreements and receipt of relevant approvals. The definitive transaction agreements will be signed over the next few weeks. Through this MoU, Tata Motors will acquire the land and buildings; the vehicle manufacturing plant; machinery and equipment, and transfer of all eligible employees of Ford India Sanand’s vehicle manufacturing operations. Ford will operate its powertrain manufacturing facilities by leasing back the land and buildings of the powertrain unit from Tata Motors. This unit is adjacent to the existing manufacturing facility of Tata Motors at Sanand, which, according to the company, should help in a smooth transition.

Fortune India Latest Edition is Out Now!
40u40: India's Brightest Young Business Minds

July 2025

In the world’s youngest nation—where over 65% of the population is under 35—India’s future is already being shaped by those bold enough to lead it. From boardrooms to breakout ideas, a new generation of business leaders is rewriting the rules. This year's Fortune India’s 40 Under 40 celebrates these changemakers—icons in the making like Akash Ambani, Kaviya Kalanithi Maran, Shashwat Goenka, Parth Jindal, Aman Mehta, and Devansh Jain—who are not just carrying forward legacies but boldly reimagining them for a new era. Alongside them are first-generation disruptors like Sagar Daryani, scaling Wow! Momo with a vision to take ₹100 momos to 5,000 cities, and Palak Shah, turning the Banarasi weave into a global fashion story with Ekaya Banaras. These are the entrepreneurs turning ambition into scale. And even beyond traditional industry, the entrepreneurial wave is pulling in creative forces—Ranveer Singh, for instance, is shaking up wellness and nutrition with Bold Care and SuperYou, proving that passion, backed by purpose, is the new blueprint for building brands.

Read Now

“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,” Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, says on the development. Additionally, Dr. Rajiv Kumar Gupta, the additional chief secretary of the Gujarat government, says that this transition will entail smoothly, and it will further the government’s resolve to make the state a leading automotive hub in India.

Tata Motors would invest into new machinery and equipment — which it deems 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. “We anticipate this to take a few months,” the company adds.

Chandra told Fortune India earlier that its Tigor EV currently occupies a penetration level of 30%, whereas Nexon has a level of 17-18%, which, according to Chandra, is because of the supply-side constraints. “On the demand side, the penetration level is much higher. In fact, we’re not able to match our supply with the demand. That’s the challenge that we’re facing,” he explains.

With Ford’s exit from the Indian shores and a joint venture with Mahindra failing to see the light of day, speculation was also rife on who would lay their hands on this expansive manufacturing plant. According to the company's quarterly press briefing, its PV business delivered a comprehensive turnaround in Q4 FY 22 — with its highest quarterly revenues of ₹10,500 crore. Its EV volumes rose to 9,100 units in Q4, and PV market share improved to 13.4%.

Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.