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Tata Motors’ EV arm turns Ebitda positive despite dip in sales and market share

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Tata Motors’ electric vehicle (EV) business achieved a positive operating margin before depreciation and amortisation (Ebitda) in the fiscal year 2024-25, placing it among a small group of EV manufacturers globally to reach this milestone, the company said in its latest annual report.The turnaround in margins came even as EV sales dipped and its market share declined due to intensifying competition from rivals like MG Motor and Mahindra & Mahindra.India’s leading EV player by volume, Tata Motors reported that revenue from its EV division fell to Rs 8,187 crore in FY25, down from Rs 9,285 crore in FY24. Its retail market share also dropped significantly—from 73.1% to 55.4% over the same period. However, the Ebitda margin showed a marked improvement, climbing to 1.2% from a negative 7.1%—an increase of 8.3 percentage points, according to an ET report.“In the EV segment, we became one of the few global manufacturers to achieve positive EBITDA, on the back of a higher level of localisation, aggressive cost reduction, and securing PLI benefits,” Tata Motors stated in the annual report.The improved profitability was underpinned by multiple factors including increased localisation of components, cost-cutting measures, and government-backed support through the Productivity Linked Incentive (PLI) scheme. The PLI benefits amounted to Rs 527 crore, comprising Rs 385 crore earmarked for FY25 and Rs 142 crore received for FY24.Tata Motors’ total other income, which includes various government incentives, rose to Rs 3,458 crore in FY25, compared to Rs 2,971 crore the year before. This included export and other incentives worth Rs 1,021 crore and Rs 617 crore for FY25 and FY24 respectively. Additionally, the company’s foreign subsidiaries benefited from tax credits on research and development expenditure, receiving Rs 2,438 crore in FY25 and Rs 2,354 crore in FY24.Jaguar Land Rover (JLR), the UK-based luxury subsidiary of Tata Motors, posted a strong year in terms of foreign exchange gains. JLR recorded an exchange gain of Rs 981 crore in FY25, up sharply from Rs 190 crore in FY24, attributed to currency movements and fair value adjustments.Despite short-term pressure on EV sales, Tata Motors’ ability to turn Ebitda positive highlights the benefits of structural cost efficiencies and strategic government support, positioning it more strongly for future growth in the fast-evolving EV landscape.

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