Tata Motors Ltd. has identified significant bottlenecks in its electric vehicle (EV) supply chain, primarily concerning the procurement of imported battery cells. This comes as the demand for EVs continues to surge, putting pressure on the availability of crucial components.
EV Battery Cell Supply Challenges
Girish Wagh, MD & CEO of Tata Motors, highlighted the issue during a post-earnings media conference call. "We have seen bottlenecks in the EV supply chain because of a significant increase in demand, and we are facing a shortfall in some of the imported materials, especially cells, which is a long lead-time commodity," Wagh stated. He emphasized that battery cells require extensive advance planning and ordering due to their prolonged lead times.
To address these supply constraints, Tata Motors has already implemented measures. The company expects the EV supply chain to be largely de-bottlenecked towards the end of the second quarter of the fiscal year 2027 (Q2 FY27).
Rising Demand and Import Trends
The challenges faced by Tata Motors underscore a broader trend of increasing demand for electric vehicles, which strains the global supply of key components. Commerce ministry data reveals a substantial increase in India’s lithium-ion cell imports, which surged by 64% year-on-year to ₹41,667 crore in FY26. Over the past five years, these imports have grown fivefold, illustrating the rapid expansion of the EV market.
Financial Performance Context
These supply chain discussions coincide with Tata Motors' strong financial performance. For Q1 FY27, the company reported a consolidated revenue of ₹20.7K crore, marking a 19% year-on-year increase. While the EBITDA margin stood at 10.9% (down 90 basis points), profit after tax saw an impressive 83% rise, reaching ₹2.6K crore.
In other developments, the Tata group's commercial vehicle division is nearing completion of its proposed Iveco transaction, with regulatory approvals in their final stages; only one approval from Spain remains pending.