Tata Motors has reached a key milestone in its electric vehicle (EV) journey by reporting positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for FY 2024-25. This achievement highlights the company’s strategic turnaround and places it among a limited number of global EV manufacturers that have reached operating profitability — despite facing a decline in revenue and rising competition from automakers like MG Motor and Mahindra & Mahindra.
Tata Motors reported total EV revenue of ₹8,187 crore in FY 2024-25, compared to ₹9,285 crore the previous year — marking a significant dip. The company's retail market share in the EV segment also declined, falling from 73.1% to 55.4% year-over-year.
This drop in both revenue and market share reflects intensified competition in India’s booming electric vehicle industry. New entrants and aggressive product strategies from rivals have challenged Tata’s leadership in the EV space.
Despite these headwinds, Tata Motors managed to post a positive EBITDA margin of 1.2%, a remarkable improvement from negative 7.1% recorded in FY24. The return to profitability demonstrates the success of cost control measures and strategic realignments undertaken over the past year.
The automaker’s efforts in improving operational efficiency, along with a stronger focus on local sourcing and production optimization, have been pivotal in achieving this financial turnaround.
Tata Motors attributes its improved margins to several operational and policy-driven factors:
Increased localization of EV components helped significantly reduce manufacturing costs.
Aggressive cost rationalization across divisions further boosted operational performance.
Support from the Indian government’s Production Linked Incentive (PLI) scheme played a key role. Tata Motors received a total of ₹527 crore under the scheme, including ₹385 crore for FY25 and ₹142 crore carried over from FY24.
These initiatives provided the cushion Tata needed to manage lower sales while keeping profitability intact.
In FY25, Tata Motors' other income, which includes government subsidies and export incentives, rose to ₹3,458 crore, up from ₹2,971 crore in FY24. This included:
Export and miscellaneous incentives of ₹1,021 crore, a jump from ₹617 crore in FY24.
R&D tax credits claimed by foreign subsidiaries, totaling ₹2,438 crore in FY25 versus ₹2,354 crore the previous year.
These financial incentives enhanced the company's cash flow and liquidity, reinforcing its capability to invest further in EV innovation and infrastructure.
Tata Motors’ luxury arm, Jaguar Land Rover (JLR), also contributed positively to the company’s financial health in FY25. JLR posted foreign exchange gains of ₹981 crore, compared to ₹190 crore in FY24. This improvement was driven by:
Favorable currency fluctuations
Fair value adjustments in financial instruments and global operations
This performance from JLR, although not directly tied to the EV business, helped bolster Tata Motors’ consolidated earnings.
While Tata Motors saw a dip in EV revenues and market share, its ability to turn EBITDA positive in a competitive and evolving market reflects the strength of its long-term strategy. The company's focus on cost management, government-backed incentives, localization, and selective product development investments is proving effective.
As the Indian EV market continues to expand with rising demand and newer players, Tata Motors' ability to maintain profitability while preparing for future growth positions it as a resilient and forward-looking player.