In EV space, India's demand will be about 7 million vehicles: Tata Chemicals CEO R Mukundan

R Mukundan's comments come days after an agreement was signed between a Tata Group subsidiary and the Gujarat government for setting up India’s first gigafactory for Lithium-Ion batteries in the state.

Tata Chemicals' Managing Director and Chief Executive Officer R Mukundan on June 5 said that overall assumption for India's demand in the auto sector will be about seven million vehicles. In addition, a large proportion of that will pivot towards electric vehicles (EVs), he added.

Speaking in an exclusive interview with CNBC-TV18, Tata Chemicals' chief also said that the company is the second derivative supplier to EV battery manufacturers.

Further, Mukundan added that a large part of Tata Chemicals' growth comes from the growth of two sustainability vectors: solar class and lithium carbonate. "So clearly, as the world pivots towards sustainability, I think we have opportunities, which are even in the current core, and added to that will be other chemicals which would come into play and that's one of the broad themes which we are working towards," he said.

Mukundan's comments come days after an agreement was signed between a Tata Group subsidiary and the Gujarat government for setting up India’s first gigafactory for Lithium-Ion batteries in the state.

As per the memorandum, Tata Group subsidiary Agratas Energy Storage Solutions Private Limited will initially invest Rs 13,000 crore for setting up a 20 gigawatt (GW) unit, stated an official statement from Gujarat government.

Further, when asked about Tata Chemicals' plans to enter the lithium battery space, Mukundan said that for every vehicle where there is need for EVs, there is a need for lithium carbonate. "...As we speak, even with the current play, we have a contracts with the lithium carbonate suppliers in South America and other parts of the world. So they do feed into the supply chain," he said.

Highlighting on Tata Chemicals' capex plan through FY24, the top executive pointed out the worldwide trend that is accelerating towards more sustainable mobility solutions. "If you look at our investment, 200,000 tonnes of capacity in India is getting commissioned and additional 300,000 tonnes is in the process of design. So half a million tonnes will be within India, about 100,000 will be in Kenya and another 400,000 tonnes in US. So, all in all, work is ongoing in terms of a million tonne additional capacity on our current capacity of 4.2 million tonnes and will be upping the capacity by about 25 percent in soda ash and other other products."

Moreover, Mukundan added that capex of about Rs 2,000 crore is ongoing, of which Rs 500 crore- Rs 600 crore would be the sustenance capex and about Rs 1,500 crore will be about the growth capex.

Meanwhile, shares of Tata Chemicals soared 5 percent in early trade on June 5 on the back of strong volumes as the company announced the restructuring of its US operations. In addition, the Tata Group's to setup a giga lithium-ion manufacturing facility in Gujarat also aided sentiment.

The scrip closed 2.67 percent higher at Rs 995.70 apiece on BSE.