Tata Motors has signed an agreement to purchase Ford’s production facility in the western state of Gujarat to be used for the production of electric vehicles.
Tata Motors is the largest manufacturer in the Indian electric vehicle market. The Indian government itself offers billions of dollars in incentives to companies to build an electric vehicle industry in India.
The memorandum of understanding between Tata Motors and Ford was announced on Monday. Under the agreement Tata Motors took over the land, assets and all eligible employees working at the Sanand facility.
It did not say how much Tata Motors had to spend to buy Ford’s production facilities in the western state of Gujarat.
The production facility will be refurbished with new equipment for the production of electric vehicles. Tata Motors targets the production facility to produce as many as 300,000 electric vehicles annually after the work is completed. Capacity can be increased to more than 400,000 units.
“Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth … this potential transaction will support expansion of capacity,” said Shailesh Chandra, managing director of Tata Passenger Electric Mobility Ltd.
Tata recently secured $1 billion in funding from private equity firm TPG for its electric vehicle business.
Tata Motors launched three electric vehicle models in April and hopes to maintain their position as an electric vehicle manufacturer in India.
Previously, Tesla held plans to sell electric vehicles in India because the negotiations between Tesla and Indian Government did not find a common ground.
