Tube Investments Flags Battery Cell Supply Strain for Murugappa Group EV Business
Tightening global availability of battery cells has emerged as a key cost challenge for Murugappa Group's electric-vehicle businesses in Chennai, with prices expected to remain firm for at least the next two to three quarters despite improving sales volumes.
Speaking during the company's Q1FY27 earnings call, Mukesh Ahuja, Managing Director of Tube Investments of India (TII), stated that battery supply constraints formed a major hurdle in the first quarter and will likely persist. The company had previously expected battery-cell prices to soften following the phase-out of certain tax exemptions for Chinese manufacturers, but heightened global demand, particularly from the battery energy storage system (BESS) sector, has kept prices elevated.
To counter the cell-price squeeze, TII is taking mitigating steps such as pre-booking long-lead-time orders and locking in prices with cell and battery manufacturers. The supply issue comes as group entity Jayem Automotives expands its battery capabilities to support in-house requirements. Jayem's battery packs will primarily power small commercial vehicles and three-wheelers built by TI Clean Mobility (TICM), with potential future sales to external electric vehicle makers.
Despite margin pressures from commodity costs, TICM recorded its highest-ever quarterly turnover of approximately Rs 240 crore in Q1FY27, up from Rs 181 crore in Q4FY26 and Rs 135 crore in Q1FY26. Volume growth across heavy commercial vehicles, small commercial vehicles, three-wheelers, and tractors helped narrow operating losses.
TII continues to finance the expansion of TICM, planning to inject Rs 250 crore in Q3FY27 following an earlier infusion of Rs 250 crore in Q4FY26. Total funding support is projected to reach approximately Rs 750 crore.
In addition to domestic expansion, TICM has initiated export operations by shipping over 100 electric three-wheelers to Nepal, which it views alongside Sri Lanka as having similar operating conditions to India. The firm is also exploring markets in Tanzania and Ethiopia, and has begun pilot testing L3 electric three-wheelers in parts of Uttar Pradesh and Bihar.
