Chandrasekaran Says Tata Motors Will Step Up Green Investments

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Tata Motors Ltd, India’s largest commercial vehicle maker, plans to step up investment in cleaner mobility technologies as the truck and bus manufacturer seeks to position itself for a transport market being reshaped by electric vehicles, hydrogen powertrains and tighter emission norms.

Chairman N. Chandrasekaran said the company would keep investing in electric commercial vehicles and hydrogen-based technologies for heavier-duty transport, while also pursuing cleaner internal combustion engine options. The remarks came in Tata Motors’ Integrated Annual Report for FY26, its first full-year report as a commercial vehicles-only company after the demerger and listing of the business.

“Guided by Project Aalingana, the Tata Group’s vision for a greener, cleaner and more equitable future, sustainability is integral to your Company,” Chandrasekaran said in his message to shareholders. “The transition to cleaner mobility requires a portfolio of electric, hydrogen and cleaner ICE technologies. While we scale the portfolio of zero emission electric CVs, we will continue to invest in hydrogen-based technologies for heavier-duty segments.”

Commercial vehicles are harder to decarbonize than passenger cars. Buses and last-mile delivery vehicles can be electrified where routes are fixed, charging is centralized and fleet economics are easier to model. Long-haul trucks are a tougher problem, with heavier loads, longer duty cycles, uncertain charging infrastructure and an unresolved question over whether battery electric, hydrogen fuel cell or hydrogen combustion will win in different use cases.

Tata Motors acknowledged that use-phase emissions make up a significant share of its downstream footprint. The company said it is pursuing “vehicle efficiency enhancements” alongside alternative fuels such as CNG and LNG, battery electric vehicles and hydrogen technologies, covering both internal combustion engine and fuel cell applications.

The comments place greener mobility at the center of Tata Motors’ next growth phase, as India’s commercial vehicle market is expected to benefit from infrastructure spending, logistics demand and fleet replacement cycles.

The company said government programs such as the Production Linked Incentive scheme are likely to drive investments in electric and alternative-fuel commercial vehicles, while the sector continues to focus on emission reduction, fuel efficiency, telematics and fleet-management technologies.

Tata Motors said investment in future technologies continued “at pace” in FY26, with the company expanding its electric vehicle portfolio across buses, trucks and small commercial vehicles. The portfolio now covers last-mile delivery, heavy-duty haulage and public transport, while pilot deployments of hydrogen-powered trucks on select freight corridors marked a step forward in the company’s clean-mobility strategy.

The company said it is working with ecosystem partners to build infrastructure needed for wider hydrogen adoption. It also said its transport operations are moving beyond vehicle sales, with charging infrastructure for electric fleets, financing partnerships and collaboration with fuel and logistics partners forming part of its shift toward mobility solutions.

In urban transport, Tata Motors said TML Smart City Mobility Solutions had deployed more than 3,800 electric buses across 10 cities, crossed 500 million cumulative kilometers and delivered uptime above 95%. The company said the electric bus fleet demonstrated “scale, reliability and impact on urban mobility.”

The annual report said the company is “at the forefront of the nation’s transition to zero emission mobility” and offers the widest range of electric commercial vehicles in India across trucks, buses and small commercial vehicles. “Looking beyond battery electric, we are actively developing hydrogen fuel cell technology for heavy-duty and long-haul applications to address segments where electrification alone may not suffice,” the company said.

The greener mobility push is being backed by a stronger financial base. Tata Motors reported its highest-ever revenue of ₹83,855 crore in FY26, up 9.8% from ₹76,359 crore a year earlier. EBITDA margin rose to 12.3%, while the automotive business delivered return on capital employed of 72.3%, which Chandrasekaran described as “among the highest in the global commercial vehicles industry.”

Sales volumes rose to more than 435,000 vehicles from about 385,000 vehicles in FY25, helped by growth in intermediate, light and medium commercial vehicles, small commercial vehicles and pickups. The heavy commercial vehicle business achieved a 55% market share, its highest in a decade, according to the report.

Sustainability Transition

Tata Motors is also using the sustainability transition to expand beyond domestic commercial vehicles. The company said its proposed acquisition of Iveco Group would add a portfolio of light, medium and heavy commercial vehicles, operations across Europe, Latin America and other markets, annual sales of about 140,000 vehicles and 2025 revenue of €13.4 billion. Chandrasekaran said the transaction would add scale, manufacturing and powertrain capabilities, and “a strong technology roadmap aligned to evolving emission norms and alternative fuel powertrains.”

The company’s sustainability agenda extends beyond vehicles. Tata Motors said it is targeting net zero emissions across its portfolio by 2045 and 100% renewable electricity across operations by 2030. Renewable electricity accounted for 51% of total electricity consumption in FY26, supported by onsite solar, offsite captive wind farms, power purchase agreements and international renewable energy certificates.

The company said its decarbonization strategy is centered on shifting to 100% renewable electricity, improving energy efficiency and gradually eliminating conventional fuels from logistics operations. Renewable energy accounted for 34% of Tata Motors CV operations, while renewable electricity accounted for 51%. It reported 14,444 gigajoules of energy savings through conservation measures.

Tata Motors’ Scope 1 emissions stood at 44,904 tons of carbon dioxide equivalent in FY26, while Scope 2 emissions stood at 122,237 tons of carbon dioxide equivalent. Its Scope 1 and Scope 2 emissions intensity per vehicle produced improved to 0.39 tons of carbon dioxide equivalent from 0.44 tons in FY25, though absolute emissions rose as production volumes increased.

The company said it is driving decarbonization in operations by cutting fossil fuel use in manufacturing, switching from fossil fuels to electrical heating, continuing energy-conservation measures and moving to renewable electricity.

Circular Economy

Circular economy is another plank of the plan. Tata Motors said it launched Tatva, a framework to embed circularity across design, engineering, procurement, customer care, aftermarket services and end-of-life vehicle management. The company said Tatva is built around carbon efficiency, resource efficiency and revenue from circular businesses, supported by pathways covering material, energy, lifetime and utilization.

The company is also scaling ProLife and Re.Wi.Re, its vehicle lifecycle and scrappage initiatives. The report said 11 Re.Wi.Re registered vehicle scrappage facilities are operational, with annual scrappage capacity of 190,000 vehicles.

Tata Motors said three manufacturing facilities, Dharwad, Pantnagar and Lucknow, have been certified by CII-GBC for both Water Positive and Zero Waste to Landfill status. The company has set goals of Zero Waste to Landfill by 2030, Water Neutrality by 2030 and Water Positive status by 2040.

Biodiversity has also been folded into the company’s sustainability framework. Tata Motors said it has joined the corporate engagement program for Science Based Targets for Nature and conducted biodiversity baseline assessments at key sites, identifying more than 1,300 species. It has also listed Project Maximus, Central Asian Flyway and Go Green as flagship nature and biodiversity projects.

The company said its social investments benefited more than 209,000 people in FY26, with more than 30% of beneficiaries from marginalized communities. Its Integrated Village Development Programme now spans 194 villages across five states, covering areas including water conservation, education, skill development and healthcare.

Girish Wagh, managing director and chief executive officer, said FY26 was a defining year for Tata Motors Commercial Vehicles after the demerger and listing of the business. Operating as an independently listed entity is enabling “clearer capital allocation choices, faster decision-making and a deeper alignment between strategy and outcomes,” he said.

The company enters FY27 with what it described as sound fundamentals, though industry growth is expected to moderate from FY26’s high base. The underlying demand drivers remain constructive, supported by infrastructure activity, improving fleet utilization and the transition toward cleaner and more connected transport, the company said.