Tata Motors Passenger Vehicles Limited (500570) Earnings Call Transcript & Summary

Greetings once again. I'm Sneha from the Investor Relations team. And on behalf of the management, I would like to welcome you to Tata Motors India Investor Day Meet 2023. Today, we would like you -- like to take you through in a bit more detail the progress that we've been making on implementing our strategy for our India business, while we do a similar session on JLR at U.K. on Monday, 12th of June. So today, through a series of sessions, we intend to share with you how far we have come and what are our plans to accelerate into a sustainably profitable future. So the agenda for today looks like this. Can we have the agenda slide, please? I'll just read that on for a bit. So as you can see, it will be a comprehensive outlook of the business as it stands today and the strategic initiatives underway to secure the future. We hope you will find the sessions today engaging, and we look forward to clarifying even further while interacting with you during the breaks and a detailed Q&A session planned for later in the day. So we'll first start with the PV/EV business. It's been a phenomenal year for the passenger and electric vehicle business. We've seen multiple new records and witnessed several lifetime high moments and are further poised to seize the significant EV transition underway that India is witnessing. May I request Mr. Shailesh Chandra, Managing Director, Tata Motors, Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited to please come on stage and share with us the transformative journey of the PV/EV business and the plans ahead for sustainable market share wins. Please.

So very good morning to all of you. It's a pleasure to give an update on Tata Motors passenger vehicle and the electric mobility business. In the next 1 hour, I'm going to present, starting first with a recap of the 3-year journey in terms of performance and various initiatives that we took for a massive turnaround that we have posted in this period. Subsequently, I'll touch upon the key future trends, which are going to impact the PV industry. And finally, the pillars on which we will base our sustainable profitable growth. Winning sustainably in PV space and winning proactively in the EV space and maintaining our leadership position. So let me first start with the performance. So we have seen a very sharp growth trajectory. Both the businesses have achieved the lifetime highs on operational as well as financial metrics. Starting with the left most chart. After hitting the rock bottom performance in FY '20, which was 133,000 vehicles that we sold in that year at a 4.8% market share. In the last 3 years, we have grown fourfold to 541,000 posting a market share of 13.9%, which is roughly a 60% CAGR in the last 3 years as compared to the industry, which has grown at the rate of 11%, 12%. Of course, the revenue growth is even much higher as compared to 4x growth in volume. The revenue growth has been 5x, which is also an indication of a rich mix. And EBITDA has seen a swing of INR 4,000 crores from where we were in FY '20. What have been the pillars of this success? 5, and I'll talk about them in detail in the slides which will follow. Aspirational product portfolio, I think this is the key. I mean, if this is not the encourage for your company, you can't grow. So there has been a lot of work in terms of bringing quite a paradigm shift in terms of how we designed our portfolio to drive this kind of success. Front-end had been a problem for us. And this was completely reimagined and there were a set of initiatives that we took, which really helped in making all the products shine in our portfolio. As we were creating demand, there was a need to ramp up the volumes fast to capture that demand, and there were several operational debottlenecking actions also that we took. Tata cars were not known for good quality in the past. The perception was very poor. There was a series of initiatives that we started to really work on process capabilities, fail-safing, and that is what I'm going to talk about. And finally, we led the charge in the EV space and with a different approach, not just bringing products, but an ecosystem approach, and I'll talk about it. So these are the 5 pillars around which this whole turnaround was based. Starting with the product portfolio. On one side, there were multiple opportunities, of course, in terms of subsegments and segments in the product space in terms of body style, in terms of size of the cars. But we chose to play and -- play in those segments, which are going to grow fast in future and which we're going to grow big in size. So that was one aspect. But the second bigger aspect was the pillars on which we'll base these products, and there were 3 basic what we call core tenets was the entire portfolio was reimagined on 3 core tenets, which was design, safety and technology. World-class design. Our customers are young now. The average age of customers has significantly come down as compared to what it was 10, 15 years back. 65% of our customers are less than 35 years age. They are very bold, confident, self-expressive personality. And that should be reflecting in the cars that they own. And this was a trend that we caught quite early and with the impact design language, which was around expressive surfaces, extraordinary detailing and a very strong road presence. Our cars, I can confidently say are known in the market for most different looking and stylized cars. So this was one big pillar. Safety was always seen as an inherent part of Tata cars. Even when we didn't have an objective way of saying how safe our cars were, it was only when GNCAP rating came that we were able to objectively conveyed. But Tata cars were always safe. But this gave us an opportunity with the GNCAP rating to convey this to the market. There was a lot of work done behind it to work on the area of passive safety. But now also, we have started going fast in the area of active safety. So today, if you ask anybody on the street, they'll say Tata cars are the most safe. And this has been because of a lot of campaigns behind safety and consistent communication around this. New technologies, and this is also where there has been a drastic perception change in the Tata cars. So it is about giving modern HMI. It is about the connected car features and so on. So these are the 3 pillars on which the entire product portfolio was really based upon Additionally, what we did is that the competition is intensifying. There are multiple launches that you keep hearing every month, and you can't be launching products so often. So what you do, how you keep the excitement on in your portfolio. And this is where we came with very smart interventions, what we call as new for our interventions, which are basically variants and special additions to sustain the interest by addressing new micro segments of customers. And I'm sure you would have heard about the dark range of vehicles for the higher end of our portfolio. And recently, we also further made it more premium with advanced safety features, which was the Red Hot Dark addition. In the past, we came with a sportier version of Tiago, there was a Kaziranga edition, which was just to convey that our cars can go really -- our SUV can go anywhere in the country and also paying homage to the national parks in the country. Safari Gold was an effort towards premiumization of our portfolio, and that was also taken very well. So there are several such interventions, which kept the excitement of each of our products very high in the market. So we ask for a video here for the new forever range, please? [Presentation]

This growth has not only come from adding new products. The idea was also to ensure that each product that we had in our portfolio reached the rightful level of volumes. And we're in the top 3 in their respective segments. And that has been the effort in the last 3 years, and that's what you see from FY '20 to FY '23, how the situation changed. Compact SUV is definitely an area where we have seen the biggest success with the combination of Punch and Nexon. And when we launched Nexon in FY '17, we were #3 and the competition was also less intense that time. Nearly everyone has one product in this segment today out of all the 13, 14 players that we have in the market. But despite the increasing competition, we have become #1 and moved our market share from 12% to 35%. Nexon has moved from a volume of 4,000 to 15,000 in this period. Punch has been a new addition, and that has really helped us grow in this segment also. When we launched Harrier in FY '19, that time, we were at 26%, but there were only 2 players. We were #2. Now there are 5 players. We have held the position of #2. And in certain months, we are #1, #2, but these -- both these 2 products are doing really well. In the mid hatch segment, we were #4 in FY '20, we are today #2, significant increase in the market share. In the premium hatch segment, we launched the car in FY '20. So that market share is not very relevant, but we are in #3 position here. And this is further strengthening with some of the additional variants like CNG and all that we have already launched last month. Entry sedan, I think in FY '20, this was a product which was very weak, possibly last at the bottom of the pile. Last year, we were very close to we just missed by a [indiscernible] as far as #3 position is concerned, but this has been a big turnaround story for the Compact segment for us. So all the products have been doing well in the portfolio because otherwise, the sustainability of the volumes that we have attained and market share would have been a question mark. Coming to EVs now. We have led the charge in the EV space. We have systematically been expanding our portfolio. And we have one product placed in each of the 3 body styles, which is hatch, sedan as well as SUVs. Starting with the right most because this was the first personal segment vehicle that we launched, which was Nexon EV. And you'll see in the graph below, this is not what you see when you launch a product and how the volumes are for a period of time in the life cycle. It started with 3,000 and it has gone up to 27,000, which means that the adoption has been growing. The early movers or the early adopters who would have bought this car in FY '21 have given a lot of positive word of mouth, and that has really helped in driving the adoption. So every year, Nexon has been seeing growth as far as its volume is concerned. And same is the story for the entry sedan, both Xpres-T, which is positioned in the fleet segment. Which we are going to come with more interventions in this space, which would further take up this volume. The recent launch has been the Tiago EV, 10,000 booking on the first day, a very successful ICE launch would also possibly not get this kind of a booking, which shows the mainstreaming of electric vehicles that we have already started seeing. And this did 10,000 cars within 3.5 months possibly, we would have lend 10,000 cars in Nexon maybe in 2.5 years. So this is the kind of change that you're seeing in terms of adoption of EVs. And in the last 3 months since its launch, the volumes have been growing and it is hitting 3,400, which is nearly 40% of Tiago sales. So deep penetration within that product. The other notion is that possibly as we launch more products in the EV space, it will start cannibalizing the earlier product. I think this is a clear case where we have seen that not only it is bringing new customers, but also it is making EVs relevant even in the smaller towns in the country. And this is what this data shows that Nexon EV. Primarily, the demand used to come from the top 20 cities or top 10 cities. Here, 50% of the bookings in Tiago EV is coming from outside of top 20 cities. And we are seeing penetration of Tiago EV in smaller cities, Bilaspur, Satara, Shimoga and a lot of small towns in Kerala. Kerala is actually the second highest-selling EV state in the country. Also from a customer segment perspective, [ Nexon ], you never used to see a buyer who is buying the car for the first time and is going for an EV. But in Tiago, 1/4 of our sales are people buying their first car as an EV. It's a big change, which we are seeing, a big transformation. 24% of the buyers are women. Typically, in PV industry, this number is about 10%, 11%, which means that it's being seen as a more convenient driving also. And of course, 56% of the buyers are aged less than 40 years, so young customers. So therefore, every launch is helping us expand into more cities in the country as well as attracting new customer segments. This is also a reconfirmation of post Tiago launch, it has allowed us to sharply expand our presence in more cities. So we were organically increasing our presence in the cities until FY '22, 51 in '21 and then 75, and it has jumped to 165 cities. And so is the case for touch points. On the charging infra, initially, we started with focus on, of course, public charging in a small way, and we synchronized our efforts with Tata Power by asking them to only focus on those cities where we are opening the markets so that we don't spread our efforts thin. But we realize that home charging is solving a lot of problem, 95% of our customers based on the telematics data we're charging at home. But it was also an indication that this is very much a city drive and less frequent on the highways. So the work on public charging infra on the highways was important. And therefore, we shifted the focus of the fast chargers only on the highways rather than putting on cities because in cities, customers were absolutely okay with the home charging solution that we were offering. But we again started hitting the ceiling because there were customers who did not have dedicated parking. And therefore, with Tata Power, we came with the idea of providing residential society level common charging. And we have put already 1,000 chargers in about 75 societies in 5 cities. This is our focus first 5 cities. And the one that you are seeing here, by the way, is that a residential society charger and I must mention, I just realized this is actually my society where it has been placed. So it's really working. Well, I charge my car here. Localization with TACO has been a game changer for us. I would say one of the key foundation has come from this because none of the suppliers were ready to work on electric mobility side when we started our journey. And they have really helped in localizing the major aggregates and subsystems and 50% of DVA requirement, which is a requirement for both FAME as well as PLI is being met with the help of them. So this was about EV and product. Front-end reimagination, I would say, is one of the key driver behind the turnaround. And why I say that because there were 3 broad -- 5, 6 major initiatives that we did, and I'll talk about it quickly one-on-one. First, there were 20 cities in the country that we identified where the TIV, which is total industry volume was very high, but our market share was actually less than the India average. So our market share that time was 4.8%. In these top 20 cities, we were 3%, 3.5%. So we took the challenge of these 20 cities and said that this is where we'll bring our growth. I'm happy to say that in FY '23, this number was 15%. And how this happened because we developed a deep understanding of these micro markets and the customer insights and then growth of 360-degree effort in terms of marketing and sales levers to really turn around these markets for us. At times it involved bringing local ambassadors like Kolkata was one micro market. And you can see Prosenjit, some of you would be knowing him, and this really helped in bringing back the personal segment because in Kolkata, we were only known for fleet and government sales. So this really turned around the situation for us. Similarly, in Tamil Nadu, we came with ads which you could connect with their culture and all these initiatives really helped us. On the network side, the dealers were disengaged. Of course, they were testing us because they were not making money. And as you can see in the lower side, only 43% of them were making money. So we took some transformational actions on the policy side, which also included improving significantly their margins and giving them confidence that they will earn money if they invest in resources and enhance their working capital. And I think that turn around the situation for us. In the first year itself, 90% of them became profitable. And today, most of our dealers are profitable, making an ROS of nearly 2%. And the growth would have not been possible if we did not also grow our touch points. So in the last 3 years, we have also grown from 800 to 1,400. On the aftersales side, the service outlets have also increased from 653 to 855. This is not good enough. And this is where I would say that there's an opportunity for us to improve because there is a capacity issue, and we are expediting that through expansion of the service workshops and bays. But we have very rapidly come with some very innovative models here, easy service, which is on the 2-wheelers, we sent our mechanics in the cities to do kind of a quick service if it does not need a major intervention in the vehicle that is done, then we are expanding the number of bays in the current service workshop by moving away the body work to outside the city, increasing the productivity of the bays. So we have done certain actions, we have taken certain actions, which immediately enhances the capacity, but this is where we are working a bit. And also on the capability building side, there has been a lot of work that we have been done for the aftermarket sales personnel and for improvement of the service quality. The other 2 big initiatives, I would say, on the marketing side has been: One, our presence for nearly 5, 6 years in IPL. And each of the products, which have been displayed in the IPL, starting with Nexon, then it was Altroz, then it was Punch and then it was Safari Gold. And this year, for the first time, we displayed the EV, which was Tiago.ev. All these products have a very strong awareness and consideration in the market, and they have sustained their volume over these years. So this has really yielded us a very good benefit. I would say post type, we launched Tiago.ev before the IPL started. The extent of bookings that we were getting before that, and post that, I'm talking about as of yesterday, what we are getting on a consistent basis is 2x more. So it has really helped in driving awareness and consideration. Hyperlocal marketing has been a big initiative through Google My Business. We have created standardized websites for the dealers. If there's a customer in a locality searching for a Tata car, they will immediately get the prompt of a local dealer with the star rating of that particular dealer, so they can choose between the dealers where they want to go. So complete transparency there. And this has also helped us, therefore, convert inquiry into bookings. On the customer experience, we have reimagined the entire thing. We were seeing that there was no end-to-end responsibility of customer experience within Tata Motors or even in the dealerships. So here, we created a separate structure 1 year back, which looks after the end-to-end experience of a customer for the entire journey, and this has -- they are looking at both ends, infra as well as training and monitoring the situation as far as the dealerships are concerned. Within the dealerships, we have come with what we call a CXM position, Customer Experience Manager. So this is a person who directly reports to the DP. So they drive the customer experience and the KPIs on a daily basis. So that has really helped us. All these initiatives on the product side, on the sales and service side has taken our NPS from 28 to 40 last year. There was a time where we used to be negative, which means that there were more detractors of the brand than the promoters. So we are the #2 in terms of NPS today. Of course, as we -- as I said, that as we were creating demand, and that happened very rapidly within the first 6, 7 months. There was an issue on the manufacturing capacity side, we had a capacity of about 20,000. And over a period of time, we kept on increasing the capacity in a very systematic way and phased manner, but also ensuring that it did not disrupt the growth story at any point in time. Generally, you would -- for enhancing capacity, you would take shutdowns for a week or so. But it was very smartly done, not only within the factories, but also at the supplier end. There was more work on the supply side that we had to do; whether it was enhancing the capacity of Nexon or on the supply side for the petrol engines because the mix was very different in FY '20. It was diesel petrol mix was -- there was a lot of diesel in the mix of products that we used to sell. We had only 11,000, 12,000 of capacity for petrol. Today, we have enhanced it to 42,000, 43,000. So there has been a drastic increase in the capacity without making the companies suffer for volumes in any month. So there have been a very well-planned work which has gone behind it. As far as semiconductor shortage is concerned, I think we were the company which managed it well, and we managed it well only because we got corner to a situation where we were the most exposed company to the semiconductors because the allocation principle, which was applied by the semiconductor supplier was on the historical volumes. So we were the worst actually. So we got cornered and therefore, started taking actions much ahead of when the others started. So several actions like immediate work on innovation, which was reducing the number of chips, wherever it was possible, we started work on that. We immediately started our relationship with the chip manufacturers, but that was not very effective to start with because there were clear allocation principles and all. But immediately also, we started working on alternate suppliers who are ready to: One, supply those components with the security of chips. So that also really helped us, but we took some very agile calls on going for open market buys also. So there was all these combination of things that we did, which really helped us tied over this crisis that we faced and did not let our good story go down. On the manufacturing capacity side, we reached about 600,000, which also included, I would say, about 60,000, 70,000 of additional capacity taken from our partner, Stellantis in the joint venture manufacturing facility. But also, this was the state-of-the-art facility of Ford that we acquired recently, which you would have heard about, and that has really taken our capacity to nearly 1 million. It is like putting the cart before the horse, but this also means that now we can boldly go for creating new products and really going bold in terms of demand creation to start working towards this kind of a volume. It is a smart scalable factory, excellent infra. And best thing is it is just adjacent to our current Sanand 1 plant. We have really saved a lot of money, what you would need to build this kind of a capacity with the kind of infrastructure it has, nearly INR 5,000 crores. Quality has been a tremendous focus for us in the past few years. And I'll start with the outcome of this effort, which is most of our cars in the JD Power IQS survey, which was in 2022 were either #1 or #2. We used to be at the bottom of the pile. This has really gone up to #1, #2. And there's an initiative that we call as AQIS, Advanced Quality Improvement System, in which every station in the process is being really question for L1, L2, L3 level of control. L1 is a manual control and L3 is a fail saving or fool-proofing. So most of our processes, we are trying to move to L3, and this is monitored very closely. And over a period of time, a lot of controls have moved to a stage of fail saving, and that is really helping us show the results on the quality side. Same effort on the supplier side, through the 7 BIQ levers, built-in quality levers that we are working on, again, focused on poka yoke. So combination of both these efforts have really helped us really do well in the quality. On cost reduction, achieve, we are not seeing the numbers here. But just to give you a [indiscernible] of APV, which is annual purchase value. And this really helped us in the last 2 to 3 years when the commodity prices skyrocketed. And we could not pass on the entire thing to the market. And therefore, this was the offsetting factor. At the same time, it helped in improving the profitability for us. This is very institutionalized process in the company. There is a team which only focuses their only life is cost management and driving this across the organization. Organization where nearly 1,200 employees are involved doing about 500, 600 Idea workshops, the benchmark cars at we go for a teardown analysis. So VAVE, commercial reduction volume-based negotiations all are involved here. So a very good work we did in the cost reduction side. So this was about what we -- what was behind the turnaround. Coming to the key future trends on the customer technology, regulation and competition side. As far as customers are concerned, I said that the customers' age profile is coming down. less than 35 years of age is 65% of our customers. And they are looking for aspirational features and technology, unlike 10 years back, the key preference used to be mileage or a low maintenance cost and a lower price, that has drastically changed, and it reflects in the kind of variance that we sell it is more feature-rich variants which sell in every model. Growing environmental consciousness. The new set of customers are the millennials. They are very conscious about this. And we are seeing and the proof point is the adoption of electric vehicle, which has happened so fast. And increasing preference for SUVs because of the practicality it offers and is also a global trend and premium vehicles, I think this is also what we are seeing as a change in the customer preference and behavior. On the technology side, there is a greater penetration of new technology features like connected car, ADAS. But also, there is a big architectural shift, which is going to happen in the coming years, which is software-defined vehicles. the cars are going to be like mobile on wheels. And there's a greater architecture definition of the software side that will become important, and therefore, we have to take cognizance of this big trend. On the regulation side, the focus of the regulators are safety and emission. And therefore, there's a support for EV and CNG that we are being -- is what we are seeing. Also, the government is acknowledging the transition towards electric and newer technologies, and they are very cognizant of the fact that if we don't capture the value in India and create employment, it would be again a missed opportunity. So all the incentives and all are driven towards localization. This comes with the condition of localization. So that is another trend that we are seeing. Competition, always it has been a hypercompetitive market. The frequency of launches have increased and India growth story is being believed by most of these players now. So they are also -- some of them were very passive earlier. They are also becoming aggressive as far as India -- Indian market is concerned. So broadly, the implication is that we will continuously see the segment shift towards SUVs, CNG and EVs are going to grow, focus on safety, and even preference of customers and consideration while purchasing at our car towards safety is going to grow. The product refresh cannot be a 3-year cycle. It has to be more frequent. And that's why the idea of new forever intervention came. Localization for all the new technology area will be key and advanced technology as a differentiator is going to become even more important. So based on this trend, what are our strategic pillars? One, we will develop aspirational product portfolio. We will also ensure that for every product that we create, we have a multi powertrain strategy because that is where we see a bigger growth opportunity and capitalize on those segmental shifts, also some which is being driven by the regulation. So I think this has been the idea behind and set of considerations while thinking of expansion of our portfolio. In the EV market, we have led the charge, and we'll proactively keep working, and I'll talk about it how to maintain our market leadership. We will accelerate localization, not only to secure the government incentives, but also to drive the cost efficiencies. As far as advanced technology is concerned, it is very foundational in the coming years. And therefore, there is going to be a lot of work there to deliver premium customer experience. And we are very cognizant of the fact that financial excellence is going to be extremely important to deliver superior returns going forward. And of course, the front end imagination, a reimagination is something which will come in its later versions, 2.0 is what is the current state, but we'll keep really improving our competitiveness efficiencies, effectiveness in the front end going forward. Starting with the product now. There are 3 things that we will do. One, we are going to expand our portfolio with new nameplates. Some of them you have already seen in the Auto Expo, which was Curvv, Sierra, Avinya. Avinya is going to be the first pure EV. And there's one additional product, which we'll disclose at the right time. But just to reconfirm that these are going to be products in the spaces, which are going to grow fast in the coming years and going to grow big in size. Again, reconfirming this. You see Curvv and Sierra in the 4.3-meter segment, which is going to grow the fastest in the coming years. And we are not coming with me-too products. These are very 2 different unique products, for example, in 4.3 meters. Curvv is the first coupe in the mainstream segment, which we are introducing at a 4.3 meter. Sierra, one, it has an nostalgic value at a very strong brand. A lot of customers connect with this brand. At the same time, it's a very modern car at 4.3. So one is a traditional SUV. The other one is a coupe, which is more modern, more urban. So therefore, the idea would not be to enter the segment with me-too products but have the portfolio differentiated as has been the case in the rest of the products in our portfolio. Mid-cycle enhancements I talked about that the cycles were longer. We had to do more frequent, not only mid-cycle enhancement, but also the new for our interventions that we keep doing within the year. So a lot of these mid-cycle enhancements kick from this year itself for the portfolio of products that we have. And special additions and feature upgrades as 6 airbags are going to come. We will be proactively launching our cars before even the regulation might come. ADAS and connectivity, so on the active safety feature, engine upgrades, safety enhancements and of course, as said, continuously renewing the product through our forever interventions. Multi powertrain strategy is a big lever for expanding volumes and increasing market share. We are the only manufacturers which would be in petrol, diesel, CNG and electric. And as we are launching the variance of each of these powertrains, it is just expanding the volumes of those products. And you will see in the trend. And therefore, wherever diesel will remain relevant, we will keep our products positioned in that segment. Of course, diesel will come under pressure going forward with every regulation change. But CNG will be replacing in those segments, and electric will -- or petrol would come in, in certain segments, which I would say at the end of the decade when diesel would exit even in those segments. So it's a well-thought-through strategy of multi powertrain for -- till the end of this decade. We'll also continue to expand the CNG portfolio as I said, with innovative products. And recently, we came with this big innovation. CNG has always been a compromised car. If you remember, CNG started in the market with these aftermarket fitments. And when OEMs introduce them as factory fitted, nobody thought that we need to change the design and they just went with the same design of what aftermarket fitment companies were giving. It is only -- the idea actually came when we were thinking of the Gen 2 products for our EVs, where we had to change the entire floor, right, for accommodating more batteries. So you said then let us see this holistically for all the powertrains. And this is -- that time the idea started why can't we have small, small cylinder on the floor, right? But eventually, we could not convert that idea into that, but we then came with this twin cylinder, which completely releases the boot space. And this is a big disruption in the market. We are getting very good bookings of this in the last few days since the time the reviews have started coming. So maybe I'll just show a video may I have the video on this, please? [Presentation]

So this is the first, I would say, no compromise CNG car in the market. And the idea is that the entire CNG portfolio that we'll create will have the same technology. Coming to EVs now. Our strategy has been evolutionary from Gen 1, Gen 2 to Gen 3. It's a very unique approach, I would say. It also is to do with the time when we entered. And when we entered, the battery prices were high. There were no customers. The technology was not understood by the customers. market was not prepared, ecosystem was not there. And therefore, the Gen 1, which was quick conversion program helped us in delivering these products at a very low CapEx in a very fast period of time. And these are no nameplates in the market. So customers also got a lot of comfort. And it also helped them understand this technology better. So we had to give confidence to the early adopter. It served its purpose. And the litmus test is that Gen 1 products, which last product was the Tiago.ev. Already 1 lakh products are now -- nearly 1 lakh products are there out there in the market, giving sufficient confidence to the full ecosystem players as well as the customers. Now as the battery prices have come down from where we started in Gen 1, it gives us opportunity to give more range and battery. And this is where there's enough volume base now to invest more. And therefore, we are bringing the architecture -- architectural changes on the floor, as I said, in Gen 2, so that you can give more batteries. And these Gen 2 products will be starting from this financial year. And there would be about 3, 4 products that we'll launch in Gen 2. The work for Gen 3 has also started. The Avinya, which we had displayed in the Auto Expo also as well as last year. This will be -- there will be a series of products coming on this platform. The best benefit of a Gen 3 or a pure EV is to give higher range, which is 500, 600 kilometers but you can only do when the battery prices would have come to a certain level. Remember that if a Gen 1 product requires x, our Gen 3 might require 10x investment, right? So it has to make sense for the business as well as for the customers to the timing is very important in this journey. I think we have timed the generation of products rightly and possibly, it is a unique advantage to us because we started at a certain stage. So this is what we are pursuing and there are 10 products which are going to be there in the next 4 years, already 4 are launched. There are further 6 or 7 products to come in Gen 2 and Gen 3. We started our journey with actually fleet segment because this is where the government wanted other place to focus. This is where the FAME incentives were. But we realized if this market is only 5% to 6% of the entire PV industry, how much impact we are going to create. And that's the reason why we came with the idea of launching Nexon and entering the personal segment because there is where you can really bring the difference and drive and accelerate the penetration of electric vehicles. So with the future products, which you are seeing here on the left side, Harrier, Curvv, Sierra, Avinya, it's going to take the aspiration of EVs to the next level. These will be long aspirational vehicles, tech reach products and also on the retail experience, we are going to differentiate for these set of products. So it will be a combination of first continuing to be dominant, providing a strong value proposition to fleet segment. Right now, we are the ones which are -- we are the only ones who are providing to the fleet, but very aspirational products going to come in the future. The current customer persona -- so this is a customer cut in a way, if I say the current set of products and 2 more products which are going to come. On the left side, this is for the early adopters and early majority. But we have already seen fast this has moved to the late majority also. So these are basically tech savvy adopters, well traveled, globally experienced, people who have experienced electric vehicles while they were traveling in Europe or China. They're very environmentally conscious. And also, these are very value-conscious buyers. So the set of Gen 1, Gen 2 products have been serving them well. We are upping the game with these 4 products on the right side which will be for more sophisticated customers who are more individualistic socially expressive, very -- who are adventurers, who are valuing experience more than just the features. So I think the set of next 4 products that you will see will also be attacking the new customer personas. So therefore, the portfolio, each product is playing a role for a different category of a customer. So that is how the role of each of our products have been kind of imagined. Also, the extent of work that we had to do to overcome the barriers misconceptions around EVs was more intense. And it was very different kind of initiatives. If you remember, when we launched Nexon EV, we did a Milind Soman Leh to Manali kind of a drive. And that was to give confidence that EVs are not sluggish and only good for city and all. So that was in that point in time. A lot has changed in these 4 years. And we have to reinforce the message in the customers. There are many reasons not to go for EVs. So we came with this campaign 100 reasons to go for EV, and the results are in the bookings that we are getting. So maybe I'll just have a quick video on this, please? [Presentation]

Yes. And many, many other ads of similar small, small ads conveying one message, how barriers are being removed. I already talked about the community charges. This is one big lever that we are going to use. And we'll expand in more cities, more societies, societies are also becoming aware because many customers are wanting to buy EVs and they were not allowing them to install a charger. But with this kind of an approach, I can give example of my society, there are only 6 charges as of now, 7.2 but it is serving nearly 35 electric vehicles. So this is going to be one of the major focus for us in the coming years and public charging on the highways, not in the cities. So I think this is how we have distributed the focus in the coming years. Localization is very important for, as I said, cost efficiency, but also to be eligible and avail all the incentives that government is providing in 2022, we were at 70% localization. We will move to 85% at Tier 1 level. We are working with 20 strategic suppliers on the HV component and, of course, 600 general suppliers that, in any case, we were working with and with a target of 15% reduction. So all the marquee suppliers you can see on the right, whom we are working with. So localization is a big focus for EVs. Leveraging on advanced technologies, HMI, ADAS, connected car, 360 degrees, surround, all these features we are working on and it is going to come in each of our products and the new forever interventions also. But there's also a major work in terms of redefining the electrical, electronic architecture. There's a strong synergy projects that we are exploring with JLR in this new technology space. We are working with software companies in the group for the software-defined vehicles and a lot of work on building the new capabilities that we need in the new technology world. So a lot of work on this. Given complete digital experience to the customers is one big initiative, which we call as the CX Transformation Initiative, again, working with various Tata group companies here. And this will be -- this will have an app as you buy a vehicle. After that, the journey, it will give you trip analytics, driving behavior, health monitoring, for electric vehicles, the charging super app will be there so that you can see not only Tata power charges, but all the charges which are there -- out there, Remote commands, switch on the AC when you're about to enter your car, 5 minutes before that, safety and security, geofencing and all those kind of features and also social tribes to be mixing up with the community. So this is being it is about to be launched in maybe a quarter or so. And also, we have reimagined the entire journey, starting from when a customer starts considering a product to the time when the customer is thinking of selling off the product. This entire journey, we have imagined on the digital platform, which I said we'll be launching in the coming quarters. I would like to just show a quick clip on that. If we can have that clip, please? [Presentation]

As I said that as far as margin is concerned, we have a distance to cover, and we have started in 4 buckets set of initiatives. One is on the mix side, model mix, trim mix, non-vehicle business, accessory and merchandise, spares. All these are very profitable part of the mix. I think we are trying to enhance the contribution coming from here. On the realization side, we were a discounted brand. We have overcome a lot of this discount and there's a focus now on keeping the price very competitive for the products in different segments but also very tight control on VME as the NPS is increasing, this gives us an opportunity. On the cost side, as I said, the institutionalized program involving 1,200 employees. This is running really well. Levers or commercial reduction, VAVE and commodity. And on the leverage side, as we have grown 4x, it has really allowed us to get that benefit of operating leverage. And as you have seen the capacity that we have built and our ambition to grow to those levels, there's more leverage to come in the coming years. So in the medium term, 3% increase is what we are trying to target as far as the contribution coming from these initiatives. The final slide on aspirations, winning sustainably in TMPV drive the market share gain through all the actions and strategies that I talked about; expand the product portfolio, new nameplates, multi-powertrain, new tech, double-digit EBITDA margin and FCF positive. So this should be a self-sustainable business. TPEM is in the phase of building the foundation for itself in terms of expanding the portfolio. So we had to win proactively maintain our leadership position. So here, the focus would be to create the portfolio first. Drive EV adoption and penetration through network expansion cities, expansion, myth busting, and focus on ecosystem development with the Tata companies. And right now, we would be positive underlying unit economics without the product development expenses. With the product development expenses in the medium term, we should be starting to move to positive EBITDA delivery. So that's broadly what we are aspiring for. That was my last slide. Thank you so much. 3 seconds late. So I think I'll be spared for that.

Thank you, Shailesh. Ladies and gentlemen, due to a personal emergency, Shailesh will be unable to stay with us through the day. But we planned a 15-minute Q&A session with him right now. So whatever questions on PV and EV are -- you would have, you may ask him now. For the rest of the session, the Q&A is planned in the second half. And members of the audience who have a question, kindly raise your hand and we'll have the mic come to you.

Yes. Can we have the mic there, please? Please do introduce yourself.

This is Kumar Rakesh from BNP Paribas. Definitely impressive work over the last 3 years on the volume expansion and profitability and seems to be on track of a very successful turnaround of the passenger vehicle business. But in my view, I think the success on the automotive industry should be just on a little longer period of time over 7, 8 years when the full ownership of cycle is completed. And the first part of that seems to be done when we have the acceptance of the product by customers, which used to be seen as a fleet brand is now seen as a premium retail brand as well now. And this part of the journey was relatively easier to judge for us from outside looking at the market share, profitability, these metrics, which we could track. Now the acceptance of the brand and the success, the quality, the ownership experience, these are relatively more difficult for us to just from outside on a more regular basis. So can you give us some insight on maybe warranty expenses, how they are trending, the service center, turnaround times or the experience of customers over there are the product quality brings along with that some challenges as well which should get addressed. But where do we stand today? And how do you plan to progress to sustain this expansion over the future period as well?

Thanks. I think a very good question. And I completely agree that 3 years is just the initial part of understanding of the full turnaround. We have to really see how we sustain and grow in the next 4 years, which is a 7-year cycle, as you said. And I hope I was able to convey how we are going to do that in the next 4 years, that's one. And we are confident that we -- and with that confidence, we also invested in the capacity. I think all the lead indicators, if you take the NPS which is in a way a lead indicator of what your market share can be. There are consumer surveys and which have ranked us at the top of the brand hierarchy in terms of what customers' perceptions are about different brands. So I think all the lead indicators are right in terms of the strength that the brand is gaining. So that gives the confidence. In terms of the journey so far from where we were to where we are today on the customer experience and product quality part, I think I can give you confidence that, one, warranty expense is lesser than what the industry operates at. I can confirm that. I don't have the specific number, but it is quite below where the industry operates at 2%, 2.5% or so. So we are much lower than that. On the metrics, whether we talk about CPTV, TAT, et cetera, we are at very comfortable levels. There was a problem if you ask -- you would have asked me this question 1.5 years back. But those were on the sales side, this used to be problems related to expected date of delivery or lack of a IT system to give confidence to a customer. I think we have come with those kind of IT systems to ensure that the sales experience is well. There's a work that we are doing, and we do a lot of mystery audits, which then gets translated into action plan for the dealers, where there have been concerns in certain set of dealerships. So that is where we are trying to work on infra part. There is work being done in terms of attrition of sales exactly because you train and the people move out within 5, 6 months, that has been a concern. So training was only one aspect, but also controlling the attrition so that your training is really impactful. That work has really been done well in the last 2 years. So these initiatives have led to a CPTV, what we call as complains per thousand vehicles in both sales and a lot on the service side because a lot on service side, nearly 50% was because of product quality. That part has come down. So the others have increased from a percentage perspective, but general CPTV has considerably come down. There are perception issues in the market. which we have to really keep fighting. And that happens over a period of time. But also the big indicator on the quality is a third-party survey GDP which I have shown you, IQS, we used to be in all these cars at the bottom of the pie. So here, we have come to Number 1. Number 2 which is again a lead indicator of what the perception of Tata cars are going to be in the coming years because IQS is the 6-month time period. So in the last 6 months, the customers who bought what problems they face which shows the recency of the quality of our products. So from all the lead indicators that I'm seeing, I feel confident that on the customer experience side and with the CXM concept within the dealership and the end-to-end customer experience team that we have created in Tata Motors, I think we are safe in that journey. We have to continuously review continuously improve in that. And that is what gives confidence.

Yes. I think we have a question on the same [ topic ] so we can do that one as well.

I'm a Kapil from Nomura. I wanted to understand that slowly, we will have global competition also coming in electric vehicles. In terms of competencies that we have built and the number of vehicles on the road, probably we global companies will have some global experience, but not in India. So what do you think will be the key competitive strengths or innovations that we have done, which will set us apart in that journey?

The very thing is that we have custom-made the product. That is, I think, the biggest one because there are many global products, very successful products, which have also got launched in India, by the way, but without much of success. One is this market is difficult from a consumer choice and in terms of the balance of affordability and the features, what is expected by a customer. It's a very tough market that way. And how you strike the right balance specifically for this market is the trick, right? And that is the reason why some of the competitive vehicles which are very successful in Europe or somewhere have not succeeded and a car like Nexon or Tiago is doing so well. So the price points, the average median price of the cars which are getting sold in India is INR 10 lakh, which would be like $12,000, $13,000. The price of vehicles globally start at $25,000. So somebody has to do a lot of work to first come down to a level where you're also giving feature-rich car, but at the same time, at a price point, which is in the zone of where the volume is, the sweet spot. So hitting the sweet spot is very important, and that is what we have done. That is more from a value proposition perspective. From an experience -- from a market attributes, what you need here is your vehicles operating in extreme climatic conditions. In some places, you have minus 2 in some places, you have 50 degrees also, right? And you have to, therefore, tailor-make your vehicles according to that. And a lot of refinement of that comes through your vehicles running on the road and completing those many miles before you are able to understand all the potential use cases for the market. I think this is the biggest strength that we have, nearly 1 billion kilometers covered by all our cars is a big knowledge that we have. A lot of product improvement has come. A lot of reliability improvement has come because of that and a very deep understanding through analytics that we have developed, and that comes as a unique advantage going forward in all our cars. So that is the other aspect. I think also there's a growing confidence in the brands which have sustained themselves within India, right? There have been exits and there are certain brands like us despite going through difficult times have sustained us so that confidence also customers [ look ]. It's a combination of all these things. And the last I would say the strength that we have, what gives me confidence of maintaining leadership. At the end of the day, your market share is defined by how wide is your portfolio, how many vehicles you have serving different customer segments. I think we have taken quite a significant lead there. And we are moving very fast in terms of launching our products you would have seen. That's also a unique advantage. And if there are these transition delays from a Gen 1 to Gen 3, we have the best agility to deal with those kind of situations. So if battery prices don't come down, for example. A Gen 2 product might have a longer life, right? And Gen 3 product might get delayed. Somebody coming late in the game is going to come with -- they have no option, they can't Gen 1, Gen 2, right? So those also give us an advantage in terms of resilience of the strategy so I think it's a combination of all these factors. And of course, the ecosystem benefit that we have with the Tata companies that also. Localization does not happen overnight, there's an effort needed there.

In submission, is there any [Audio Gap] and anything.

You have seen the capacities that we have created, you can backward work the market share aspirations. We have, frankly, volume growth as the aspirations. The aspiration is that every product that we have made as a strategic choice play in are in top 3. I think we just focus on this. And then things are -- the market share has to improve. I think that is the game we have been playing for the last 3 years, just to ensure that we are in top 3 in whichever segments we have chosen. If we are not, let us improve the competitiveness of the product and bring it there. So the choices that we make, the idea would be to make it a success in the market. And then market share gains should happen is the way we see.

This is Chandramouli Muthiah from Goldman Sachs. So my first question is just around details around your EV R&D team. So I think a couple of earnings quarters back, you had sort of mentioned some details around upscaling our R&D team, what is the size of the R&D team. So if you could give us some updates around that, that will be helpful.

I'm sure Ravi, you should cover it in the later part if you are there, but let me just give a quick answer to that from an approach perspective, see today, it's a company where engineers are mechanical engineers mostly. But then engineers are very adaptable also. So we feel that you don't have talent for, for example, electric vehicle, right, so in that area, we are trying to first bank a lot on upskilling our current engineers. And there is different phases in which we are training them, the first phase, second phase, which moves from basic to very advanced kind of a course. And these people are then put on live projects so that they go through the experience curve. A lot of people have worked also in the 4 products that we have delivered. And therefore, there is already a cycle of experience they have gone with. So they become kind of the supervisors for the rest of the new talent, which is getting trained and coming in. So this is how you're expanding the capability, say, for example, on electric vehicle and so will be the case for some of the other advanced technologies. You also need to work with a network of partners so that we are able to gain that knowledge, absorb that knowledge within the company. In certain areas where we cannot have the luxury of taking that much time to build the capabilities. We are also working with companies within the Tata group, JLR is a big one. As I said, we are working with them in the electric vehicle space on the modern electrical electronic architecture. We are exploring these synergies. We are working with the software companies within the group for SDV. So there's a lot that we have to do in terms of capability building, but at the same time, also networking and collaborating. It's going to be a combination of all these things. And then there will be an end state where the whole company would have transitioned to a set of resources, which are in the new capability domains. So it will happen in phases is what I can say.

Got it. And just as a quick follow-up. In terms of free cash flow, you had a slide in there, on target to turn positive free cash flow on the ICE PV business. So I just want to understand where you stand right now on the ICE EV business on free cash flow? And is there any time frame to get positive free cash for there?

We have been free cash flow in the last 2 years. So -- and this is by quite a quantum, I would say. I don't know whether we have declared the FCF part. We have not declared so I can't declare that number, but it's a significant free cash flow being generated by the PV business, very close to I would say, the good companies in the stack of 14 companies that we have here. So PV business is already doing very well as far as free cash flow is concerned. EV, as you know, is going through a phase of big investment and it will be for a phase of 3, 4 years where this investment will be high, the FCF will be negative in the investment phase. But the focus, as I said in my presentation that underlying profitability of the business will be kept positive. That is the effort.

I think in the interest of time, probably that was the last question that we'll take.

Moving on to the next session. The Tata Motors Commercial Vehicle business continues to create new paradigms as is expected from a true market leader spearheading digital adoption, introducing cleaner, greener powertrains, transforming every regulatory change as an opportunity to create more value for customers and building a future-ready portfolio to service the evolving needs of smart cities and smart logistics are examples of that. May I now invite Mr. Girish Wagh, Executive Director at Tata Motors Limited, to tell us about how we plan to continue winning decisively in commercial vehicle business.

Good morning, everyone, and it's indeed a pleasure to be here with you in person. So it's my pleasure to take you through the year gone by for the Commercial Vehicle business. which in a lot of terms was a year of many firsts. We also did a significant strategic shift in the positioning in the market. And while it is seen as a discounting reduction, I'm also going to share today what went behind that. And how are we going ahead on the journey. What are going to be the levers for driving the market leadership going ahead [Audio Gap] So before I start speaking, let's have a video on the year of many firsts. [Presentation]

Right. So I think it indeed was a year of many firsts. Let me speak about the industry context now. So what you see here, the dark shaded area is how the freight is growing in the country in billion tonne kilometers, the blue line is the total industry volume. And the bar graph behind that is the growth rate with respect to the previous year. So we can see after the COVID impacted years when the billion tonne kilometers actually went down, the freight in the country went down in FY '20 and FY '21, you've seen a good growth in both FY '22 and FY '23. And as a result, if you look at the last 10 years, the freight has actually grown at a CAGR of 5%. So you've been seeing a good correlation with the GDP growth of the country. And we know the kind of projection we have for the GDP growth in the coming year, and therefore, we see similar BTKM growth happening in the freight in FY '24 also. Talking about the industry numbers in FY '19, the industry had crossed INR 1 million in sales. And if you see in FY '23, it was shade below INR 1 million. But if you look at the tonnage sales, which happened in FY '19 and FY '23, then in tonnage sold in FY '23 was already 6% ahead of FY '19. So you've seen a good shift happening to higher tonnage trucks. And therefore, in terms of tonnage sold, we -- the industry has done better than FY '19. If you look at FY '24, this is the dashboard of the most important influencing parameters at macro and micro level. At the top, you see all the segments within the CV industry, so the light commercial vehicle and small commercial vehicle that is below 12 ton GVW, the medium and heavy commercial vehicle cargo, the tipper, the tractors and finally, the buses. The GDP, IIP as well as PFCE is going to go up this year, which will augur well for the industry. And if you look at the individual sectors, be it agriculture, consumer durables, e-retail, mining and so on and so forth. I think each one of them are going to grow. See the yellow arrow here actually means that the growth will be between 0% to 5%, but still it will grow. And the green arrow of course, means that it's going to grow beyond 5%. The only area that we have to keep a watch on is the fuel prices. And at the beginning of the year, we were about the geopolitical situation and what kind of impact it will have on the fuel prices. But actually, that it has turned out to be benign. And in fact, fuel prices have been stable. As a result of this, the industry will certainly grow this year. It appears that in terms of numbers, it will grow in single digit. In terms of tonnage, also, it will grow in single digit, but the growth will be higher than in absolute numbers. In terms of quarters, I think the first quarter may see some amount of degrowth over the Q1 of last financial year because of the pre-buy effect that we had in Q4 of last financial year. But Q2, Q3, Q4 should see a very good growth. And within the segments, I think the passenger segment should grow the highest because it still is on a lower base. The medium and heavies will be having next higher growth again, on the base being lower. The small vehicles will grow marginally, and it appears that intermediate and light commercial vehicles probably may remain flat during this year because last year was a very good year for ILCVs. And one of the factors there was very good pricing of CNG. So in the first half or first 3 quarters, we saw a very good pull for the CNG vehicles in ILCV. In fact, in our portfolio, it had gone almost above 40%. And when the CNG prices started going up, it actually created a lot of uncertainty in the minds of the customers about not just the absolute pricing, but more so the differential with diesel. So even at high prices of CNG, it made sense to buy CNG from total cost of operations point of view, but they were concerned about the differential with diesel. With the implementation of this Kirit Parikh committee recommendations. It is quite clear that the price differential between diesel and CNG or petrol and CNG will be maintained. And as a result, as this is becoming more public, more and more customers are now coming up again to buy CNG. So we expect the CNG penetration to go up. Another important factor to be noted is [Audio Gap] spend, the commercial vehicle industry does growth. And with all these factors in mind, therefore, we expect the commercial vehicle industry to grow in FY '24. Now what happened in FY '23. Clearly it is a tale of 2 halves. But before I dive into FY '23, I think what is important is -- and this is an example of medium and heavy commercial vehicles that I've taken here. 5 years before that, we were consistently growing our market share. Year-over-year, we had grown our market share. But there was a concern on the margins, right? And the margins were impacted, not just by the commodity inflation, which happened towards the end of the 5 years, but also with the kind of discounting, which was going in the market. Come to the first half of FY '23. I think the unprecedented commodity inflation continued because the capacity utilization was lower, the increased competition continued, and we had higher discounts, increased discounts. And what you see in the graph here, the white line is the retail share or the Vahan registration share as we calculate. The red one is discount an absolute number. The green one is the margin. So while the market share was remaining almost flat, the discounts were kind of inching up. And that's where we got into hurdle. And we said that we need to take a strategic shift towards growth with profitability. So we need to secure profitability and then grow is the strategic shift we took. And in the second half, we saw that as soon as we took this change in our approach, there was a drop in the Vahan share in October in Q3. But you can see the rate at which we started bringing down the discounts. And believe me, this was major change in behavior that we had to drive in the entire industry and all the ecosystem stakeholders. So it was not just the customers. It was the financials, it was the dealers, it was the dealer sales team, our sales team, everyone was accustomed to a particular way of working for 15 years. I mean, this realization as a percentage of the list price was going down, right? And this behavior was there for almost 15 years, and we decided to change this behavior. Since there was a lot of resistance, we had a lot of engagement with all the stakeholders. For example, the financials when they fund the truck, the credit team does their own assumption as to what is going to be the actual transaction price and then they decide the loan-to-value ratio. But they're always concerned is what is the actual price. So we brought a lot of transparency in the actual price and with which we, this time, engage not only with the sales team of financials, but actually the credit team of financials to push our agenda. Consistent engagement with all the stakeholders actually helped us to drive this agenda. And first, we saw in the medium and heavy commercial vehicle segment that the Vahan share started coming back, right? And then the same thing followed in the intermediate and light commercial vehicle segment. So doing so, we also moved from a wholesale market share, which is a push offtake to the dealers to retail share. So there is a complete pool which is there in the system now. And also, therefore, from a supply chain pool pushed to a retail pool. So this was a complete paradigm change which will draw in the industry [Audio Gap] there now. And actually, we are very well poised as we go ahead. Now this is what we saw in the market. What did we do in the background? So actually, we looked at every subsegment. And to arrive at a subsegment, we look at a [ traid-based ] model, a [ triad ], which is defined by the geography, the tonnage point and the application. So for example, Rajasthan, 55-tonne cement will be one subsegment. So we subsegmented the entire market into multiple number of such subsegments. We assessed our portfolio strength. At each of this subsegment both from market share and financial point of view, but also the way the customer is going to see that. So there was a significant focus on doing a lot of back-to-back trials to understand what is the competitiveness of the product in that particular application and basis that we created what we call as a product charter. So we had a set of green products which had a significant TCO or total cost of ownership benefit over the competition. So it was a very powerful value proposition for the customer. And that's where we started pulling back the discounts first. And by the way, from the month of September last year, we've not increased the ex-showroom price at all. It is just the discount reduction that we've been doing, which is why the realization has also gone up. So on this green VCs, as we call green products, we started pulling back the discount immediately. We also had a set of yellow products in certain applications, where our TCO was better than the competition, but it was in the range where it could be a measurement error also. And it's very difficult to convince the customer. So we focused on these VCs to improve the TCO competitiveness. And third set of VCs was red VCs, where we had a TCO impurity or we also had a contribution challenge. And in these VCs, then we started working on improving the TCO for the customer first and also coming up with a lot of actions to pull back the cost, reduce the cost and improve the contribution. In addition to this, we had an overlay of -- if there was any range issue that the customer had in a particular application on a particular node, even if the TCO was positive, the product was green, we actually made it red to ensure that we are able to address that range issue within 90 days. So the whole organization actually got aligned to start converting the yellow and red VCs, we see red products into green and resolving all the range issues within 90 days. So the whole organization, therefore, got aligned to this single-minded purpose of making the portfolio more competitive. So you can imagine, it was not so much about just discount reduction, which is seen as an outcome, but actually, it was about improving the value proposition to the customers. And here, we were able to, therefore, use our varianting right? We are aware of varianting in cars that within a car, you will have a number of variants. We introduced varianting in commercial vehicles also. So if there is an initial price-sensitive customer, we created a CX variant for them for performance-focused customer, we created a VX, which will have, for example, safety features, radars, et cetera. And then there is a balance perspective value-focused customers who don't want to pay that much but also want something more than CX. So for them, we created the LX variants. So this is the change that we did in the product portfolio and how are we going to look at the portfolio competitiveness. And when I come to the BSVI Phase 2, I'll talk about how we have done a lot of investments in the product portfolio and technology with a futuristic view. So the outcome of this as was mentioned on the earlier slide, it was a clear tale of 2 halves. So in Q3 and Q4, we saw a significant improvement in profitability. While it led to a drop in the Vahan share in Q3, in Q4, we were able to pull it back to a great extent. We had a revenue highest ever revenue in Q4 of last year and also highest ever revenue in FY '23. We clocked the double-digit EBITDA in Q4. And our EBIT margin was at the highest level in Q4 after almost 21 quarters. In addition to this, we also delivered very strong and robust free cash flow during the year. So that was the financial delivery during the second of the year. Now how will we take this forward? So we have done this strategic shift, how will we retain on this and then move here -- move from here and grow profitably. So there are 5 levers: go-to-market excellence, which is the fifth version now we are deploying, and I'm going to speak about each one of these. We are driving brand repositioning through multiple initiatives, enhancing the customer experience, a lot of investments happening with future bets on products and technology and building a competitive cost structure through varianting. So on go-to-market excellence, which is our way we are going to approach the customer and meet the customer requirements, engage with the customer. And this is something that we introduced 4 years back now with the continuous evaluation and improvement, we are in the fifth version of that. And the fifth version is almost entirely digital. So all our dealer sales executives now are equipped with mobile phones, of course, but also iPads to do the selling. They carry the product configurators with them on their iPads. I spoke about the triad-based pricing engine, which has become a strong lever for us to drive profitability with a lot of analytics back up. And there is a separate pricing sell which has been created in the organization with the job of just analyzing customer value and pricing with respect to competition in each and every trial across the country at every tonnage node. And they give live insights and inputs to anyone who's going to meet the customer. We are building sales force of the future through digital interventions as well as gamified learnings. So for example, beat plan is what I as a dealer sell executive has to go and meet customers. Now whenever I'm going to meet a customer, with the use of the Fleet Edge data, I know what is the utilization of this customer? How is the business of this customer? And what is it that I need to suggest. In fact, using the Fleet Edge data, I'm able to find out who are the customers with higher fleet utilization and therefore, are the prospective customers. And in fact, we are, therefore, able to go and convert those deals before they come out and start talking about I want to buy a vehicle. We are building a lot of capability through gamification amongst the dealer sales executives. This is just to ensure that those who stay with us for more than a year are really the top-notch ones in the industry. We are taking key account management to the next level now. We are increasing -- we are redefining the key accounts basis the number of vehicles they own. And within the organization, the structure has been changed to ensure that we are able to manage the expectations of these key accounts much better. And I think this will have a very strong digital backbone as well as review governance to ensure that we keep on cranking up this cycle. On the brand, we are seeing as a very trusted and respectable almost revered brand with accessible and wide portfolio. But I think basis are study that we did with the customers, there was a need to change with the changing times, and we are now embracing a brand repositioning exercise. We have decided that we are going to position ourselves as more dynamic and progressive leader than from being more of a sage and revered one. And this whole thing will be reinforced through differentiated content, enhance brand associations increased emphasis on influencer advocacy that you see here and a very strong digital marketing and sales management. That's what you see here. On this influencer advocacy, we know in every field, they seem to be having a lot of influence over the buyers and especially so in the commercial vehicles and especially so amongst the retail customers and the customers of smaller vehicles. So when we wanted to promote the BSVI Phase 2 vehicles, we actually engaged with more than 250 influencers across languages, we got them to our development centers. We gave them a drive experience of our vehicles the way we do for cars. And that led to a very positive average even before the BSVI Phase 2 vehicles were made available, we had more than 50 million views. Coming to digital marketing and sales. I think digital lead generation and sales has now become a cornerstone of our business. And you can see here month-over-month, we have been generating more than 300,000 leads and almost 17% of our sales are now happening only through digital walk-ins, right. And we believe that this has a tremendous potential going ahead, and we'll continue to ramp up our dealer -- digital presence. The dealer discovery has also been augmented. And what Shailesh showed as an online sales platform for PV, the same thing has been there in CV also, but a different experience, of course, because the customers look for more attributes here, and that's what we are delivering them in the online sales platform. As a result of this, we have seen a good uptick in all the customer-facing metrics whether it is the top-of-the-mind awareness [Audio Gap] We have had highest-ever NPS at 71, which is at a very high level. I mean we always thought about 65 itself is at a very high level, we need to sustain there. But with these activities, we have been able to grow it further to 71. The brand power has improved by 120 bps to 45.7. Our customer SAT has also improved with all the initiatives that we had in place. And with our focus on dealer profitability, we've been able to retain or sustain the dealer satisfaction also at a pretty high level. In addition to this, we are enhancing the customer experience, which is the third pillar -- third lever for us. So we are going on ramping up our Sampoorna Seva delivery with a lot of digital support now. So increasing network physically and digital backbone, so it is becoming a strong [ physical ] network that we have now to deliver better service to the customers. We have been continuously increasing and strengthening our service standards to ensure that the customers get more and more benefit, whether it is for breakdown or service turnaround time. We have been continuously improving our service and spares penetration and which I'll talk about later on. In terms of value-added services, uptime assurance, fuel efficiency management program. Many of these are first in the world of course and the fleet management solution, and I'm pleased to tell you that in these, we have more than 6,000, 7,000 vehicles as a program that we have been running. And the customers are really enjoying the fruits of that, and we see a lot of repeat purchase for these value-added services. On the network, we have created a new low capital kind of a format for small vehicles, which can get into quick breakeven at lower throughput. So we have more than 130 dealers now here, and they are already contributing to more than 20% of our small vehicle sales. In addition to this, we have a lot of now digitally-enabled feet-on-street. So the Tata Gramin Mitras or the Guru Mechanics are our extended arms. All of them are digitally-enabled and connected to our ecosystem. We continue with the channel profitability initiatives. I'm very happy to tell you that the service absorption ratio, which means to what percent the service income or the workshop income is covering the service fixed expenses, so that is more than 140%. And the service income to what extent it is combining entire fixed cost of the dealership has now crossed 70%. It means the 70% of the dealers are able to actually cover up their fixed cost only with the income that they're having from service. This has happened because of increase in the service penetration, increasing the number of job cards that we have done during the year. Coming to BSVI Phase 2 basis the learning that we had in BSVI Phase 1 as also the strategic shift that we did during the last year. We said that the BSVI Phase 2 products will not be about mere compliance to the emission regulation. And we said we are going to take this as an opportunity to increase the value to the customers. We reimagined the entire portfolio believe me, each and every engine each and every engine in the portfolio was either changed or tweaked to deliver better power and talk, which will finally then lead to better total cost of ownership. So the entire portfolio has changed. In addition to this, we added a lot of benefits in comfort and convenience as also safety and connectivity features. We have also implemented modularity [Audio Gap] can have the traditional diesel engine. We can have the drop in alternate fuels, and we can also have the electric vehicles going ahead. In terms of introduction, we've had very impactful launches and we saw the kind of launches that we did and the kind of consistent communication that we had. And pricing strategy, as I said, we have not increased the ex-showroom price, but we've just reduced the discounts again because we want to take the realization above 90%. And this is what we did during the introduction of BSVI. In terms of selling, it is about value-based selling and not about product and what discount. So before we reach at a customer's place, we know what is the usage and application of this customer and what product we need to pitch and with what value-added services. So I would love to take you through an audio/visual which actually summarizes our philosophy of BSVI Phase 2. Can we have the AV, please? [Presentation]

So you would see that the communication also has changed from being technical and attribute-driven to more functional, communicating the functional value and also going beyond and communicating the emotional value in the day-to-day life of the driver or for that matter, what the fleet owner is expecting. So that's what we've done in BSVI Phase 2. Coming to the fifth lever, which is about the cost structure, wherein we have been pushing the [ annual up ] to lower the breakeven. On cost, I think we continue to do our efforts on teardown and benchmarking, not only of Indian vehicles but also the ones which we are importing. This is not only from the cost perspective but also from the technology perspective. I think one big capability that we've built into the organization is now cost engineering cell. So there is a large enough sell of more than 50 people, which has been put in place. And the job is to actually drive target costing at source and shoot costing. So target costing is something which helps engineering to design to target cost and should costing, which helps the purchase group to negotiate to should cost. I think this is a significant capability that we have put in place. Over these years, we've also been revisiting our manufacturing strategy and the make versus buy. We will also compare the financial structure of some of the able measures and who does very well. And for example, [ Pakar ] is one who actually does very well on financial metrics. And we have been, therefore, tweaking our make versus buy. We've been able to improve or reduce our work content by a significant extent during this period. On capital efficiency, as I said, we've been able to implement the entire modularity. We've reduced 1/3 of our platforms. We reduced 1/3 of our modules. And we have the capability of delivering 15% more products and also capable of delivering the electric products on the same architectures. So that's a big capability that we have built. And this will -- this standardization will help us reduce the complexity in downstream functions and thereby reducing the fixed cost gradually. We've also upgraded our facilities to be future-ready, especially in the domain of product engineering as well as process engineering and manufacturing. On cash management, we have fully implemented the digitalized sales and operation planning process through Anaplan. So it's an end-to-end digitized process with a short-term, midterm and long-term view, which is also connected live to rough cut capacity planning of suppliers and our own planning process, capacity planning, and Ramanan, my CFO, who is sitting here, he is able to track the cash position on a daily basis by using Anaplan. So I think this is one big migration we have done. And as a result of this, I think this year, we were able to deliver good cash flow not only towards the end of the year, but also during the quarters as we went towards the end of the year. I think this is a strong capability that we've been building, but we still have a good way to go, and we'll continue on this path. We have been growing the non-vehicle business at a fast clip, we've grown in last few years, top line by almost 2.5x by maintaining or increasing the profitability. Our spares penetration, which was below 20% is now just touching 40%. Service ratio has gone beyond 40%. We made our spares product portfolio very competitive introduced standing and started leveraging branding. We've increased our network, so we've increased the number of retailers. I spoke about the Guru Mechanics who are also in our spare parts. We made them digitally-enabled to improve their effectiveness and have a connect with the Tata Motors ecosystem. With the use of Anaplan, the back end and players are also directly connected into the spare parts requirement and the spare parts business. We've introduced this e-commerce storefront for selling the spares E-dukaan. And I'm very pleased to tell you that last year, we actually grew by 280%. Initially, E-dukaan was made available only to a few key accounts. Now we have increased the number of key accounts we also made it accessible retailers who are now actually buying spare parts from E-dukaan. We are also having this Bandhu digital ecosystem for the Guru Mechanics, which we will leverage to ensure that we are able to increase the service penetration further. On the shared mobility, last year was about preparing ourselves to deliver the contracts profitably, get our systems and processes in place and increase our engagement with the government agencies. So you know we won the CESL tender 1. In the record time of 10 months, we were able to create a platform, modular platform, which can deliver next-generation electric buses with higher range, higher energy efficiency and with capacity to deliver 9-meter bus with 900 mm floor height , a 9-meter bus a 12-meter bus with 900 mm floor height and a 12-meter bus with low floor. You started delivery for the CESL tender 1 in Delhi, ready to start deliveries for Jammu and Kashmir followed Bangalore. So we have informed all orders of 2,600 with us, which will lead to this kind of revenue growth during the year. But in addition to this, we have created a subsidiary. The subsidiary has focused on putting in a lot of standard operating procedures in place because we were a company which was engineering, manufacturing, selling and servicing products. Now this is about running depots, running schedules for the buses and so on and so forth. So we've created capabilities. We have also put digital capabilities in place there, whether it is SAP or a few other digital apps that we have for scheduling the buses and so on and so forth. So we are very well placed. In addition to this, I think Balaji was able to push an agenda on the CESL tenders, which is the gross cost contract or own, operate, maintain model, where there was no payment security, right? And therefore, bankability of the model was limited or was not there. We engaged with the government for almost 11 months saying that this is not going to fly. Because there is a limit to which any OEM can grow the balance sheet size by having the buses on the balance sheet. The government understood but they went ahead with CESL tender 2, we didn't participate for want of payment security mechanism, the government came up with tender 3, we still didn't participate. There was only one bidder and finally, the government had to pull back the tender. And now we are very happy that the discussions for a payment security mechanism is in advanced stages, and we believe CESL tender 3 will come back with the payment security mechanism, and we will participate very aggressively in that. So that is the Smart City Mobility business update. Going ahead, I think Shailesh also touched upon the mega trends from a CV perspective the 3 mega trends: ACES, Sustainability, and digitalization. And sustainability, I'm just going to touch upon because my colleague Kutty is here, who's going to immerse you into sustainability for 45 minutes. But I give a very high-level perspective on what we are doing in the business to be the leader on sustainability. On ACES, there is a very good pickup which is happening on each of the trend. First is connectivity. And you've seen what we are doing in Fleet Edge. In shared mobility, you've seen what's happening in buses. And with the fleet care so that we have, I think gradually, it will start shipping into the trucks also. Electrification, of course, we know, and I'm going to speak about it. Autonomous will not be here to be driverless, but it will be here to increase the safety of the vehicles on the road and for help reduce the turnaround time. And that will, therefore, lead to higher top line for the fleet owners. I think the ACES will therefore lead to a lot of servitisation, and we've already seen that in the smart city mobility business. It will also come in maybe autonomous as we go ahead. So we are investing a lot in technology and ecosystem development, which is a key imperative because each of this technology can't be accepted by the customers unless we actually orchestrate the entire ecosystem, the way we have done in -- whether it is a Smart City Mobility Or also electrification. On sustainability, we are focusing on 3 pillars that is getting to Net Zero for greenhouse gas emissions. Second is circularity. And third is about preserving biodiversity. And I'll speak about it later on, but we have our Net Zero road maps in place. On digitalization, we are looking at not just reducing the friction points for the customer in the ecosystem, but also delivering a lot of convenience and then building new business models for us. I think that's a clear imperative. And in Fleet Edge, we already started monetization from this year with a subscription-based service. So we left a significant mark in Auto expo 2023 when we showcased 14 vehicles and concepts, covering all zero-emission propulsion technologies across the portfolio. So from the smallest vehicle to the biggest, it included battery electric. It included hydrogen, internal combustion engine, hydrogen fuel cell electric as also drop in alternate fuels, which is CNG, LNG, flex-fuel. I'm very pleased to tell you that we have a 30-year old joint venture with Tata -- with Cummins for engines, internal combustion engines, diesel internal combustion engines for medium and heavy commercial vehicle portfolio. We have taken that ahead and formed a new joint venture to design, engineer and manufacture all the zero-emission technologies for medium and heavy commercial vehicles, which will include hydrogenized, fuel cell as also battery electric. So, this secures our future to a great extent because Cummins as a company has been investing a lot with acquisitions as also investments within their company to develop technology on zero-emission for commercial vehicles, which is going to be a bit different from the cars. We've also introduced a lot of features on ADAS and you saw in the video, and how we are using those to meet specific requirements of Indian customers. On fleet edge, I would rather speak on the next slide. So in terms of electrification, the Ace EV is already available in the market. We started delivering, selling, and it is actually meeting the requirement. The customers are delighted. We also have the FAME certificate. In the new structure, it does take a lot of efforts to get the FAME certificate, but we got that for Ace EV as also our buses. EV buses are -- anyway, we have more than 700 buses running and the new buses out of the 2,600 orders have also started being delivered. We also showcased the E.9 battery electric vehicle, and a 55 ton hydrogenized tractor, which will be used for multiple purposes. These are still under development. But for each of these vehicles, we are actually discussing with an anchor customer and co-developing this product, as well as the required ecosystem, which will ensure the success of these vehicles when put to use. While doing so, we also have been working on the ecosystem on the front end as well as on the back end. So we have put in place our manufacturing strategy, the make versus buy. A lot of supplier agreements have been put in place. We started securing supplies even for batteries. And I'm happy Tom is here today. He's going to talk about the battery company, which is going to secure all our cell supplies, as we go ahead. With the Cummins agreement, it also secures us for H2 as well as fuel cell. On the front end, whether it is fleet management, service support, I think we have also been putting that ecosystem in place and working with anchor customers is actually helping us in this regard. Coming to Fleet Edge. I think Fleet Edge, to put it simply, is a next-generation connected vehicle solution that enables superior vehicle management, fleet management and also finally, the entire logistics business management by leveraging the superior and real-time insights. The Fleet Edge combined with the physical world capabilities that we have in terms of network, the product strength, et cetera, will offer unique convenience and peace of mind to the customer. And it also provides an opportunity to them to improve their business. We have announced Fleet Edge through the years with newer value propositions, and I'm very happy to tell you that we have more than 160,000 customers, more than 400,000 vehicles on Fleet Edge already, and more than 80% monthly active users, which is really a big number for a digital business. We've also started the subscription, as I said, and there is a very good pull because the customers find value in using the insights to improve their business. Lastly, while Kutty is going to speak on circularity, I think what we have done very briefly on net-zero greenhouse gas emissions, we have our product plans in place aligned to SBTI, science-based target initiative, which will enable us to achieve net-zero greenhouse gas emissions by 2045. In the operations, we have created a clear road map to migrate to 100% renewable energy by 2030. In fact, we should be able to do it faster. And believe me, it is a positive business case for us. We've now started evolving our channel partners as well as suppliers, and even customers. When I go and meet the key accounts, they want to know from us, they want to know how can we help them to become green and to meet the larger agenda for the country. So we are developing capabilities towards this, and Kutty will speak about it. On circularity, the first thing is about water neutrality. And we have 2 plants, which have already become water neutral, and we have a road map to get other plants by 2030 into water neutrality. Zero-waste to landfill, another important objective, we should be there by FY '30. Rewire is an important initiative that we have, which is recycled with respect. So this is the first franchised scrappage facility that we have initiated, wherein we brought best-in-class inputs in terms of process, IT infrastructure as well as supply and demand connections using IT backbone, and we have clear plans to put a franchise-operated scrapped center -- centers across the country. On Biodiversity, I will actually leave it to Kutty because he's going to talk about it a lot of passion, but we've also started our journey on this. And this is, therefore, what we've done on sustainability. We are clearly committed to lead this agenda in alignment with the project Aalingana, which has been started at Tata Group level. So that's all from my side, and I will end with an AV on Fleet Edge, which actually communicates the value that it is delivering to the customers. Thank you. [Presentation]

Thank you, Girish, for the insights. We'll now take a short 15-minute break. Please join us for Tea in the pre-function area. Thank you. [Break]

Can I request everyone to settle down, please? We're about to begin the next session. The electric vehicle business is scaling new heights and the accelerated pace of adoption of electric vehicles would necessitate securing the supply ecosystem for batteries. Today, we are delighted to dwell into greater details of Tata's battery venture, Agratas Energy Storage Solutions. We have with us today Mr. Thomas Flack, CEO, Agratas Energy Storage Solutions to take us through the vision that Agratas holds, and how it will help in securing the future for Tata Motors as well as JLR.

Good afternoon. Firstly, I'm going to take you through a very brief journey. The Tata Group has been looking at this segment for about 3 years. And it's been a project that we've coded internally, Project Apollo. So we've talked to 1,000 people around the world about something called Project Apollo. People still name us Apollo, we have a different name now, which I'll explain. The journey was about what we call a mismatch of disruption and assets. The assets that go into battery making is so substantial, but there's an interest in it and a nervousness about getting into it because of that dynamic. And so, what we saw was the need for us to engage in this sector to help take care of what is the supply chain of the Tata Group in the auto sector, but also as a profit play globally. And so, this is probably one of the first Tata Sons ventures directly into a multinational from scratch. We're very proud of that. Consistent with that, we wanted to study it and get it right, and we wanted to leverage the group, but we also wanted to have Indian roots. And so, when we began the journey, one of our first asks a few months ago when we set the company up was to go back to giving us something that is purely India. And as part of that, we went and searched and searched and searched and found something that's very interesting to us. There's a Sanskrit word Agra. And it's essentially a feminine word or based on Mother Earth, and there's a beauty on that. The word itself translated into English is roughly leadership. There's a beauty on that. Batteries, green trying to be first in India. The word fit. And then, we want to be doing something that's really bold. And so, we merged this word into something with essentially a word Gravitas. And we came up with this new name for the company, Agratas. So we're very proud of it. It has these deep roots, bold leadership, feminine form, take care of Mother Earth. For the past 18 months or so, we've been designing battery plants. This is an actual battery plant design. They're much bigger in person. They're called gigafactories for a reason. I'm going to do a little show and tell for you. This is an actual EV battery. The good news is, if anyone needs a cell phone battery, this will probably get to about a month's charge. Essentially, there's a lot of work going on to what you put inside of a battery. And I'll explain that in a minute when we get to the technology part. There's also a lot of work that goes into how you shape a battery. How you invent it. How you attach to the charge discharge. How it sits in a vehicle is important. And so, just as a visual reference for you, we designed this. And if you take about 130 of these and this orientation and you stack them along a row, you can imagine the bottom of a vehicle. So a battery like this with its power capability and its energy density in India, we can make out of a certain chemistry that can power a very affordable, as Shailesh noted and Girish noted, a very affordable battery pack of about 50 kilowatts, 130 of these, you can push a small SUV 400, 500 kilometers per charge. These are designed very smartly with the idea of how long they last as well. So this battery lasts a lot longer than the car, and it's extremely safe. So we've worked a lot and very hard on coming up with these ideas. I'll explain more of what's inside in a minute. Who are we? So a battery company starts out with -- I'm going to use myself as a visual guide, is this part. So you have to know how to make a cell, validate it, develop it, produce it and make sure it's fit for purpose. But gigafactories are really expensive to produce, and they're sitting in an ecosystem. And so, in order to be good at this, if you want to politically derisk yourself, you need to get back into what is the raw material and supply. And it's very complex and very expensive also. To take material from the ground is difficult today. There are scarce resources available, but not scarce. Needs intervention, refining the materials to be used in a battery also important. This is the next piece that's really important for us. This is really expensive to do. This is not expensive to do. And that's actually taking that blue box and putting it into a big flat tray. That big flat tray happens to be one of the more complicated automotive designs, period, safety, NVH, durability. It's an actual fluid controlled environment. It hits pretty much every form of physics that automotive engineers have to struggle with today just to make a pretty tray in the battery box. So it's a very complex thing. We also -- and Mr. Kutty, will be very happy to hear me talk about this, need to have a complete ecosystem. So where do we play? The factory you just saw makes the blue ones. But as a company, will be plugged into a complete ecosystem, which I'll explain some more about with our sustainability plans, and we'll be helping to develop our own raw material supplies, all politically derisked. Some of the supply chain you can actually make. So for us, as an industry, in our operations in Europe, we have to make the cathode active material, CAM. Don't have to remember that acronym, but there's something called the CAM that goes into every battery. And we have to make that locally in Europe to supply Europe. In the case of India, we have to do the same thing here. So next to a gigafactory, you also have a CAM factory, ideally. Attached to a CAM factory, you have recycling center, hence, you get this whole system to going. This slide essentially presents the idea that inside the factory, and this is exactly what we've designed. It's a green factory, and it's powered by energy. You're going to hear energy meet from me a few times. I'm even going to finish on energy. It's probably the single most important thing we've been working on is being able to locate these factories with agreements to get clean, sustainable supply of renewable energy at affordable prices. We started our journey with almost a gift in a sense that Shailesh, Girish, Balaji, the whole leadership team have said, "Let's do this together," and that's an amazing thing for us. We're signed on to do about 40 gigawatt of power for this battery supply power to JLR, and about 20 gigawatts to Tata Motors that does not serve all of their needs. So one message to the whole room here is, the suppliers that work with these companies today will continue. We're part of the expansion in their next-generation vehicles. We're not here to displace any of the current relationships that they have, very importantly. These relationships are very important. I'll explain why in the next slide. But we've been at this for some time. And so you'll understand more about what that relationship looks like as far as how JLR and TML is what we call anchor customers have behaved. This is a typical vehicle development gateway process. If you know us as truck companies, it takes us somewhere typically around 4-plus years to make a standard auto passenger vehicle. And in the commercial vehicle sectors, we do a lot of what we call subprograms, and so they're shorter queue programs. Regardless, the gateway processes are fairly protracted. In order to make battery packs into those, they're a little bit less protracted, but there's a lot of work to get these because of the safety norms around battery packs. For passenger vehicles, it's very long. Commercial vehicles, slightly less. Again, no safety norms as yet. When it comes to cell design, the cell that I just mentioned, has been under design and development for about 2 years for Tata Motors. This is one of the cells. And so, our relationship with them very quietly has been to work on what are the needs of the company, so we could begin with what we call our lead cells for our anchor customers, again, about almost 18 months of actual cell development that's been going on for both JLR and TML. We're thrilled as a battery company, there isn't one like us in the world. It's a very bold thing to say. Why? We got capital. We have 2 anchor customers and we know, how to get the batteries designed developed and manufactured through other relationships. And we have the opportunity through just the anchor customers to work on a full range of product. And so as an example, the cell that drives a bus is not that cell. It's not ideal. It's optimize. Wrong chemistry, wrong format and size. We have an opportunity to work with Girish's team on building the absolute best possible cell for the actual experience that he's driving with bus as a service. That's unique to India right now, and he's leading that. This is a thrilling segment for us. We have the opportunity to also collaborate with him on investigating sodium cells that have an interesting angle of completely derisking India from any importation of critical battery materials. And with a little bit more work on the sodium ion solution actually potentially not just work in energy storage solutions, but also potentially in buses. So put a pin in that, but that's something that this company because of this relationship is able to work on. We're naturally placed to work with 2-wheeler and 3-wheeler. For us, these are extensions of what we're already doing. There's a different format that's ideal for those sectors. So it's a cylindrical format. You've seen, a duracell battery, bigger that fits well for those applications given their package configurations. And then finally, we're really excited about Energy Storage Solutions. Again, a very different pack. It's a complete kit that you sell. India has tremendous opportunities for this, not just in terms of traditional grid applications, traditional 5G-type towers and things. But frankly, there's a lot of need for microgrid or non-grid solutions in the country. Renewable-based nonbridge solutions or kits that are being discussed. This is something that we be very excited, giving power basically everywhere through these types of solutions. Again, renewable energy, not continuous. At a really good battery system, you get continuous power for a village. So that's the idea of batteries in those sectors. Very exciting for us. The technology inside of this guide, does everyone know what aluminum foil is and you wrap up food maybe. In this guide or 42 sheets of aluminum foil, they're made on the continuous line that's longer than this room. We put some nice material on side on top. We cure it, control it, shape it, chop it. Same thing for some copper foil. We put a separator between them, and we very delicately place them inside this box. The package that we defined and designed gives us in many applications, best-in-class elements like fast charge. We have very much designed an efficient pack. In terms of inside the battery pack, Imagine 130 of those 50 kilowatts, we've used up almost every inch of volumetric space to store energy. It's a very efficient design approach. That same cell. We'll have one chemistry in India, actually 2, but one initially, and a completely different chemistry, delivering much more power and energy for Jaguar Land Rover, exact same cell. It gives us that flexibility to make it, which means manufacturing-wise, we have great consistency between our plant. And you'll understand from our manufacturing strategy, that means I can actually convert a line with one chemistry over to another, not on the fly, big change, but not a big CapEx change, very important for our investment. I mentioned safety features before, and I mentioned volume efficiency. The two formats that we start with, everyone asked us this question, what chemistry are you going to make? So iron phosphate, that's the cathode description with the traditional graphite. These are the two sides of the battery in one case and then a higher energy density is a more -- a slightly more volatile cathode that allows us to deliver more energy and also, a little bit of silicon in the anode that allows us to retain as we charge discharge. So we have two completely different chemistries for TML and JLR. The truth is we'll do this in India. We'll do this in Europe, and we'll probably do some of that as well in India, just a question of as our second wave of installations because the power requirements will be there for India as well. This is the most boring and exciting slide, you'll ever see. Okay. So the world right now is filled up of all kinds of work on batteries, and there is a tremendous amount of media batteries. And as late people, it's generally hard for us to know what's what. And so, one of the great things we have is that we've got a decent lab that's actually up in the U.K. that's been working seriously for the past 3-plus years on just making sure that we understand the realities of the chemistries, and the changes that are coming to our industry. So this is like a battery war, if you will. Should I invest now? Should I wait? What if, I invest in something changes? What if solid state comes, do I throw all my assets away, correct? So this is a churn that's been out there. And, if you watch this sector, it is constant. There's always something going on. So our strategy that we've developed is to start with what we consider to be the most scalable, logical chemistries, using a form factor that allows us to literally walk through these changes almost unstated in regards to our CapEx, our initial investments. That's the most important thing, I literally can say today. And it's 3 years of work of trying to decode and figure that out. What do we mean by that? Well, if I want to add manganese to my LFP cell, do I change my line? No. If I want to add more silicon, do I change my line? No. If I want to get away from cobalt for sustainability? Mr. Kutty will love me for that, do I change my line? No, and so on. Where would I change my line? Well, if I could actually get something like dry coating, instead of a slurry going to a dry coating process, I would have to take that part of my factory out, and add dry coating machines. Otherwise, the substantial portion of these technology changes, including solid state, all go through the same form factor, which means as an industry, the auto sector that we're performing in for our first anchor customers, they have the ability to plan and stay with battery packs and vehicle integration that stay with this. So, as a few of these as we can make with the substantial investments that go into battery making, the better. And that's essentially what this technology plan was designed for. I'm very proud because we have had some good success with our labs in the U.K. I'm also really excited about building these labs in India. So this is almost an advertisement, a small request. If you're really, really smart, and we'd like to do something outrageous and challenging, call us because the labs that we're going to build in the area around Bangalore are going to be world-class. So we've designed them. They're expansions of what we have in the U.K. with some new toys that we think are relevant to the sector. And essentially, our goal is to take that capability, which has been mostly in evaluating and start to actually do some deep core IP of our own, in addition to expanding our partnership network, which I'll speak of in a minute. These relationships in both India and U.K. are going to be tied to actually our local ecosystem. So it's really important for us, for instance, the Bangalore Institute of Science will become a partner institution. We will develop curriculum with them. We will do co-sharing of intellectual property development, actual research and will be a place for employees or students from the university to come seek employment. We're thrilled about that exact same model with the University of Warwick, Oxford and others in the U.K. and how we can collaborate with Book University basically brewing talent. This model is existing everywhere in the world. It's something we need here, desperately need here. This is a profile of what we call partners that we're looking at. So, we've identified the who's who of doing battery work in the world. When I say battery work, I don't mean producing. I mean, the next battery. Doing the fundamental research that will generate the next battery. Our goal is to develop a relationship with a few of them that we actually bring on as advisers to both our Board and our Chief Technology Officer, so we have access to a group. Let me explain that. Why is the group necessary? Batteries won't come from a person. The next generation will come from cloud sourcing, being tied into multiple years of fundamental changes in material, material behaviors and interrelating those materials into manufacturing processes. It's a very deep, deep, deep area of research, and therefore, you need a wide net. These relationships will start with at least 5 of those on a -- what we call an advisory council to help the company. This is a common model for some battery companies, very handy to get your net wide. And you also do collaborative research with the others, so that you're plugged into as much of that future span of changes in batteries. So you see it coming. And you know where to play and how to partner, while you're doing your own research. And as I mentioned, we'll be codeveloping our own local off the back of this, and also using these global relationships to make sure we have best-in-class talent in our teams. So, we worked a while on designing the plants. And I just had the team do a little bit. We had to have some eye-candy for the audience. So we had a team do just a little bit of a video clip to give you a sense of the scale of the gigafactory. If you haven't been next one, they're a bit on inspiring just given the sheer size of it. And this will give you a bit of a taste of one of our plant designs. This is an actual plant design with a rendering of what it's like to fly around it. And then unfortunately, in it at the end. Could you queue the audio or the video, please. [Presentation]

So this is the part we found interesting. Inside of a battery plant today, you basically have a chemical plant. And it's working with some, what I'll call, stable slurries and some which have solvents that are dangerous. They're all recycled in plant. That's good news. You've got to attach that to a very thin film. I mentioned the aluminum foil. You've got to cure it or get it into a controlled and consistent state. If you don't, you have massive losses, and you don't catch them, until later. So you've got to get that application just right. Once you get that actually applied properly controlled and cured, you then have to go into what we traditionally call discrete manufacturing. So stuff we know, but very high speed, precision manufacturing to chop and assemble what is that battery pack. It then goes into an environment where we control it -- actually go through forming, aging, testing and in a very elaborate warehouse where we plug them in and cycle them. Only after that, do you release it to a customer. And so what, if you think about that, you think of when we think of manufacturing, you think of quality control, you think of number of parameters of critical to quality and you think of how to optimize your yield. A battery plant needs to be in that 95% yield space to be really doing well. And if, you think of the plant I just described, it will have a staggering about 4,000 parameters that are monitored in situ in the line. So it's one of the leading examples of Industry 4.0, both in terms of controls, as well as the amount of in-process data that you have available to you for essentially data analytics. So it's one industry that is screaming for state-of-the-art with regard to process control. When we build these, they're very expensive to build. This is an example of a line in India, and this is actually 1 plant, 6 lines, and it produces about 8.4 gigawatts of power of battery cells a year, when running full. But the line itself is done where it's modular. We have the ability, while we're scaling it up, we launched one line, launch its sister and then you actually scale it up from there. That scale up is a really big important process, getting the first line right and so forth. And if it's done right, if something happens in the market and we need to pivot in that scaling process, given that cell design and our approach, we have the ability to also address that change with the customer. So it's really important to us to have the flexibility as we scale it up and also the flexibility, as I mentioned, to take the assets when finished and keep them in condition running, even if we make substantial changes to the chemistries. We also run what we call a pilot line. Pilot line is basically a small version of one of these. And it is essentially a place where our teams can actually work on optimizing the manufacturing throughput. Very important thing. All battery companies have is the pilot line, great training center, a great environment to actually run trials and understand all the material changes that we would endeavor over the coming decade of changes in technology. And finally, all the work we've been doing with the governments, if you haven't heard somebody talking about us going to some state or some place in the world lately, it's all because we're engaging governments looking for this. So what's with energy? Why is it so important? So to make a battery cell, if you wanted to make 1 kilowatt of battery cells. So imagine this example, 3 of these is a little over 1 kilowatt, I need 45 kilowatts of energy. Now I can cycle this 2,000 times charge, discharge, charge, discharge. So it does a good job with that energy once it's formed. But it's a lot of energy for a manufacturing process. To make the CAM, the cathode active material that goes inside this, it takes me about 35 kilowatts. So I've got massive energy draw to make what is essentially inside and also this informant. It has to do with all the internal processes and it assumes that I run an electrical plant, mostly powered by electricity, which we will. So our goal in all good battery companies are doing this right now is they're trying to identify, where to attach themselves to clean energy. Otherwise, what's the point and affordable clean energy. And if you can get that right with the government, you can compete with anybody. And the point of us doing this as a group is to do it in India to have it made and designed in India, but also lead the world in making it lowest cost, not cheap, lowest cost, world-class battery, and it starts with getting energy right. So we've spent a tremendous amount of time on this issue, trying to work with governments to secure that. And recently, you saw our announcement in Gujarat is essentially an MOU to start the process, but the foundation of that was getting them to agree to let us actually develop our own energy in Gujarat to feed our own plant. And so, it's with great pride that we're telling the world that now, but our intent is to actually bear our own source of power, make our own batteries. Ultimately, add CAM expand that campus and even going from 20 to 40 and beyond, and have it all fed by that same renewable power source, which is really transformative. Our arrangement there, the root of it is getting to that ability to self-serve the power at that lowest affordable price, which means, if somebody tries to import a battery in that class into this country, we will flat out beat them on price. Therefore, there won't be an interest for importation. We can actually set the standard for what India is and also position ourselves smartly so with that type of arrangement as a hub for exporting batteries, which is really fundamental to our business case. This was my opportunity to make batteries fun for you. We've been doing this very quietly and keeping our nose to the ground for quite some time. So I'm grateful for the Tata Motors team for giving us an opportunity today, to come here and explain a little bit of the work that's been going on. You'll hear more about this, especially there's some pending announcements, as I mentioned, with certain governments that are all work in progress, and you'll hear in the coming days, many of those things come to life. So, thank you all very much for listening.

Thank you, Tom, for the first-hand information covering all aspects of the company. We now move on to the next session. Tata Motors as an organization truly values its human capital, as its most valuable asset. I have Mr. Ravindra Kumar GP, Chief Human Resource Officer Tata Motors, to walk us through our strategy of building an agile organization with a capable future-ready workforce amidst an inclusive culture that echoes the Tata values. Over to you, Ravi.

Thank you. Good afternoon. So you've heard about the story about our performance, our story about what strategy we have and our aspirations. So we'll spend a bit of time talking about our team who makes it possible. We have about 45,000 employees working at Tata Motors and this is working at our facilities in India, Italy and the U.K. We have an engineering and design center at the U.K., which is dedicated to Tata Motors. I'm not really talking about our associate employees who the dealers, vendors, et cetera, whom also we are invested in, especially the ones with our dealers, but I will not be covering that piece in the conversation today. What I hope to walk you through is what's our approach to the overall talent. By that, we essentially mean leadership and succession planning. Culture because that's what makes things go around in our organization. And then finally, capability with so much of change being -- so much being spoken about the change in the automobile industry, how are we equipping ourselves with the right capability to execute some of the strategy that we have shared with you. So, our work is mostly focused around these 8 areas as our talent, capability and culture strategy. The way we look at it is we really have 4 stakeholders for the HR strategy in the organization starts with the Board and the NRC, the senior leadership team, the people leaders and the employees. The need of each of these segments is different and focused, right? So for an employee, it is my career, my training, it could be his or her pay benefits, et cetera. While for the board, it's really about succession planning and capability. So what we have here, 8 broad areas, and I will dwell into 1 or 2 of them in a little bit of detail in my subsequent slides. But these are the 8 areas that we've been focused on, and we have clear plans with a lot of support and sponsorship by our leadership team and all our people lead us to be able to achieve it. right? Culture. We have been on a culture refreshed journey. We are a 75-year-old organization, but we need to learn adapt with the changing environment, with the changing demographics, which is coming to work, right? It's not only age demographic, which today is also gender. So all these, how are we adapting our sales and we are particularly focused in order to gain agility, to have a much more empowered collaborative and workforce that is much more open to risk-taking in order to be able to achieve some of the things that we are sharing with you. Our national capability, particularly, you heard a lot being spoken about ACE or CES, connected electric shared and safe vehicles, digitization, which is impacting every aspect of our industry sustainability. All this, how do we make sure that this is a language that is well known in the organization, we are all aligned in the same direction. Leadership development, from people leaders who really translate what the organization wants to achieve to the employees and the feedback from the employees, so they are all engaged. How do we do the development of that succession planning? All mention effectiveness. In the past couple of years, we have created so many new businesses and therefore, we need newer organized, new ways of working. For example, Girish talked about mobility as a service. Today, we operate transportation and municipalities, and we've never done that before. So build-own-operate model is something completely different. Building for such transaction is very, very different. Managing the transaction over a 10-year period is completely different. So what kind of organization do we need, what kind of capability do we need, that's something that is a change for Tata Motors in addition to electrification, we are learning to do that. Employee experience, our simple belief is unless we give employees world-class experience internally, they will not be able to translate it externally. How do we do that? When we talk about diversity. We have one of the most diverse workforce in terms of gender -- sorry, in terms of age. But in terms of gender, in terms of other things, including sexual orientation, we have to be far more open because that's what the new age workforce wants. We are working on that. We are really, it's a privilege and actually, it's something fantastic that of our 8 large manufacturing sites we have, 7 of them have unions. These are all internal unions, but the relationship we have with them, I think we're really blessed. It's -- I think it's a lot of credit to our predecessors. It is the Tata brand, not just for employees who are engineers and white collar, but even our [indiscernible] workers, we have really very proactive, positive relationship with the union, and it has given us a lot of benefits, and we continue to do that. To do all of it, we need HR capability. So this is broadly what we are working on. How do we actually bring it to life? It's just not on a piece of paper, but we have an operating rhythm built around it with the environment of employees all the way up to the board. I will walk you quickly through this on how we actually operate. Usually with the Board, we discussed our strategy in the month of October, it translates to actual budget plan by March. Using that budget plan in March, we actually do our employee goal setting. It's a cascading, we use a balanced scorecard methodology. So the aim is to get every employee to help them understand what they are doing, how does it connect to the larger purpose of the organization. What's the role they play. Because at the end of the day, people want to work with a purpose and they want to know their efforts, how is it tying up to what Tata Motors wants to achieve. So it starts with that, with the goal setting. I'll come back to some aspects later. But once you have a goal setting, we really get a chance to sit down in the month of October with the employee, and talk about how has the year been? And we are really talking about what help do they need and also we talk about what is their career aspiration, right? Using that information in the month of December because we talk about people's aspiration, we do a succession planning for every people manage a role at Tata Motors. And later on in the month of February, because you would have spent so much time in media discussion with employees about their aspiration, their development, succession plan, we actually work with subject matter experts to come up with a training plan. And we divide our training plan into 2 halves or 2 calendars. The first one gets published in April, it goes for 6 months, right; from April to September is the first half of a calendar. The origination was actually in February, where we talked about a learning and development plan. Moving forward, what happens is whatever goals, we also do a culture survey, I'll be sharing one slide from there on how we even measure ourselves on culture. But having completed a year, loop is our performance appraisal. It happens in the month of April. Employee, self-appraisal, managers appraise them. Based on that, there is rewards, et cetera. Our NRC in the month of May decides the performance pay for the entire company and for the senior leadership based on the year's performance. We do that and they get employee salary review. Now, because we've had so much of discussion again here around people and leaders, we sit down in the month of June, and we talk about our organization. How is our organization structure. Do we have the right people in the right place. How do we help them do even better. Who needs help. Who needs our next challenge. And then the whole cycle kind of continues. In the month of September, there is a dedicated NRC, which talks about talent, capability and culture, and there's a report out to the Board. So in this way, whatever I showed to you in my previous slide is how it gets operationalized is in this fashion at Tata Motors, right? We talked about capability. What I hope to represent to you in this slide is across multiple functions, right? But you see there organizationwide capability all the way higher education. These are different areas and different levels in the organization. Level 6 to Level 1 is our organization. We have been able to develop an offering based on how the organization is growing, has plans to make sure that we support capability building. Shailesh briefly mentioned this. We have about 12,500 white-collar employees, right? 90% of us are engineers. And in that, probably another 90% are mechanical engineers, but our world has changed. But we do have a workforce that knows auto industry like nobody else. What we need is to keep them with the changes and that's really around CESS, as we call it. So we have programs to build capability organization-wide, in CESS, in digitization because every function, every aspect in the organization is getting touched by this as it could be Industry 4.0 also how we go to the market. So CESS digitization, Industry 4.0, particularly in manufacturing and sustainability, this is a capability we aim to build across the organization, across all the levels of the organization. Then, it could be functional areas at different levels. It could be leadership capability. It could be specific focus on building women leadership. Each of these areas that you can see are when employees transition, different levels in the organization, we invest to equip them. So we have a plan deck this, which has been in place, and we continue to build on it. I'll walk a little bit through one aspect, which is CESS, which is about the one that is the disruptive piece in automobile industry. How are we doing it? What I have for you here is of the different functions. And I don't have all of them enabling functions are not on this slide. But what I'm saying actually impacts them also. For example, I talked to you about mobility as a service. The entire finance approach to this is very different from running a manufacturing and a sales organization. So that's an example to say every function is getting impacted because of this. So that may not be represented, but I'll talk about the core functions, value-creating functions here. So these are the different functions. And on this axis, I have the different levels. We don't necessarily start and end with only the white collar or the executive employees. We also have to look at what's happening in the shop floor because the way manufacturing is changing and what needs to be known, as you have a lot more software and batteries in the car, we also have to make changes in the shop floor. So I'm going to walk you through engineering as an example, and it's pretty much the same across, right? So it starts with upskilling our existing workforce, right? Now 8 factories with our latest acquisition. And this workforce is very diverse in terms of, again, age demographics, right? We have 18-year old, all the up to 59 years old working. How do we equip them to work in the modern way, right? Next one is, once we get into engineers, right, we have a foundation program that we expect all our employees to go through. It's about 16 weeks, 40 hours program. It talks about the foundation of [indiscernible] mean for their particular function. Then based on the need, so while it is common for all engineers, but for someone working on ADAS, there is domain expertise program, it goes into a lot more depth. Then looking at senior leaders, they need to weave this across the organization together. So there is a program for them, which may not have the same kind of depth, but it has the kind of breadth to talk about what is it that the team members are working on. Now, if this is an example I shared with you is for engineering, actually, we have something very similar for manufacturing and services among our shop floor employees. The foundation program with a little bit of tweak is across all functions. Similarly, each of the areas, based on their need, they will get -- and the next level program is not necessarily for everybody, but it's based on the role and need, we have that and for the senior leaders, again, it is common. This is an approach that we are having, and it's a journey that we are on. We made -- we started the year in 2021. 2022 and 2023 have seen a lot of progress. And we hope to complete this in this and the beginning of next year, we recover most of our employees, except perhaps the new joinees. This has been our approach, and this is our approach in some of the other areas. So for example, Industry 4.0, something similar, but limited to the manufacturing people. Our aim is we have a very large, well-trained workforce in automobile industry. We can't leave them behind. We need to help them. And we also can, therefore, leverage their industry knowledge. So this is how we are equipping. Because if you look outside within the country also, the workforce that actually worked on ACES and CESS is fairly limited, right? And we perhaps have one of the largest workforce being the market leaders in this area, but we are working to make sure that we help all our employees to graduate to the new requirements. I mentioned you do not just limited to our executives, but also to our shop floor employees. This actually gives you a sense of when we see all our technicians, our entire shop floor workforce, we have varying degrees of training for them based on the requirement, while some of them will get a sense of -- we'll get a foundation program in everything, fewer, based on the work they do, maybe trained in specific area, this is the kind of investment and commitment that we are doing to build our capability. Similarly, higher education, right? Learning by doing is one of the oldest ways, but you need to accelerate your learning by getting a sense of theoretical knowledge. For that a formal education is required. So we have tied up with universities across all our major sites, wherein we are helping our employees either to go through a diploma program or it could also be -- it was on my previous slide, some of our diploma employees to become engineers. And in most cases, we have collaborated with the education institutions. Our SMEs have been able to shape the curriculum and these are focused into which way the auto industry is going. A little bit about culture. The difference in today's world about culture is, culture is no longer ordering by the leadership team, but it's actually co-created with the employees. So about 2 years ago, right, we work with our employees involving a majority of them, starting with the survey to really talk about how do you look at -- view our culture today? Where do you think we should be? Where are we today in the journey? Starting with that, we then had a lot of discussions with employee groups of waiting, experience, demographies, et cetera. And what we ended up is a co-created what we call as a culture credo, right? And what we said is that for Tata Motors, while leveraging our legacy and history, while building the foundation on the Tata Group values, the fundamental one being TCOC or Tata Code of Conduct, we believe for Tata Motors to succeed, these are 4 culture pillars as we call them, which is be bold, own it, solve together and being empathetic is what we give us success. Now be bold could mean anything. So in our context, how we've defined be bold, and we as including employees, right? How we've defined it is that our ability to take calculated risks and our willingness to be agile, that is reexamine our current position and to be open to new ideas is what will give us success. So like that, what you see, we have defined it calling out under own it. It's about being empowered and having owners' mindset. When solving together, it's about holding each other accountable. That's also a very important aspect of collaboration because if that doesn't happen, we won't be able to work with each other and then collaborating with each other and finally, embracing diversity and continuing the passion for our customers, which we see the strength for us. We've continued to leverage it. This is how we have defined what we want Tata Motors culture to look like, and we are actively working towards it. All our HR processes are geared towards it. Our recognition system, our evaluation system, our training programs are all geared to this. Again, we don't leave it as a page. We put it into action. We measure our progress. So what I'm showing here in this page for you is this entire journey started with a survey, and we continue with the survey to measure our progress, which is something that all our employees participate in. We do it with an external partner. There are really three aspects to it. One is we call as engagement, and this is something that this organization was our partner who does this survey, does it from many other companies in India. So those questions are common. So what you have on the right-hand side, what we look at here as an engagement piece is, if I can quickly explain to you. We -- our engagement this survey in January was at 23%. We made a lot of progress from 2020. How does it compare to the industry? We are at or above the Indian -- above the Indian auto average. But I think, we have some wonderful companies in the Tata Group that we can learn and leverage from. So we are on a journey to continue to do that. The next piece is our culture pillar, our 4 areas or 4 pillars. We are tracking progress in that. And in order to bring it to life, we need to continue to help our employees understand it, especially the new employees. We need to help an emotional connect with it. They need to see action that translates into results. So, we actually measure ourselves. And this is something, again, we openly discuss in the organization in our journey to build the culture that we want. Talking a little bit about diversity, equity and inclusion. I think this is a topic that the entire corporate world. And we, as a country, are also seeing a lot of change. So the most important thing is having an openness and conversation around it. So we have sensitization workshop, where we are talking about why, how and where do we start with inclusion, equity, right? I'll give you an example. We are working with a very well-known education institution in Mumbai, in the social work area, where we brought in transgenders to our office. They visited our shop floor. They visited our office. And we had a chance for them to look at how it means to work in Tata Motors. We had a chance for our employees to interact with them and see what kind of change happen. And believe me, there's a lot of learning for all parties. This is something that is a journey for us that we will continue to work on. We have to revisit our policies and processes. So rather than just share numbers with you, what I want to share with you is that this is a mindset change, which we are actively working on. While, we are doing a lot of work to lay the foundation, some of the areas that we had begun to work, a few years ago have begun to yield some fantastic success. So I want to convey that story with you with a small video. Can we please have the video. [Presentation]

So what you saw in the video, I just want to repeat, every Tata Harrier and Safari is made in a line that is meant only by women. So we have about 1,800 women working on this shop floor. And all of them are undergoing a diploma course today. And some of them, about 200 of them have just been enrolled to an engineering program. They joined us earlier, they've been moved to this line. they're undergoing engineering programs. So it's an earn and learn program that we have for them. And when I talk about the next slide, I'll actually start at the bottom, which I talk about how our unions have helped with the DEI agenda. It is easy to build a new factory with the latest technology and the latest practice. But in our existing plant in Pune, while we had this idea, one is we have women working on different parts of the factory, but give an entire line to them and we chose Harrier and Safari, believe me, it had to be taken from an existing line. And the union also stepped up, we took their maturity and their support and that made it possible. It's not a new factory. From an existing factory, we created a new line. They gave up or they agreed to move this line to this new factory that we have created, that actually shows you the maturity of our union leaders, right? So we have 8 factories, 7 of them are unionized, all internal leadership team. And we have an extremely collaborative and forward-looking teams, leadership team leading them. What we have done over the past few years is that it's now more or less very well settled that actually, we are moving away from our long-term settlement of wage settlement becoming -- are becoming a big event to it's just business as usual. Industry cum region is what we pay wages on. Bonus we have moved to a clear metric, which company's performance, quality and productivity is completely in the hands of the employees. They actually can track every month, how are they doing? The other thing I can share with you in terms of our approach to industry relations is that when we acquired the Ford plant, we acquired the plant although product is not running fully. There was not a blip. We just took our ownership 1 day, all the employees transitioned to us. We've had no issues. We are working full speed to get that plant up and running and produce once we are ready to do that. All the 800 workers that we acquired there, currently, they're going training, again, with an external university in order to equip them to some of the changes that we want to make. So the kind of flexibility that we've been able to display and which is seen in some of the results, hopefully, that you all see also possible because of what our workmen do for us on the shop floor. The attribute of productivity quality is a credit to them and what they're able to achieve. And just as an example of a couple of years ago when we faced COVID, right? The amount of cooperation we received from them was also tremendous because kind of changes we were asked to do on the shop floor to work, the way we work, the regulation that were there. We never faced a challenge with them. And all of this has been possible because our approach always has been to treat them with respect and treat them as our partners. Couple of points on other things that we are also constantly working on. Perhaps COVID gave us all the time, gave us a warning and all we stepped back and looked at it. But otherwise, also health has become a very important issue in our community society, but also now as employers, we look at it. One particular aspect is emotional health, right? So we've begun some work on it, and we had started it just before COVID. And let me tell you, in addition to their physical health, when people got locked in their home, one area that they really sought help was on the emotional front. We have a secure confidential lifeline -- phone line with, again, a very qualified external partner. So the work that began then where employees sought help not only for themselves but also for the family. We realize that's something we have continued it. So that is an area which where we do occupational health and safety and occupational health has always been -- we have medical center in the factory, et cetera, but emotional health is something new. I think as a society, we're beginning to increasingly recognize it, and we are helping our employees and their families cope with it. Preventive health once again, right? Prevention always better than cure, especially when it comes to cardio and diabetes health, our annual screening has helped us make a big difference to our employees. And this is also -- all of it comes in with exercise, work-life balance, it comes with healthy food. We have taken the help of experts were required either through certification or going through a program to make sure that we offer the best work atmosphere for our employees. Safety. We have large manufacturing sites right? And a lot of our activities that we do are things that safety has always been at the forefront. This is actually an unending journey, right? With every change in the work process with every new workmen or a trainee who comes in, we just have to repeat it again and again. And we are constantly making that effort. And some of the things that we've done, is we have developed something called a proactive safety index rather than wait for a lag measure. We measure ourselves based on the activity we do in the lead form, which are preventive in nature. So we do that. We've also identified what we call as critical to safety station. Stations where perhaps there is more likelihood of accident of injury. And we have spent time on it to make interventions either it could be engineering intervention, it could be change in process, et cetera, and we are seeing some very good results in it. And our aim is to be zero incident, manufacturing processes in the time to come. CSR. See, we've always, as a group and as a company, we've always been invested in the communities that we work in, even before the law mandated companies to do CSR. And it's also a great engagement venue for our employees. So we have a lot of volunteers among employees who spend time in the communities. And we are -- for years now, we've been focused in these areas, right? When we do our CSR work. And again, we have been able to see progress in it. The first one is health. We primarily focus on infant mortality. We are working with Anganwadis wherein we make sure that children between 6 months and 5 years get nutritious food, they also get basic education and our success rate there, you can see that in the area that we work, we've had 77% of the children have moved away from malnutrition to a healthy state. Education. We support state runs schools around the facilities that we work to supplement the quality of their education by additional coaching classes. In addition to that, we support children in the Navodaya schools to appear for IIT JEE and NEET exam, and our success rate is better than the average, the number of people who appear and what is the passing rate. Skilling. We have been able to help a lot of people, build capability to have a livelihood, be it within the auto industry or also. Otherwise, environment, tree plantation is something that we actively do. And now we've also tied it to the community that we increasingly plant fruit trees, which also guarantees an income to the local community and people who are in need of it. And then finally, we also work on overall rural development plan where we integrate from water conservation to better crop mechanism to additional income generating for the womenfolk. All these have helped us make sure that the community becomes far more sustainable, the healthy employers, education improves and we've also been to see, in some cases, the migration away from the rural area to urban areas because that call a whole set of other challenges is curtailed. And we have now -- and we partner extensively with the government in each of the locations that we work in -- and especially this one in Maharashtra has seen a lot of success, where the government is keen to take this model to other locations. So with that, thank you for your time, and I hope you got a sense of how we are looking at fueling our growth and achieve our aspiration by taking care of our capability, culture and leadership. Thank you so much.

Thank you, Ravi, for articulating the vision on building a future ready workforce at Tata Motors. With this, we will be taking a break for lunch for about an hour. And I hope you'll find some time to walk around and see some of the exciting new products that we've put up on display in the lawn area. We also have our engineering experts here today who will be more than happy to give you a complete lowdown on all the specs of the vehicles. We look forward to reconvene at 2:10 p.m. and continue with the rest of the sessions for the day. Thank you. [Break]

We are starting with the next session. May I please request Balaji to kindly come on stage to do the introduction for the next speaker.

Okay. Can you all take your seats, please? Thank you. So I don't want to introduce the speaker, where the speaker Kutty will introduce himself. I'm more trying to set this context for the session because so far, you've been hearing an extremely focused, pointed Analyst Day. And therefore, the sessions are all pitched towards cynical guys like all of you are on the table and trying to sell the story that there is a little bit of credibility in what we do. But this session is different. And we are consciously doing it after lunch, so you can get a mental break from what you have been seeing and hearing so far and move it into the next phase. I think I would require all of you to wear a slightly different hat for the session, and that's the reason I'm consciously pausing the session. You need to -- in a normal day-to-day life, there's enough things that get you keep your distracted. There's enough focus areas that you're on to, where most of them looking at our feet. And we actually don't reflect enough that includes me, that how lucky we are to be living in this planet, which is one of its kind. And therefore, it's our responsibility as humans, forget about our roles that we play that we leave this planet behind in a better place than where we found it. Safe and sound for the next generations. And I'm not trying to do this to create any drama, but I think it is an absolute brutal fact that it's high time we have this conversation in forums like this. And therefore, we should be clear that our actions of today, all of us individually that we do as well as collectively as organizations, collectively as economies will determine the future. And we should be aware of this and feel a sense of immense responsibility to get on to this -- that is actually a business imperative from a risk perspective, but an extremely exciting opportunity to start pivoting businesses into the future. So we at Tata Motors see this as probably the biggest opportunity that is there. To reimagine this company, to reimagine the future of mobility and to create sustainable profitable growth. And I mean, sustainable is not just green, it's also about profits for -- this has become more and more front and center of our strategy as to how we want to run the business. Because with this perspective, this session is being kept here. So therefore, what I would really request you is that try and appreciate the fact that how we are starting the baby steps, and I would be absolutely upfront about it is baby steps, it's not fully cooked. It's not something that I can come back and say we've got it all sorted, nothing at that but these baby steps are very important as we integrate sustainability into the core of the business. And accordingly, we have Mr. Kutty here, who's been with Tata Motors for the last 40 years. And in my opinion is among the smartest engineers we have to lead the sustainability journey as the Chief Sustainability Officer for Tata Motors. So that itself should tell you a very clear message that we are not running a tree huggers club year. we are talking pointed business results here and pointed solutions here, number one. And Kutty has been instrumental in launching the Nexon 5 Star GNCAP car. So he's a hard core engineer at heart, very clever, and I'm sure he's going to talk about that. And what do we see in him and there's a conscious call of the ExCom is to have somebody who can now look at a logical approach to addressing this problem of sustainability, which is very hard to pin down. It is a problem that's [ nice and wooly ] at 30,000 feet, 40,000 feet. But when you try to bring it down, you actually can't touch it, fill it and explain what exactly you need to do. And therefore, what he brings to the -- is a very logical problem solution approach and he blends it with passion, tons of curiosity and the extensive change management skills to make help Tata Motors make this transition because you need to wake up, rank and file and everybody has to move. So therefore, there's a huge task on hand. So for this session, what I'd really request you cut us some slack. Immerse yourself in this session. And as Kutty sets out the case for change and more importantly, which I think most of us get it with worthwhile to start from there and then break it up into manageable chunks, bite-sized chunks that we can address. And how do you make this long journey with precise logical steps. So that's what the journey for today is. I know it's going to be a different kind of a session to what you've heard so far, but I think that's how we start any nebulous journey. So back over to you Kutty. All the best.

Thank you, Balaji. Ladies and gentlemen, after a good meal. I'm going to try to keep you awake. But before that, I must tell you that I'm very, very happy with Tom. He mentioned me this. And at the end of the session, if you are also going to be happy with him, that I think I've done my job well. So Tom, we have got to clap at the end. And I'll explain to you why it's important. And all that Tom mentioned is about sustainability, but sustainability as precisely as Balaji spoke about, is very nebulous, means different things to different people. If you ask somebody sitting on my right, they may talk about human rights. But ask somebody on the left, you may talk about gender parity. If I ask somebody in the room, they may talk about carbon. Somebody who's associated with beautiful photographs that you hang in your calendars in your drawing rooms, you may talk about biodiversity. Somebody may talk about recycling. But let me tell you that sustainably is none of this, but it's all of this and more. And let me also tell you this story in Tata Motors is a story of immense transformation and transformation comes with a lot of pain. The last time the world experienced energy transition was when 2 World Wars happened. Every big energy transition normally goes with it -- what goes with it is a lot of pain. What we see in different parts of the geopolitics is again a story of energy transition and how do you secure the energy security, not just for a nation, for the people. when Tom talks about batteries, he's talking about securing the energy footprint, which is there. If somebody is talking about hydrogen, you're talking about that. But let me all tell you, ladies and gentlemen, all this comes to a common denominator which is called carbon dioxide. And carbon dioxide is not something which is unknown to us. Even as children, we were taught that we breathe in oxygen and give out carbon dioxide. We are also taught the trees during photosynthesis breath in carbon dioxide and they generate oxygen. And this whole thing is in the state of balance. I also want to remind you that when you are younger, you looked at the map of the world and you always worried why did God create the world the way it is. You were worried that why did 75% of this earth, why was it required to be water with only 25% land? And you will be surprised to know that the way it was created was exactly the right way because the carbon dioxide, which is generated because of various reasons, is absorbed by the ocean on a constant basis. Also, one thing I want to tell you before I get to the presentation, as children in the physics experiment when we were in the Class 8, our teacher pains to explain that anything which gets hot expands. Anything gets cold, it contracts. May not be exactly in the case of water because water behaves slightly differently. But the same is what is happening with the oceans. As a temperature of the art keeps moving up, the oceans are getting warmer and when the oceans become warmer, they expand and what happens, it starts getting into those areas, which are low line. A place like Bombay, if there's uncontrolled 4 degrees expansion of heat or 4 degrees increase of heat, 4 or 5 degrees, maybe 6 degrees heat, there could be a point of time much later into the future. That Bombay maybe history. And if Bombay is history, you could find that many people who live in Bombay can get into hinterland, get into different parts of India because India is a big country. And India is able to accommodate all and more, not a problem. But what happens to small countries, which are absolutely vulnerable and these are countries which are in great difficulty. The story of sustainability therefor in Tata Motors is about taking responsibility, it's no more business as usual. It's not talking about this is not my problem, it's for somebody else to solve. And it's not just about companies like Tata Motors nation states, continents, governments of different institutes -- of different countries have all come together nearly 30 years ago at the Earth Summit in 1992 at Rio. The scientific experiments yielded something phenomenally different from what was understood by mankind at that point of time. Ladies and gentlemen, I'll now get into my presentation to tell you that this is not about climate change. This is an era where we are all ready and going to work towards the paradigms of the future very different from what we encountered in the past. Many of us thought that the boundaries of a company probably stops at the balance sheet, the cash flow statement or the profit and loss accounts of that particular company. And therefore, maximization at a local level of a company was the need of hour. That's the way the architecture of the financial transactions of the world were created for the past 150 years. Come tomorrow, and if you want to maximize your opportunities, and if I dump my pollution somewhere else, outsource my pollution to somebody else, allow somebody else to manage my waste by dumping it to the seas, is no more accepted practice. And this is not to say that any of us in the Tata Group or any of us sitting around the table recommended. But the point that we want to say is it's not about legislation. It's not about regulation, but it's about taking responsibility what is your contribution, not just for yourselves but for your channel partners, and your supplier partners, and their Tier 1s and their Tier 1s til you get to the last year. So sustainability is not about solar panels. It's not about wind. It's not about batteries. It's not a hit -- not about hydrogen. It's about when human kind has decided we're able to pause. You're going to ask a question, what's the purpose of existence. That's the story. And therefore, when you invest into a company like Tata Motors, you don't invest into trucks, you don't invest into cars. You invested to the vision, which is encompassing this philosophy. So when you make those investments and when I get questions, when we have sustainability professions from the analysts asking me the same question, they go back with a sense of pride that now in Tata Motors. You heard what Girish was -- Balaji is going to say that this is a complete story. We're not doing battery just because it's fun to do it. I mean you're not getting into electric vehicles is -- because it's something which is interesting to do. It's simply because there's no choice. And this is no more a case of the boundaries of a company or a state or a niche. So it's no more fashionable to say, we are okay in India, but our neighbors are not okay. And it's no more okay to say that we are okay in Asia, but Europe is not fine. And it's not okay for the Americans to say, we are okay, but the other parts of the world is not okay. It's about all of us coming together to say, if we are not okay, and it's time to change, but we can be okay. This story, if you go to the next slide, you play the slides from there, right? Yes. If you go to the next -- this is a slide which I wanted to talk to you, this slide talks about what have we achieved in Tata Motors? And I just want you to understand that taking a nebulous concept like sustainability and breaking it down to a set of actionable. Ravi talked about 45,000 people working for Tata Motors directly. And then we have the indirect. And then I said we have the peers, so many of them, a single message when it goes down, to the last man who's contributing directly or indirectly to us, then change begins to happen. Change cannot happen however much if some of us sitting around the room say that we in Tata Motors are going to change, but we don't find the rest of the rest of the ecosystem is not going to change. We would make an impact, but it's not going to impact the planet. And unless the planet is impacted, many of us sitting around the room may come back and ask a question, why didn't you decide when you had the opportunity to decide? Why did you waste an opportunity? And we owe it to our families, we owe it to our grandchildren and their grandchildren to preserve the earth for whatever it is. The earth will take care of itself. Don't worry, but we will not be able to preserve our children and their grandchildren if you don't do what we're required to do. At the center of this conversation is about equity. It's not about profits alone, but I want to hasten to add that a corporation of sustainable only when it makes profits. When there is cash and when there are great cash flows, and everybody is chasing employment and greater and greater economic prosperity. Many of our colleagues in the past have come and asked me, is sustainability cost, to which my answer is no. Sustainability is not cost. Go back with a clear idea that whatever we are touching in Tata Motors, whether it's renewable energy. Whether it's water, whether it's gender equity, Ravi talked about LGBT. We're talking about ladies coming and working in our factories. I'm sure many of us had tears and eyes when we saw the young ladies talking about what they're capable of doing. And when we see all this happening and when we see the battery technologies coming into our vehicles, not just for Tata Motor or JLR, but probably for the rest of the world, we know that we're trying to make a difference, not only to what we do not only to ensure that we're going to have surplus money to invest back into the business, which is going to get more and more employment, but because we become a force for good. This story in Tata Motors, about net-zero circularity or circle economy, the RE-100 story or science has at the heart of it, the equity question. It's not about quality, it's about fairness and transparency. Ladies and gentlemen, in 2022, India experienced extreme weather events. Almost at the time when Pakistan, our neighbor, and 75% of Pakistan, 50% to 75% of Pakistan was under floods. Almost 3 days later, Bangalore was full. Before you knew, hundreds of Rhinoceros, the 100 Rhinoceros in Kaziranga were getting swept away by the [ currency ] of the Brahmaputra. Almost simultaneously, we are a heat wave in some part of the country. And these are not isolated events. This was isolated at some point of time. But post the Rio Summit in 1992, the scientists and the opinion makers and the policymakers across the world concluded that there is method in this badness. But the Amazon gets on fire, it's no more -- it's no more a problem for that country. When you have a similar problem happening in Australia, it's not a problem for Australia to solve. And therefore, I would like to limit by saying that when climate events happen, something in the Northern Hemisphere somewhere closer to America. You find coral bleaching happening somewhere in Australia. All of us know where down under is and where America is. Why do this happen? And I'll point you out, I'll point to you an excellent film, which you must see by David Attenborough. It's a must-see for each one of you to recognize what are these connections about the 9 planetary boundaries. And the name of the film is Breaking Boundaries. Please see it at your time. So if this happened in India, and I would also like to tell you that there is not a single country in the world, which is not vulnerable to what's happening because of climate. But again, let me hasten to add sustainability is not only about climate. If you look at the 16 plus 1 SDG principles, we will very quickly come to the conclusion that the first SDG principle is about first and second is about no hunger and no poverty. The 13th one is about climate science. But why is the whole world talking about the 13th one before we talk about first and second. It's because the 13th one, the climate issue is something that has its immediate effect on all the SDGs together. So whether you're talking about life on land, live underwater. It's about sustainable businesses, sustainable cities. All these come to not, if you don't get the climate sorted. To put this in context, I'm going to play for you something. Can you play the video? What this makes a case of what happens if you don't. Can you? [Presentation]

So a question normally asked is what causes this? And I would probably hasten to say that one of the greatest discoveries of this century has been the causal relationship between the 2 graphs. What you see on the left-hand side, to my left, okay, the first one -- is that over the past millions of years, we have taken a small snapshot. The temperature of the earth never went about a particular value. The average temperature of the earth is approximately 13.9 degrees. And for these million years, there were temperatures when it went down, but it never went up. But something strange happened in the past 150 years. Please see what's happening between 1850 to 2000. For those who are in the room, I'm talking about this portion. Suddenly, for the first time, with all the measurements indicated that the temperature of the earth started rising. Almost simultaneously scientists observed something else happening, and that was they found that between the same period the carbon dioxide content in the earth atmosphere started going up. These were 2 isolated events. After several generations of computers were invented. And after running millions of models across the world, collaboration with scientists across the world, including the policymakers from all over, a simple causal relationship between the 2, the carbon dioxide content and temperature was established. And it was very clearly known that fossil fuel burning and coal burning, which is the cause of all our satisfaction happiness and comfort was the root cause of what's happening. The industrial revolution has changed the earth like never before. The Earth has experience in mainly in his 4 billion year old history, several cataclysmic events on a constant basis. But it was the first time that we had entered the Anthropocene when human kind had begun to influence the Earth's climate. Having understood this, the question was how do you resolve this? And it was pretty clear that industries across the world, whether it was grazing animals, whether it is cement industries, steel industries, automobile exhaust or any of these or even running factories who are contributing constantly to climate change. Ladies and gentlemen, when you read the book, when you eat your food, when you fill diesel or petrol in your car, when you do any activity, whether it's man, animal or plant, carbon is getting converted to carbon dioxide. And when this cycle of carbon dioxide in oxygen is getting disturbed, this is a result. Close to home, our Chairman understood that if a company and a corporation and a group has to be sustainable in the next few years. There is no other way than to embrace the fact of the reality of climate change. A few years ago, he set out on this journey of making sustainability at the front and center of the Tata Group's ambition. And we had a project called Aalingana in which all of us participated to define what does a corporation like Tata Motors need to do? What does a corporation like Tata Steel need to do? What does Tata Chemicals need to do? What does the aviation industry need to do to respond to the climate crisis. This project was called Aalingana. But I would also again hasten to add sustainability is not about planted resilience only. It's also about community resilience and it's also about governance resilience. But today, I'm going to only focus on the planet resilience of it. What we achieved in Tata Motors in the past few months, in the past 2 years is a spectacular change. We didn't know what we had to do in the beginning in those days when we started understanding. What is the sustainability with a fundamental question. Till after several conversations in the ExCom, several debates internally, trying to understand and inventorize our data, we came to some very interesting reality. That as a member of the group, we were contributing to a large portion of the carbon footprint. As a steel industry, we are contributing to a large pushing but by no means we are the only contributors. And therefore, we picked up a few areas of work which was based on something called the Greenhouse Gas Emission Protocol. And when we investigated this question we realized that we are not talking generally, but we are talking science. And we just realized of all the amount of computations that happen in the world today, climate science, uses the maximum amount of computing power. And we realize that unless you base it on science, there's no way to go. For those of you in this room who are familiar with Scope 1, Scope 2 and Scope 3 emissions, I will limit it to say there's something that you use, you create -- and when we are talking about emissions, we are not talking about any other gas other than carbon dioxide. So when you see the exhaust fumes of our vehicle, there are other gases like nitro oxide and sulfur dioxide and particulate matter. We're not talking about that. When we talk about emissions in climate science, we are purely talking about carbon dioxide emissions, right? We realize that our footprint is so large that we had to take action. And many of those things that you're probably hearing since the past couple of hours and what you must have been reading in the newspapers and following us as a company. And this transition to electric vehicles, hydrogen vehicles, hydrogen ICE vehicles is all a way to reduce our CO2 footprint. And mind you ladies and gentlemen, when you use a car, which is electric or you use a hydrogen vehicle, which is based on hydrogen ICE or otherwise or you use some of these sustainable fuels, you are actually moving the pendulum towards making transportation sustainable. What did we do? And when we examined this, we came to the conclusion that there's a science to this. So if you look at the science-based targets initiative website, you will be very happy to know, ladies and gentlemen, that Tata Motors has committed ourselves to something called the science-based target initiative. But when I talked about Scope 1 and Scope 2 emissions, it's also -- we sit in this comfortable place the AC temperature may be high or low, but we are all very comfortable all being run on electricity, but we all need to recognize that when electricity is giving you no pollution in this room, somewhere else, coal is getting burned, and that is why we are comfortable here. And that emissions which is created by burning of coal or oil or otherwise, is directly attributed to you. If your suppliers as per this protocol, if you're suppliers, including Tier 1, 2, 3, these are all called embodied emissions. They all generate emissions in their actions. That's accounted under us. Our channel partners who are selling our vehicles and their suppliers, that's accounted under us. If you see the vehicles that we run for our employee transport, the carbon dioxide generated is accounted under us. What has this science-based target is done? It has propelled us to make a difference by committing to it. And you would see, on the right-hand side, the Tata Motors in the PV space has committed to be Net-Zero by 2040 and in the CV space by 2045. So if you see that our footprint of our vehicles today is 100% ICE vehicles, if I may to say, maybe 90%, 95%. By the year of '45, that footprint has to become 0, which means in 22 years, we have to see -- we should see a glide path, which brings approximately a 5% change in our footprint every year. That's the challenge in front of us. And therefore, I'll just play a video for you about what we committed at the Auto Expo, please. [Presentation]

So ladies and gentlemen, there is not a single product. There's not a single product line, which is not undergoing change. In the past few months, we have sorted the product plan. We know what to do. We have set together a cascade of products when it has to come. We know what we need to do in each of these spaces. We know the technologies that we need to pick. In the video that you saw a little while ago from the World Economic Forum, you found and we all find that the climate change transition affects the poor and the marginalized the maximum. And therefore, as leaders in this space, the selection of the right technologies to ensure this transition becomes absolutely paramount. Getting it wrong means, compromising those poor marginalized and small entrepreneurs who are going to be at the front and center of this transition. And therefore, it's great news when you would want to know from us that we have got our product plans sorted. We have done something further. We have ensured that with the product plan, I'm talking about across PV, CV and EV for the next several years. We have almost come to the end of our strategy related to the renewable energy strategy for all our operations. But I'm also as the CSO of the company, I'm a little mindful that my boundary is no more Tata Motors. So we can't rest until we find that all our suppliers, including beyond the Tier 1s have gone to renewable energy. We can't rest unless we realize that all our channel partners have more to renewable energy and friends in India. And India is one of those rare countries very well endowed with sunlight. Many places where the wind energy is great. This is one of the few places in the world where the electricity footprint, the cost of electricity through renewable energy is absolutely the lowest. We are all mindful of the fact that we import a lot of crude and there's a lot of foreign exchange that goes to those countries from where we pick crude. The days are not far away from many of the young people who are in this room to see that India could harness renewable energy, and that's precisely aligned to the government of India's vision of 500 gigawatts of electricity by the year 2030. The days are not far away that we become a net-exporter of either hydrogen or energy in various forms. The good news is that not just putting rooftops but getting electricity from open access from different parts of the country is real. But the story is not that the story of renewable electricity in Tata Motors is one of great cost advantage. And if that's the case for us, why should the suppliers and the channel partners and their peers not gain from our experience? And that's precisely Shailesh and Girish have been constantly telling me to reach out not just the channel partners but including their own customers to electrify as much as is possible. But the story, again, in Tata Motors is not about solar panels or wind energy, ladies and gentlemen. The success of our products is actually the success of a new way of working. It's about collaboration. It's no more about competition. It's about coming together of the different members of the Tata Group to create nodes of relationships so that we become successful together. Competition gives way to collaboration. And one of the principal success stories that we have brought to the table and which can become a role model for many a company to follow is how do you collaborate on common interest to make this planet a better place. You must have heard of Mr. Tata's constant refrain that if we don't do enough for the planet, we won't be there. And this was said by him a couple of years ago, and we have stayed on this trajectory. I now go on beyond the climate question to the question related to recyclability that we just discussed a little while ago. Recyclability is one of the elements of the circular economy. But if we were to go back thinking that circular economy is all about only recyclability, I would like to bring to your attention that, yes, I'll get to the other part. But before I go there, I want to tell you that all our operations will be water-neutral because what is water-neutral? Suppose we take 100 liters of water inside the company. I need to get back to the earth 100 liters or a little bit more than that. And I'm very proud to say that we are putting in place a plan that by 2030, all our plants, I'm talking about Tata Motors plants, and we carry this message to the suppliers will be water-neutral. That mean we give more water back to earth than we consume from that. Simultaneously, all the waste that we generated will never go to a landfill. That's the target we are saying, and I'm very happy to report to all of you that we have a plan in place, which will get sorted. Circular economy is not about only recycling. Recycling is a very important element of this. And we are very mindful that circular economy presents to us so many opportunities that we -- that's difficult to fathom today. If I were to bring to your attention, materials is one part of it. The energy is the other part of it. But we heard of Mobility as a Service. We heard our Component as a Service. We talk about changing business models. We talked about utilization improvement. We are talking about how do you design vehicles to get more and more utilization. This story is all about that. So that's more circle economy. So we have got this sorted also. We're getting this ordered in Tata Motors as far as the framework is concerned. And Girish referenced respect with -- recycling with respect, one of the first facilities in India, and we're getting many more of them in the material space. Many of you should recognize in the fullness of time, the products that we sell, which associate us with Tata Motors may change to what we may become would be very different from what we do today. Watch the space and have faith in Tata Motors that we are wanting to lead this change. Ladies and gentlemen, this is the place to be. I also want to tell you, I had an opportunity to attend the Climate Cop, but we have a similar cop which happens across in the biodiversity space. And this also was discussed in the Earth Summit in 1992. There are a lot of commitments that we are picking up on this, again, part of the Aalingana commitment. And what are we doing in this space? We're planning to conserve how habitats around our operating sites, and I'm going to show you in the next video just a minute. What is the state of our lake house in Pune and we have got similar land masses and water bodies in most of our plants. This was done by the erstwhile Chairman, Mr. Moolgaokar and many years ago when Mr. JRD was there and Mr. Tata continued to propel its improvement. But we recognize that we need to do much, much more than just preserve it. I'll show you what it is. We are going to commit in that space to concept call [indiscernible], which is actually part of the Kunming-Montreal Biodiversity Framework. But the most important thing is that in Tata Motors, we have to align to science and map out our biodiversity footprint, not within Tata Motors that's not sufficient. We can just discussed. There is no more about Tata Motors. It's about our suppliers and our channel partners. And we are very mindful that unlike carbon, the biodiversity footprint of Tata Motors is actually in its value chains. There's an exhaustive exercise. But the good thing about it is there is signs that leads to us. Then in a few years -- a few months from now, you would also notice that we are going to pick up some flagship projects for nature-based conservation, which is all far beyond the value chain. So what is the space? So can you play the video of the site -- one of the sites that we have in Tata Motors. [Presentation]

So this is our legacy and it's for all of us to preserve this. And when you have faith in Tata Motors, you preserve this and many like this. The reason we are going to actually take this to the next level. Is because we want to be role models for many who want to see what needs to be done in this space. I want to end by only bringing at one point to your attention. This transition is hard. It is one of the hardest transition that human kind can manage. If that's the case for human kind, it can be hard for Tata Motors. It's going to affect each one of us in this room in some form or the other. It's going to hit the poor and the vulnerable, the hardest. And therefore the choices that we make or the lack of choices that we probably pick up are going to hold people -- the generations to come are going to hold each one of us accountable in some way or the other. So I keep telling my colleagues in finance. So when you have to sign a check, please find it. Because what you're doing is you're actually helping me and helping each one of us to preserve this planet and this company for the future generation. Ladies and gentlemen, I want to tell you that we have got running off time. We got all our in the past 1 year, we got our metrics in place. As Balaji said, these are baby steps, we are on the journey. We've got our metrics in place, a large number of fund beyond planet to social and government. You've got a reporting relationship to the Board for asking us to embark on this journey -- congratulating us in some form. Our rankings from the S&P Global jumped like never before. We moved CDP by 2 points to put 2 levels in 1 year, and we hope to take a leadership position in a couple of years. Last but not the least, I want to tell you, I started by telling you that this is a company on the move. As leaders in the automobile space in India, our job does not stop by doing something that helps our cost to be able to preserve our company for the future. But to be a role model and lead by example. As I told you through my conversation, we have sorted the Net-Zero question. We have decided what we need to do with our operations. We've committed to science-based targets for climate and science and nature. You sorted the water neutrality, zero waste to landfill and the circularity pillars. This space is going to be very interesting for each one of you in this room and everybody who is not. Ladies and gentlemen, I just want to end by saying that the time to act is now. Let's decide, to decide. Can you please play the Tata Group's video before? Thank you very much. [Presentation]

Many thanks, sir, for that very impactful presentation. We now move on to the next and final speaker session on finance. May I please request Mr. PB Balaji, CFO of Tata Motors Group, to talk to us about our financial imperatives, the various corporate actions taken to simplify and synergize the business and the financial outlook for the future.

So as we come to the close of this, let me probably take about 5 slides to just walk you through how does it all come together. As you realized, we have been getting back in shape after a tough few years. Girish talked about the journey on CV, Shailesh talked about the journey on PV, and of course, the overall domestic business is now starting to come together from a cash flow perspective as well. Our medium-term goals, which we have shared earlier, they are well defined. So there's no confusion on that front. On the commercial vehicle side, we will want to see a strong double-digit EBITDA. We'll spend about INR 2,500 crores of CapEx on a yearly basis broadly. And then on that basis, have a very strong free cash flow generation. On the passenger vehicle side, I think double-digit EBITDA is something that we really want to get to. And the annual CapEx is likely to be close to about INR 3,000-odd crores. And of course, this will have to be, again, a positive FCF business, which Shailesh reconfirmed as well. The electric business is where we are wanting to win proactively. And therefore, this is a business where we want to get to positive EBITDA soon and at the same time, also move into a breakeven FCF pretty soon as well. And therefore, this business, we have a plan to spend almost about $2 billion of CapEx by FY '27. And that is something which you would want to -- that's already been funded from the TPG investment to some extent and the rest would be internal generations as well. And these investments are close to about INR 8,000 crores. This is something which has been ramping up. And we are investing to ensure that we are getting future-ready, managing the transition that Kutty just talked about, as well as winning in the marketplace. And therefore, more than 50% of the spend will go straight towards green technologies. And at the same time, we will remain financially prudent and this business will get to a net debt 0 position sooner rather than later FY '24. This business will almost be there. And the following year, it will definitely want to get to net cash. At the same time, this approach is being well received by the rating agencies. We have seen an upgrade coming through from CRISIL as well as from S&P. And of course, outlook changes are also coming through, and we intend to keep driving this hard as the business performance picks up as well. And in parallel, there's a slew of corporate actions that have been lined up to simplify the business, to synergize the business, and to drive scale. So the first one, we talked about the TPG Rise investment. They're also a voluntary delisting of the ADS shares, which we believe at this point in time, it's outlooked its purpose, and therefore, we want to simplify the business. We'll find the DRHP for the Tata Technologies IPO, which will also help us divest some of our noncore investments and generate further cash in the business. And of course, we will invest at the right places and the right kind of spend, the Sanand facility of [ Ford ] was a case in point. So where do we -- where does it all leave us? As I finish the session and open it up for Q&A, I would like to leave these with you. I think what you should take away from this session is that as a team, we have a tough cut out. and we are executing it with rigor. We know exactly what we need to do, and that's what we would want to continue driving. What is also clear is that our well-differentiated strategies and here I'd include JLR as well, is starting to yield results. And that is something that we will stay very, very close to. We don't intend to change that. We will be focused on driving customer-centric innovation through service -- as well as service and digitalization of the business in its entirety. And we will integrate sustainability into our business strategy, not just to treat it as a compliance matter, but actually to seize the opportunity that it presents. And of course, we will want to -- we will aim for execution excellence in everything that we do, so that we deliver our growth as well as financial targets consistently. I think the operative word is consistency. And that is what you should expect us to keep hammering away. So do expect a little bit of repetition, lots of repetition and a fair amount of boredom in the way we would want to keep messaging the same thing again and again. But I think the way we will execute will be interesting. But what we'll be executing is going to be the same. Yes. So with this, I think we are -- Sneha, start with Q&A. Yes, over to you.

Thank you, sir, for the very crisp and engaging session. We'll now take a quick tea break, and we shall reconvene in 15 minutes when we'll have the Q&A session with the senior leadership team. Thank you.

Mr. Ravindra Kumar GP, Mr. Thomas Flack, Mr. PB Balaji, Mr. Rajendra Petkar, and Mr. Kutty to please come on stage. [Operator Instructions] Yes, Kapil. Please introduce yourself.

I'm Kapil from Nomura. My question is to Thomas. I wanted to understand on the battery cells, what do you think is the source of competitive advantage when you look at yourself compared to global competition and market leaders that we have today, will it be scale? Will it be technology? And the other part that you can probably give us some color on is, right now, we don't see these companies making very high margins, right? So how do you see profitability in this business?

I think that was 4 or 5 questions. No, it's okay. I mean I'm going to try to remember your question. So scale was in there. You have to make something depending on the cell, you have to make something that's a very high volume. 10 gigawatt will be like a thumb rule, but it's not exact. So if you could say I'm at least 10 gigawatt, I'm in the beginning of competitive scale as an offering, so I can keep my pricing there. Inside of a 10 gigawatt plant, you'd have multiple lines they use common systems. And so the overhead, the operating cost of running that facility is somewhat lower and even bigger version of that up to maybe 50 gigawatt would be another sort of a little bit better again, depending on the cell. Cell technology, we have arranged to have and bring to India as part of our global portfolio, not just a range of technologies, but through our relationships with Girish and Shailesh and teams, the intent is to be able to really create some novel solutions between the cell and the pack. So the pack remains somewhere between 20% and 40% of the vehicle's battery cost. So that's a gap that we need to -- an area we need to work on actually as part of the relationship. So our biggest advantage in the Tata Group is, in fact, Girish and Shailesh and their ability to bring what I'll call traditional automotive engineering back into the value chain of how the power is delivered into the vehicle. Did I get them all?

So what I'm trying to understand is when you compare your business or sales and you're going and selling it to Tata Motors, how would you -- how would Tata Motors look at it that -- what is the advantage of sourcing it from you instead of sourcing it from, let's say, Panasonic or LGKM or somebody else?

Well, first of all, the whole point of this is to geopolitically derisk us from outside fluctuation of currency fluctuation of any type of outside country. Second is to make it very affordable and make India a great place to make batteries, which means building the ecosystem under it. So we're not expecting to make batteries and charge credit premium to get the same battery that you could get from China. The point is to beat them. Is that clear?

Yes. And on second part was on profitability in this business because globally, we are right now not seeing high degree of profitability. Mostly, even the leading players are making EBITDA margins in single digits right now. So any thoughts around there that what kind of profitability would this business have?

Yes. You're referring to fluctuations rather than that's what they make. So I wouldn't take fluctuations as that's what they make. I can go back and show you some very high numbers because they're playing around with material. And in China, there's been a lot of manipulation in the market around material to change market share position. So there's a bit of a war going on. So you're referring to those fluctuations. Most of the battery companies, if you look at over time, make a very healthy EBITDA. So that's been sustained. It's verified and our interest would be to actually make sure that we're between us also material protected in a sense that we both flow with the material so we don't have those kind of games. We certainly wouldn't expect to get away with those kind of games in India or elsewhere outside of China.

Yes. And to Girish, if you can answer, how is Tata Motors derisked in battery sourcing. If you could -- is it only going to be dependent on Agratas or you have plans of derisking as well with other suppliers in these?

See, I think we have a very well-established source selection strategy. And this is obviously a strategic source, right? And we will have our own requirements, for example, obviously, our commercials. But second most important, what I believe is what will bring competitiveness to Tom. And what is the competitor in the storm will pass on to us. And 2 of us together, how will we build competitiveness is through frugal engineering, right? I think this is something which I have seen happens in India. In many cases, many technology adaptations or adoptions. We've been able to do it, which meets Indian requirement and at an Indian cost, right? So this is something which we can build together. But at the same point of time, I think Tom in his presentation also spoke as to what kind of cells he is going to make and then how he is going to increase this width of the portfolio, et cetera. Now we are going to come up with some of our products even before Tom's factory is going to be in place, right? So some of those businesses have already been committed, would have been committed, and we will continue with those commitments. But I think we have a clear strategy and this frugal engineering is something which will bring competitiveness to both of us.

And just to add to what Girish is saying, I'll combine a few questions that went there as well. See, for Tata Motors and JLR, we look at it from a different perspective, what are the choice you have? The requirement that he's setting up, ours will be more than that is you had to look at 60, 70 gigawatt hour kind of capacities to be created. In this point in time, you want that kind of capacities, you have to pay to play, pay the entire CapEx without having a single IP on it. So there's huge cash outflows that will be required if you want to have this kind of ambition. Second, today, the whole conversation on EVs is around cars. That conversation will change very faster availability of batteries. And for you to derisk that, you can't be spending this kind of money on your cars, we don't know if you're going to get that kind of numbers there. And if you're going to pay to play the battery and build your cars, the balance sheet will go into bulls like mad. So that's a huge derisking that Tata Motor has. Flipside for Agratas. Any new battery company who's coming in today purses to find customers. And the issue is not about customer demand. It's about validating those batteries on their cars. And that's a huge risk in terms of ability to get your products validated and going out there. We have sorted that one out. So it's a mutual when you join hands together you can actually reduce risk for both parties. That's a huge step forward for us. Second, you asked about we are not going to be exclusive sourced from Apollo or rather Agratas. Have been with the team for 3 years, I keep calling it Apollo. So there, we will not -- roughly about 70% is all that we'll source from Agratas. The rest 30% is outside. Why? We don't know where the technology will evolve from. As an OEM, I want to derisk myself saying that if supposing Agratas gone in one direction, Something else is amenity. I need to be having my finger and every pit to ensure that what works in the automotive world. Then the question is since we are joined up at the hip, then it becomes very easy for us to do a joint business planning to say that fine. That technology seems to be emerging. Let's test it out on this car. It seems to be performing well. Then it goes back to Girish's point. I can actually do some engineering stuff at my end. Can you then manufacture it for me with scale? So it's an extremely close knit open system.

Yes. On the same table, if you have another question.

It's very insightful. My question was for Thomas or Balaji,, whoever picks that, continuing on a couple's line of questioning, more on the cost side of this investment on the EV battery. So we are committing about $0.6 billion for 20 gigawatt hour capacity. So that translates to about $80 million per gigawatt hour investment, which we will be making that is quite expensive compared to the cost which comes for Chinese companies to set up in China. So we were -- we are starting off at a much more expensive investment plan for good reasons, but definitely, it would be far more expensive to set up here. And the 20 gigawatt of capacity, which we are setting will translate to about 0.5 million vehicles, which wouldn't be at the initial stage would be needed. So possibly a ramp-up would also be gradual, may not be using the entire 20 gigawatt hour capacity and hence possibly the operating costs could also be higher at least in the initial phase. So if you put these 2 things together, the initial investment, which is expensive and operating costs in the initial few years being also expensive, how are we going to compete at these alternatives, which we potentially be having in the market from the Chinese companies?

So I think you said that you said that we're spending $80 million per line or gigawatt hour. I'm not sure how you phrased that. So that's not -- it's not how it works. There are a lot of people that have done that math. So I'll explain this to the room. So if you make the cell I showed you out of chemistry A, it might cost you $100 million a gigawatt hour, but it's good for that application when packed for the vehicle that uses it. Another could be $50 million. Good for that vehicle, packed the way the vehicle needs it. They don't compare. And if they were the same and someone spent more, and you knew they were the same, then the reference is interesting, but you need to very specifically know what is it that they're making on that line. So I hope that helps. So are we buying anything that's more expensive than the Chinese? Absolutely not. Let me make that very clear. And I think that was the root of your question, how would we compete that, right? Because they're apparently making them with cheaper equipment. No. So what someone is doing like an EV, CATL or any one of the competitors that's very promising right now, would be very similar to what we're doing as far as CapEx goes. Okay. So there's -- from our view, the biggest advantage that Chinese have then on pricing, your second question, is because when they went and install the plants that are existing now, they did it under a very big CapEx subsidies. And so in India, there isn't something like -- in fact, in the world, there isn't anything like that outside of China to that extent. So those plants that were under those schemes do have a slight advantage. Now India has much cheaper labor. India has much cheaper energy in most applications. There's very few except the hydroelectric installation by CATL that could compete with what we're going to do in Gujarat. We have much lower construction costs. And so when you add these variables up and you go side by side, we actually can't compete. We need to get all of the supply local. And when you meet that threshold, then it's very clear on paper that there's a way [indiscernible] to be able to offer competitive pricing, not versus their landed cost being bought into India, but versus their local cost. That's the goal.

And Thomas, if I got it correctly, you are saying even the operating cost would be competitive compared to what, say, CATL on any of those would be having. Because my understanding is that scale is one of the key driver for cost in cell manufacturing. And we would be starting off at a much smaller scale compared to where the CATL or some of the larger ones would be by that time.

Yes, there are breakpoints in scale. As soon as you get to honestly about 40 gigawatt, we're okay. Yes. And the amount isn't what people told you. There's been some advertisements around the idea that scale...

Balaji, if I could just have one clarification from you. So in the financials, which we have given for the EV business, that is excluding PLI benefit. If the PLI benefit comes as on today, so the EV business becomes profitable, without any change in pricing?

Absolutely. Let's do the numbers, yes. If my memory is certain, about minus 4.6% was the EBITDA that we showed, -- in that almost minus 400 bps is just engineering costs, which have been -- what should have been -- will get capitalized in the future has got expensed because the car is still being -- it's not clear the right gateways for us to capitalize it. The PLI benefit is anywhere between 13% to 18%, depending on the revenues that you have. And given the volume projections that we are running after the revenues, we will hit more the 18 than the 13, most likely. So therefore, that you should take care of everything there. But intention for us is to keep that aside. This business to go to EBITDA neutral and the FCF-positive independent of that. PLI comes on top of that, which we used to compete because some of it, we can give it away in the price of the car, drive up penetration, give higher range and ensure they get put more features into it. So we would want to use the PLI to drive up the disruption of this marketplace lead it harder.

Great. So when you say the target for EV business is EBITDA positive, it's including PLI or excluding PLI, you're targeting?

Aside from that, PLI comes and sits on top of it, how we spend it, we will decide. The underlying business is what I'm talking about.

Do we have any more hands in the audience? Yes. Can we go back to center?

Ramesh Bhojwani from Meta and [indiscernible]. First and foremost, your presentation in the Tata Motors Day is simply excellent. It has encompassed almost all aspects and every aspect of the Tata Motors business right from the beginning, that is 75 years of completion. So many congratulations to the entire team existing as well as people in the past. Sir, 3 things came to my mind. One, you are now the future of mobility according to you is the EV. So what percentile EV business will take market share in the passenger vehicle total Indian market? And what will be its share in your total sales? You are targeting 1 million vehicles after acquiring the fourth plant.

Okay. So from a PV perspective, I think what do we do see is this business will be at least a 25% to 30% penetration of our portfolio. And how the market will evolve is anybody's guess. From our perspective, we will want to be a significant share. We want to be the market share leading player in this country. And for which our strategy Shailesh talked about it. We need to get 10 cars out there by '25, '26, that should be there. And of course, there's another one that he's thinking about, which is not yet shown, but that is something which we would want to use then the whole battery ecosystem, the back end that needs to be tied up front-end charging infra. That's how we want to win this game, which we talked about eloquently. So we see a 25% to 30% kind of penetration in our portfolio.

Excellent, sir. Second question was, there is a huge debt on the balance sheet. One, at the results of March '23, you are very comfortable in surfacing it. But I think the best of automobile industry ending March '23 is past. Now we are facing a situation where vendors -- many vendors are reporting 45 days inventory. How are you seeing this scenario playing out going forward in the current year and how we will take care of the debt on the balance sheet?

So debt on the balance sheet, in domestic Tata Motors is about INR 6,000 crores, -- and that net automotive debt. And that is something which we are comfortable to first, not just service it or take it out. We will want to take it to 0 in any case. So as the year-end is coming in, it will be as close to 0 as possible. That is what we originally committed. And therefore, servicing this debt is not an issue. And clearly, we will want to see the interest costs start going down. And the direction is clear, reduce interest cost, pay a dividend, which we replace the guide to whom we are giving the money. That's a simple philosophy that you want to work. And I think we are on track for that particular plan. And as far as inventory and the dealers are concerned, be it -- I'll get Girish talk about the CV side, PV side, inventory is well under control, and we have -- he showed the number of dealers are profitable return on sales of 2%. All that comes because the inventory levels are kept very tight at the dealer end, and there are norms. And in the norms exceeds we will cut back. We are not running this business for wholesale market share, which we have been explicit about. Only thing that matters to us is Vahan market share. So dealer inventory is actually -- is more dealer inventory builds up, you'll end up reducing profitably to the dealers, incentives to actually go and sell in the market goes down. You will end up discounting. Therefore, we don't want that. Focus is Vahan market share. Girish, I think you can elaborate.

No, I'll just add. I'm currently short of vehicles at the dealership.

Fantastic. This is very well said. Thank you and all the best.

Chandramouli from Goldman Sachs again. So just a couple of questions. First one is on the falling battery raw material prices. So over the past 6 months, we've seen a correction in lithium prices, nickel, cobalt, manganese. So just trying to understand, as Tata Motors in your domestic EV businesses, are you beginning to see some of these benefits flow through? Because I think on the ICE business, it's typically sort of a 3-month lag between spot and accounting. Have you started seeing your battery pack costs go lower? And is there a rule of thumb, similar rule of thumb, 3 months, 6 months in terms of lag between spot price of raw materials and the battery costs that you will account for?

That's my answer from my old job. So the answer is that the relationship with the sourced partners is mixed. Most of it is now indexed. And so as the materials move, the prices of the batteries also move and the battery packs also move. So the TML, if the prices go down, we'll benefit from that. But the ones that are not specifically indexed, there's a negotiation that tends to pull it down just slightly lagging behind the market movement. So TML will most assuredly go after that opportunity and deliver it. either automatically or through negotiations.

Got it. And my second question is just around the Cummins relationship with the JV that Girish spoke about earlier today. So if you could just contrast historically, what was the kind of financial relationships you had for the technology that you were taking from Cummins? Was it sort of a per-vehicle basis? Or was it a licensing kind of agreement? And in this JV for alternate powertrains of the future, how is the agreement likely to be on the financial side? Will it be a per vehicle arrangement? Or will it be sort of a fixed cost licensing kind of arrangement? Is there any shared CapEx that's going into this? Or is it all Cummins CapEx and then the sort of license it out to you?

So see, the JV that we have formed is a step down of the current JV, right? So the current JV will remain and then that JV will have a step-down JV or is already formed, right? And that will get into engineering, manufacturing, sales and service of alternate powertrain, right? Now in terms of the financial arrangement, therefore, it will remain as it is in the parent JV, which is 50-50. That is the financial arrangement. In terms of tech fee and royalty, so this is something that is paid by the JV, right? So any investment which is done is paid by the JV and then it gets amortized over the volume. And that is how we will continue in the new JV also.

Do we have any raised hands? Yes, at the back.

Thank you, sir, for the opportunity. Raghu here from Nuvama. Sir, firstly, to Girish -- 40% kind of a growth, how do you see that over corporate, school and STUs? And within STUs, the scrappage policy impact, is that starting to play out? Because possibly over 15-year old buses with STU could be about 40,000 buses. So something like that, is it starting to play out? That is one. Secondly, to Balaji, sir. On the net automotive debt at consol level, given that positive FCF in India, positive FCF of [ 2 billion ] per annum at JLR and divestments, would there be upside risk to what you are expecting for March '25?

So I think speaking about the bus industry, see, there are 2 parts to the bus industry. One is the government demand, right? And then second is the private demand. Now if you consider the entire industry right from, say, 18 seater bus to 54 seater bus, then generally, this government, which is STU, state transport undertaking demand will be around roughly 25%, right? We expect that demand should come back this year. Unless there is a pressure on the STUs to go only for 0 emission vehicles. And the other things that I spoke, payment security mechanism, et cetera, don't get resolved, then there could be a problem. But we already see in the first 2 months of this financial year, already 3 states have come up with their tenders on IC engine buses. So I see that business coming back. In the private business, the demand has already come back from Q4 of last year, right? See a large part of the bus business happens in Q4 and Q1 because of schools, employee transportation, et cetera, and school actually forms a large part of demand, right? So last year, the bus industry has grown pretty well. This year also, while the projection at the beginning of the year was that it will grow maybe 9%, 10%. At least the first quarter seems to be better, right? We will have to see how the things pan out as we go ahead. But hopefully, I think the bus business, even this year should do well for us because we have a good pipeline of electric business anyway. And by value, it's quite significant. So we do see the bus business separately growing pretty well this year. Balaji?

So on the net automotive debt console level broadly split up we had about $3-odd billion in JLR. We had about $1 billion in Singapore, and we had about broadly about INR 6,000-odd crores here. So INR 40,000, INR 42,000 crores is what we had. As we -- in the current financial year, JLR has guided for a $1 billion kind of [indiscernible] kind of a debt position. Singapore will probably remain that way because nothing further is going to happen there. And domestic would come as close to 0 as is possible. So I don't think we have an upside to this number, which is a pretty aggressive number that we are going after. So therefore, we will be more net cash in FY '25 rather than net 0 in FY '24. We are disappointed with that because that's something that we could have tracked it, had the semiconductor issue being easier on us, but that is where we are. But the journey you should be able to see progress towards that is not a hockey stick effect, you should be able to see material movement in the numbers as the quarters go by.

Just one follow-up to Girish sir. In terms of utilization level, at what kind of utilization you would start seeing further reduction in discounts for the industry? And currently approximately what would be the utilization in MHCV and LCV?

So I was speaking with some of you during the break. Generally, the freight rates reached their peak in March, right? And maybe October or November, depending upon when is the Diwali, right? So 1 month before Diwali, the freight rates reach a peak and so in March. So I was looking at the data yesterday, the freight rates in May are actually higher than March. At least in the last few years, I have not seen that happening. So that's a good sign. I think the utilization seems to be at a good level. Whatever I've been watching it is somewhere around 60, 65, which is a good utilization level, right? And I think, therefore, this should lead to fresh demand, but we also track something called as a transporter confidence index, right? I also keep on updating our debt every quarter. So the tipper is at a very good level and increasing. MHCV cargo is flat. I don't see any reason to worry. But ILCV is a bit subdued. Last 2 quarters, it has been subdued, and you can see in the demand also. And same is the case in small vehicles. The small vehicles is [indiscernible] below.

So this is Pramod from InCred. So this is to Girish. Considering that if I had to look at 10, 15 years of CV industry market share, -- it's been a consistent slide. And every 3 years, you try to attempt and recover. I think the best shot you had was BS-VI when you had the right technology partners to try that. Now with the focus shifting to the profitability. Don't you think it will be a much difficult task or you put to rest the market share ambitions? One. Second might be 3 years down the line, what should be your market share ambitions on the CV front?

So Pramod, I think, first of all, a correction, and I showed it in my presentation. Actually, in MHCV, from 2017 to '22, we grew market share every year, right? This is a specific strategic decision shift that we took. And having gone through this journey for now last 7, 8 months. And you would have seen in my presentation, I think this is not so much only about discount pullback but actually about improving the value proposition for the customer. And as a result, therefore, I'm actually getting more confidence because we have been improving our product portfolio, our service offerings and sales even more because we want to get realization. And therefore, we should be getting the growth back and the goal that we have set for ourselves is growth with profitability, which I see happening this year.

This is Ashwani from 3P Investments. My question to Mr. Wagh and Mr. Balaji. You've talked about domestic market. Can you shed some light on exports? What is the export strategy and because now the products are doing pretty well in India? What are the markets which you target with what kind of products?

So let me talk about the commercial vehicle international business. I think post-COVID, we have not seen the recovery, right? So the markets -- if you see the markets that we are present in, SAARC, biggest one, than Middle East, North Africa and sub-Saharan Africa. I think these markets, different countries, if you see, have actually tanked by 18% to 70%. Some of the markets have actually tanked more than India. And they have not come back and pre-COVID almost 55% of our volume used to be in Bangladesh, Nepal, Srilanka. And these countries, all 3 countries are still struggling on economic trend. I think we have, but been able to grow our volumes in Sub-Saharan Africa, right, to some extent. So the loss that we had in these countries has been recovered to some extent in Sub-Saharan Africa. I expect Middle East to do very well because there's a lot of investment which is happening in Middle East, right? And so that's one growth market that we are looking for. And I would also look at ASEAN, right? With some of the new products that we have, we are also appointing new distributors in ASEAN. So I also look forward to ASEAN. But there's another interesting thing which is coming up is with electrification, earlier regulations or difference in regulations used to be a big hurdle to get into a particular market, right? At times, it used to be higher than us, or at times, it used to be so lower than us that you can't take the existing product there. Electric vehicles are actually taking out the emission regulation hurdle completely. What remains is only the vehicle level regulations, which are, to a great extent, harmonized. And therefore, with electric vehicles coming in and some of the anchor customers that we are talking in India, they are global, they are actually started discussing with us of our electric products in those countries also. Take example of Amazon, right? We are supplying the ACV to them. And looking at the performance of ACV here, we are quite positive about taking it to some of the other markets, or you take electric buses, for example, there are quite a few countries including Nepal, some countries in Sub-Saharan Africa, who want to actually pilot GCC model, owned operate, maintain model, some of the local banks and entrepreneurs are coming forward. So there is a good demand, which is also coming up for electric vehicles in these countries. And as far as electrification is concerned, I think it is China, obviously, which has taken the lead, but in India, some of the companies have also started coming forward and appears to be a good opportunity for us to tap some of those markets.

Mr. Balaji, this electrification basically and the new ecosystem being set up, you have a very large scale in purchase as far as the ICE components are concerned, you are a very dominant player in terms of size of components with a large number of very high-quality suppliers? How do you see that ecosystem building up because what you can do inside the factory and what you can procure from outside at a very competitive price will, in future, determine your cost structure besides the product performance, et cetera, particularly in the passenger vehicles business -- electric passenger vehicles business. So can you shed some light on this?

See, the main one is the batteries, which you just Thomas explained extensively. So we are having a very clear pathway as per the -- to actually get the ahead of the phase manufacturing plan. But that is an important one for us to get the same incentive, it is important to get the PLI incentives, important to reduce overall cost synergy, which Shailesh talked about. It's both incentives as well as cost synergies that you get, and you save on customs duty, reduce logistics costs, reduce inventory levels, everything coming in there. And secondly, we want to be a scale player in the EV business, both in PV as well as CV. In that situation, we will want to have components localized here. And there's a lot of -- and one of the things that TPG Rise climate investment has actually helped us also is that, there's now a serious play. There's no more we alone saying, and there are others who are backing up our promise with monies. So that's also giving a lot of conviction to the vendors to actually come in and localize here. And the third part is China Plus 1 is now a global strategy, supply chain shifting out. It's a global strategy. Most OEMs want out. And India is a very natural place that people want to come and set. In fact, we have a very vibrant ecosystem there. Not as what China is today. But definitely, as a Plus 1 is an extremely relevant group to do it, especially such a large domestic consumption base. So I think all the vectors are aligning in terms of localizing these. And the good part of the way the government also put out a PMP case manufacturing plan is by component, not by percentages. So motor capacitor of this nature will get locally. That is what they are saying, which means everybody localizes the right thing on the same thing. That means you're not wasting capital localizing randomly. If I do something, somebody gives something it's a waste of capital for the country. since everybody is -- the right sequence is being done, I believe the time is right for a lot of localization over the next 2, 3 years to happen.

And how much can you achieve in terms of cost reduction on the commercial vehicles front because that is a very important part? On the pricing front, you have taken a lot of actions, as you said, reducing the discounts. But how can you improve on productivity, cost of production lower there because that is an important profitable piece of the company.

Absolutely. And I think we have been consistently working on cost reduction over the past few years, right, on both commercial as well as value engineering. But at the same time, we've also been taking lead in terms of introducing new aggregates, introducing new features, right? So as to take the industry level up. And we have seen that when we introduce some of these new features or aggregates the cost structure gets skewed a bit. And then again, we start working on those and we are able to bring it down. So if you ask me, do we have scope to improve on the material margin Yes. That's a clear focus area, continues to be a focus area for us to improve the material margin. The second thing also is an area where we want to improve is our entire fixed cost base, right? And some of those things I spoke in the presentation that we are also looking at what we should be doing in-house, what we should be completely outsourcing. We're trying to go on reducing our work content and what all we have been doing in-house. And I think one of your -- you asked me that you continue to do axle in-house. That's also linked to your earlier question as to what you will do in-house in electric vehicles. So e-axle actually becomes a very important aggregate, we want to do it in-house. So we have this strategy laid out. As far as cost structure is concerned, we want to work on improving material margin. We also want to reduce our fixed cost, and we also want to improve our capital efficiency.

This is Sonal Gupta from HSBC Asset Management. Just again, a couple of questions on the EV side. So maybe I'll just start on the PV. So we're increasing our capacity and we now have a dedicated facility as well for the EV. So I mean just I know Girish -- sorry, Shailesh touched upon it, that we're going from 70% localization to 85% at Tier 1 level. But again, could you talk about like what exactly are we going to do also in terms of the $2 billion of CapEx spend, how much is product development, how much should be related to maybe some other aggregates or localization? And broadly, the other overarching question in the PV spaces, essentially as you go from, say, roughly 5,000 monthly volume last year to, say, in the next 3 years to about say, 3x, 4x of that. What sort of scale efficiency can we gain as we do that?

See, the localization plan as well as ensuring that the scale efficiencies get built in as part of localization is very much what Shailesh covered extensively. And from our perspective, if you look at the CapEx that we are spending on it. On the EV side, it is fair to argue a majority of it will be going towards platforms, technologies and products. The spend -- the capital spend for capacity increase is more or less done and dusted. We don't need more than that. Yes, to want of retooling the factories, et cetera, those will definitely be part of the piece there. But what we lost since their Gen 2 architectures. I just want to correct it, yes, the factories, the new Sanand 2 coming into the EV company, but we'll also be making some of the ICE and Gen 2 will be going in there. It is curve, if curve or arguments like if curve were to go there, curve ICE and EV will get made simultaneous in the same factory. So we'll be told converting -- there'll be 2 way toll conversion. One to -- just to that and that to this, both will be there. As far as the $2 billion CapEx, most of it, as I said earlier, will be going towards products, technologies and platforms because we need to do the Gen 3 platform also has to go in on place. And other part of the $2 billion spend will also go a lot into the electrical electronic architecture. How are you going to ensure that the new infotainment systems are contemporary? What are the customer experience you're going to give in that? That is very much part of the plan there.

So we're looking to localize on these like HMI?

Where possible, where scale is available, we will localize and where possible, where we are not able to do it, then we'll probably have to import, we'll continue that piece. And the big one that is getting localized is the battery that will be there. The other question you asked was scale efficiencies. I think scale builds at all levels because it's also ICE -- a Gen 2 when I grow it's both ICE and EV, both build scale. So if you notice the plan, I think on a fixed cost leverage position, I think this business is very much on message. We're roughly running at about 7%, 8% kind of fixed cost percentage revenue, which I think is competitive. We don't need to do more than that. The main opportunity for us lies in material margins where we believe we are about 300, 400 bps behind the curve, especially if I look at the market leader where they are on towards us, there is a difference there. That's because we have not been in a position to invest in making our architectures more competitive over the period time because we did lack the money for that. Now with the business getting able to stand on its own feet, we will be focusing on that. So there is a clear action plan both on the cost reduction front for material margins as well as capital productivity because just because we're going to spend or INR 5,000-plus crores on PV EV, that doesn't mean that there's no opportunity for capital productivity on that. So how do you actually optimize that CapEx? Those 2 are very clear and critical imperatives for the PV business because we don't want to get carried away. We are getting ready for 1 million. But that doesn't mean that there's a wobble or something goes wrong, that we're going to go back into ill health because you're overinvesting on that. So that balance is something that Shailesh is paramount about, which is why the strategy becomes important. For PV, the strategy is win sustainably. So they will be extremely cautious on the spends that they're doing and EV, the message is to win proactively. So they will want to invest for aspiration, for which the funding has been secured. So mentally, that's how we are thinking about it.

Okay. Great. My second question was on this -- like we've been pioneers in the EV space for the passenger vehicle side. I mean, CV has been a little bit -- as of now, we've launched a CV, but I mean, what is your experience now? How -- I mean how much is the TCO better for the, say, ACV versus? And what are the challenges or customer constraints that you're facing in terms of adoption of EVs on the small commercial levels?

So I think we have been there in buses, first of all. And of course, I think buses is being driven by the government's intent to shift to electrification. So we'll continue our play there. And in fact, we have a very strong modular architecture there now wherein we can have multiple configurations, including if required, say, a double-decker, right? So that's one piece, which we have kind of done. The second one is the small vehicle that you said. So what we've seen is if the vehicle runs, say, 110 kilometers a day, right, with the configuration that we have given, then it earns very good money to the owner as compared to a diesel vehicle. For CNG, it is slightly higher, right? But surprisingly, we are finding that actually the usage is not more than 70 kilometers. And therefore, we are now working on a concept, which can actually break even with respect to 3-wheeler EV, right? I mean they are not comparing with diesel at all. I mean they are fully convinced about electric. They are comparing a breakeven with 3-wheeler EV and something which should happen at 70 kilometers earning per day, which we are working on a concept and we are convinced that, that can also happen. So we believe that buses because of the push from the government and the small commercial vehicles because it makes economic sense, right? And also because of the net 0 commitment of the organized players, especially for their last mile distribution, not just the e-commerce players, but also a lot of FMCG guys, I think all of them want to get into this. So we do expect a lot of penetration happening in the small winter base.

Okay. And just the last question on this. Is there a synergy between the, say, the small commercial LCV, EVs and the PV EVs, I mean, like on aggregate stuff.

Yes. So there will be synergy at times in, say, the cell level. At times, it could be at a battery pack level. At times, it could also be at the motor level. At times, it could be at the power electronics level. So it depends on vehicle to vehicle, but there is a possibility of synergy, which we are exploring fully at the back end.

In the interest of time, maybe we'll take the last question back there?

I think there are 2 hands, I think. So let's take both the questions.

Yes. So my question is on -- to Tom. So any particular reason why you have selected prismatic sale, why not cylindrical or Bosch? And how do you see your cell configuration competing against particularly the 4680, which probably going into manufacturing in the next 1 or 2 years?

I didn't get the last part.

I mean the competitiveness of our sale to [indiscernible] sales, which is coming to the market and, say, now and maybe next 1 or 2 years? In terms of energy density and in terms of the cost effectiveness.

So we -- in the deck, we talked about picking a form factor that packages really well. So for a certain set of applications most battery makers would agree that a prismatic shape is ideal for many attributes. And so I highlighted those in the presentation. So there's a rationale. So that's a big, big barrier. The 4680, 4695 large cell formats have been a good solution. They package an unusual shapes well. They do have a place. Now you'll see some new chemistries into those cells that are even going into luxury vehicles. And it's also a cell that we could make. We're just choosing not to right now. The one we've chosen it for the applications we have our best place. So we're not making only that sell. We can go and make a 4695 as well. It's a section of our plant that would change for that process. And it's an application-specific need. We will probably make a 4680 for 2-wheeler as an example. So I didn't want to leave the audience with the impression that we've chosen one cell forever. We've chosen one cell, the lines that make that are, therefore, upscalable to multiple technical technology shifts on all material changes as well as going into solid-state solution. That was one of the key strategies for that because we see in the next decade, that migration likely to happen. Therefore, we don't have to change assets.

And when is our line is going to commission in terms of the manufacturing side? And I mean, when can we expect the sales to start going to the client, I mean, the anchor system?

It's a 2-year -- start-up production is the question?

Yes.

Yes. It's about a 2-year window. Some people can do it in 2 years, including sort of starting and scaling we're going about it where we're copying something that's -- that will be running. So this will be the second plant when we go to our first in sense. So we're trying to short-scale what I call that ramp-up of the first plant. And if you can prepone it in China, you can prepone 2 years to maybe 18 months. In India, if you're really crafty about permitting and land and so forth, you can also prepone it a little bit. Right now, there's a shortage globally of clean rooms. These are big clean room factories, drive room factories. And so there'll be some mitigating factors for everybody doing giga-factories right now. So 2 years is a good rule of thumb.

Just coming back to that. One thing was on the vehicle architecture side as well as, I mean, the battery pack as a part of the structure of the -- I mean, the -- of the vehicle. So are we as of now rolling out that as a structural battery pack in terms of when we are going to these kind of battery packs and the sales?

Yes, he's referring to the idea that batteries used to go into a battery module that went into a pack and then went into a car, and it was a lot of extra engineering and waste. The actual cell that we've designed is called cell 2 pack. It's designed for the next generation of cell 2 pack. The next strategy is what you're referring to is cell to chassis, essentially turning that structure into part of the structural engineering of the body of the vehicle. So it actually plays a structural role. That design we picked is specifically selected for its upgrade ability to becoming a cell to chassis architecture. It's actually if you didn't notice that prismatic is uniquely shaped essentially to give you almost like a honeycomb structure at the bottom of the vehicle. When you go to Gen 3 vehicles in PV EV, there's an opportunity for them to actually consider it. It would be a bit aggressive for TML in the next probably 7 years. whereas JLR would be looking at a cell to chassis solution even in the next decade.

And one last question is on the SDV. I mean, software-defined vehicles. So can we expect or the third generation models will be SDVs? Or I mean that is for the later part?

Not in the current time for us. I think it's going to take longer than the -- the avenue has a more a 25%, 26% kind of time frame, SDV is longer than that. But the journey for that will begin.

First question on the EV demand side. We've done quite a lot to kind of excite the customers in India. Where do we stand on the order backlog right now because we got Tiago, which is a very, very accessible EV for most of the families. We've got Nexon on the top end with a pretty good range. So where do we stand on the order backlog side on EVs, given that we are ramping up to big numbers now in terms of capacity? So where the demand currently is?

I think close to 2, 3 months is something that we -- is normative. We'd like to keep our order book at that closer level.

And will there be upside to that as you increase the reach? Do you see more reach upside in terms of network penetration? Can you take it more further?

Volumes is something that we will be -- that's why volume growth is a very important temperative for Shailesh.

And second question is on the EV funding. As in -- we got a $2 billion CapEx. We got $1 billion from TPG. There was supposed to be a second round. We haven't heard. And recently, there were statements that you may not be looking at a second round. So is there a rethink on the entire funding for the EV business given how the profitability is shaping up? And how strategic is going to be? So if you can just help us understand the thought process, how do you see how much is 90% ownership good enough? Or would you like to dilute more? And if any time lines on that?

See, currently, when the original fundraise was needed, that was a very critical juncture because they needed to unlock the growth there. Currently, the plans are all locked and loaded, and we are going with that. So if there's an opportunity, if at the right valuation with the right kind of partner we may look at it, but it is no more of the front table conversation for us.

And finally, Balaji, as you talked about the debt reduction targets, which are quite aggressive. What are the things which can go wrong? And you talked about things which you are doing, what is in your control, but -- and the environment currently. But what are the things which can derail the plan for us because we had a target also for a net debt 0, it's kind of deferred. So I'm just trying to understand what are the things which can still not work in our favor, both across the group as in JLR and the India business?

Yes. So the world is not necessarily a sanguine place at this point in time. There's enough happening in the world. So we are doing our level best to make ourselves resilient. But if demand were to improve because who knows what can happen to demand if in the geopolitical situation, spirals out of control. What happens is geopolitical situation can also completely mess up the supply chains, which are all just about getting their act together across the world. So that could again come back and derail us. I think there's enough in the -- and let's say, because if commodities start going through the roof, that could again be the next set of issues that we need to deal with. The part is each of these issues we have seen in the last, every possible issue that we could conceive of, I think we have seen so far. And given the track record of the auto industry, there could be one more that would come with you are not seeing so far. So the sphere of the unknown-unknown is what I would be rather bothered about. Rest of it, I think we have the wherewithal to cope with given that we just been baptized by fire.

This is Ashish from Macquarie. My question was for Tom. On the raw material sourcing for our battery plant. What are we planning to derisk from both from availability and pricing point on the raw material side?

Pricing is okay. You've essentially form a relationship with your customer to handle what I'll call indexation of pricing what just happened with lithium was out of control and manipulated by what ongoing in China, people don't expect that to repeat. Lithium clearly shouldn't go up 700%. In terms of supply, there was a big scare, a big frenzy around supply. And so we studied every place to secure it, and there are multiple contract options available and when the recessionary forces just took hold and people stopped the frenzy of it, it turns out there are a lot of options for it. So we've already got through our relationships, access to everything. We're actually holding off on lithium. This is 2 years ahead of production. We're holding off because we're just waiting for it to completely calm down. We're also tapping into discussions around how to play with equity potentially in the back end because for the Tata Group, it's an interesting play for other members of our family. To actually get all the way back into mining or refining or to a pre-camera chem. So there's an interest in the Tata Group and every facet of the supply chain, especially for critical material like lithium.

So as of now, are we like contracted just to get some more clarity on that, any form of 3-year, 5-year longer-term contracts have you entered into? Or are all options currently open for us from a security point of view?

The offtake agreements that we have, we just -- we're piggybacking on an offtake agreement that already exists, but it's futured for us. And so hopefully, it even gets better than what it is now. That's just a protection you have in the beginning. Again, this is 2 years ahead of consumption. So there'd be redos of everything that we have right now in this window.

And my second question is on the EV bus side. Do we see a significant CapEx in terms of product development, like we are seeing on the personal vehicle side or there it's a very simple easy transition from ICE buses to electric buses?

So I think, as I mentioned in my presentation, to meet the CSL tender, we've actually already invested in what we call as a Gen 5 architecture in buses, right? And this architecture, I should hold us good for quite some time. And in buses, as you know, I think the investment happens at 2 levels. One is the rolling chassis and second is the body, right? So on the rolling chassis, I think we have done the investment. We have multiple configurations, which can be produced from this. As far as the body is concerned, which is in our subsidiary, Tata Motors Body Solutions Limited, we do have that also ready. So I don't see huge CapEx coming up in the future.

I think we'll take that as a last question. Thank you. So with that, we come to the end of this event. But before we go, I would like to thank everyone that played their part in putting this event together. The organizing team that led this event, Investor Relations, ably supported by the Corporate Communications team, the PNSQ team for putting us through to the right partners, the design team and product teams that helped us with the amazing products on display, the very helpful staff at ITC and our agency partner expand, that's been on this tirelessly. Special thank you to the presenters for seamlessly bringing forth the vision of the business and for engaging personally with the audience, your insights and your direction, bring a clarity of thought that is most helpful. And a shout out to their teams as well, who have supported us for today. And most importantly, thank you to all of you for your participation, your attention and your engagement. As a token of our appreciation, we intend to plant a grove of trees in your name. A certificate, which will serve as a memory of today's event will be in our inbox in a couple of days. We also have a goodie bag for you, which you may please collect on your way out, and thank you for your trust and unwavering partnership. Have a good day. and we look forward to seeing you at the JLR Investor Day on Monday. Please do join us for tea and snacks before you leave. Thank you.