Chennai: Tightening global availability of battery cells is emerging as a key cost challenge for Murugappa Group’s electric-vehicle businesses, with prices expected to remain firm for at least the next two to three quarters even as improving volumes help narrow losses.“It’s a genuine challenge that we are grappling with, and it was one of the challenges we faced in the first quarter. Going forward, we see this remaining a challenge for at least the next two to three quarters,” Mukesh Ahuja, MD, Tube Investments of India (TII), which runs EV businesses under multiple subsidiaries, said during the company’s Q1FY27 earnings call.He said the company had initially expected battery-cell prices to soften as some tax exemptions enjoyed by Chinese cell manufacturers were phased out. But stronger global demand, particularly from the battery energy storage system (BESS) market, has altered that outlook. “Directionally, the cell prices are not looking likely to cool down, at least in this quarter or even in quarter three as well,” he added.For now, TI is trying to shield itself from the cell-price squeeze by securing supplies in advance. It is pre-booking long-lead-time orders and seeking to lock in prices with cell and battery manufacturers. “These are all the mitigating steps that we are doing,” Ahuja said. But the company is no longer counting on a near-term decline in cell prices.The supply challenge is particularly relevant as the company’s arm, Jayem Automotives, expands its battery capabilities initially to meet the group’s own requirements.The batteries will primarily be used in TI Clean Mobility’s small commercial vehicles and three-wheelers. As capacity increases, Jayem could also sell battery packs to other EV manufacturers, creating a new revenue stream beyond its traditional design, development, prototyping, validation and testing businesses.Ahuja said EV segments are already showing better operating traction as the EV arm TI Clean Mobility (TICM) recorded its highest-ever quarterly turnover of about Rs 240 crore in Q1FY27 (up from Rs 181 crore in Q4FY26 and Rs 135 crore in Q1FY26), with all four of its businesses—heavy commercial vehicles, small commercial vehicles, three-wheelers and tractors—seeing volume growth.Higher volumes are helping reduce losses in the EV business, although rising commodity costs and pricing pressure continue to weigh on margins.Meanwhile, TII plans to continue funding expansion of TICM and its arms. After infusing Rs 250 crore in Q4FY26, it expects to inject another Rs 250 crore in Q3FY27. It has previously indicated that total funding support could reach about Rs 750 crore over time.TICM is also beginning to look beyond India for growth. It has shipped more than 100 E3Ws to Nepal, marking its first significant foray into EV exports. Nepal, along with Sri Lanka, is being viewed as a market with operating conditions similar to India, while markets such as Tanzania and Ethiopia remain at an exploratory stage.“The initial product feedback is very positive, and we are very bullish on Nepal as a country going forward,” Ahuja said.The company has also started testing L3 electric 3W in select markets in Uttar Pradesh and Bihar. The initial deployment is intended to seed the market and gather customer feedback before TI decides on a wider rollout.
