Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Tata Motors Stock Is Surging on India Tesla Rumors

By John Rosevear - Jan 11, 2021 at 11:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's not official, but it could be big.

What happened

Shares of Indian automaker Tata Motors ( TTM -1.66% ) were sharply higher on Monday morning, amid rumors in India suggesting that the company may be close to a deal to build Tesla ( TSLA -5.00% ) vehicles under contract. 

As of 11 a.m. EST, Tata's American depositary shares were up about 13.9% from Friday's closing price.

So what

Tata's U.S.-listed shares appear to be following the lead of its New Delhi-listed shares, which closed up 12.6% on Monday on rumors that the company is about to sign a deal with Tesla.

As reported by India's The Economic Times, the rumor is that Tata, an Indian automaker that owns the Jaguar and Land Rover luxury brands, will soon announce a deal to manufacture Tesla electric vehicles for the Indian market. 

A red Jaguar I-Pace, an electric luxury crossover SUV.

Is Tata's experience with the electric Jaguar I-Pace and its home-market Nexon EV enough to make it Tesla's preferred partner in India? Image source: Jaguar Land Rover.

Tesla has said it plans to enter the Indian market in 2021, but it hasn't provided any details. 

According to the Times, the rumor is that Tesla has been searching for an Indian manufacturing partner and settled on Tata after its due diligence process concluded that the Indian company had the best electric-vehicle infrastructure among the country's major automakers. Tata's Nexon EV is India's best-selling electric vehicle. 

Now what

While this is just a rumor -- and auto investors should discount it accordingly for the moment -- it's worth nothing that Tata's shares have had a good run recently on actual news: Sales at both its domestic Indian operation and its Jaguar Land Rover unit finished 2020 on high notes. The company's domestic sales were up 21% from a year ago in December, while Jaguar Land Rover's worldwide retail sales rose 13.1% in the fourth quarter of 2020 from the same period in 2019.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tata Motors Stock Quote
Tata Motors
$31.44 (-1.66%) $0.53
Tesla, Inc. Stock Quote
Tesla, Inc.
$1,030.33 (-5.00%) $-54.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.