Tata Motors’ electric sport-utility vehicle (SUV) Nexon EV is displayed during its launch in Mumbai, India, January 28, 2020. REUTERS/Hemanshi Kamani
MUMBAI (Reuters Breakingviews) – Zero-emission cars will be a road test of conglomerate power. Tata is drawing on expertise from across its $160 billion empire to support an electric vehicle initiative. Patriarch Ratan Tata attended Tuesday’s unveiling of the Nexon EV in Mumbai along with bosses of more than a half-dozen related companies. If the plan works, it could deliver rare and valuable synergies.
The bold strategy signals a strong commitment to turn Tata Motors into a force in green cars. The Indian government, keen to reduce pollution and high oil import bills, wants 30% of new passenger vehicles sold to be electric by 2030, up from less than 1% of the 3.4 million sold in the year to March. But they are already popular for fleet customers and volumes will rise as battery costs fall and more models become available. China’s Great Wall Motors, for example, is widely expected to roll out a super-cheap model in India next month.
Tata’s collaborative effort should help accelerate sales. Tata Power, for example, will have 650 charging stations across the country over the next year. Owners of Tata-branded cars will have priority access and tariffs. Meanwhile, Tata’s partnerships should in theory be less messy than the sorts of outside deals struck by Tesla with Panasonic and General Motors with LG Chem.
The Indian group is tapping many parts of the realm, allowing it to move faster. Tata AutoComp will assemble power packs, retail chain Croma is set to sell vehicles to its electronics customers and Tata Motors Finance will provide flexible financing. Tata Consultancy Service has built an app to make related payments and more. Tata Chemicals will explore recycling batteries, but the group won’t have any obvious advantage in the global race to secure critical raw materials cobalt and lithium.
Even so, it’s a potentially lucrative way to extract value from a sprawling outfit. Few beyond entertainment powerhouse Walt Disney have mastered the form. Tata is tightlipped on how much money its various divisions are investing in the electric-vehicle push. In a fast-moving industry, though, Tata will need to ensure its “in-house” partners and suppliers stay competitive on quality and price. It’ll be a corporate triumph to get the project humming on all cylinders.
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