Indian billionaire investor Rakesh Jhunjhunwala is betting on automaker Tata Motors as one of the winners in India’s growing electric vehicle market.
“I think India’s biggest and best player in electric cars will be Tata Motors,” Jhunjhunwala told CNBC’s “Street Signs Asia” on Tuesday.
“I am a big shareholder of Tata Motors. I sing the EV story through Tata Motors,” said the investor.
He explained that the evaluation will not ultimately decide who will win the race for electric vehicles. Instead, large companies that have production and investment capacity, distribution channels, production experience and the ability to design good cars will eventually come out, according to Jhunjhunwala.
“I think it will be Mercedes, Volkswagens and Tata Motors who will be the real winners in the electric race,” he said, adding that another factor needed to succeed in India is to be able to customize cars for road conditions in India. – for example, the ability to drive these cars on flooded roads.
India is also a cost-conscious market, where the use of electric vehicles is likely to depend on the type of incentives provided by the government, the investor explained. Infrastructure, such as charging stations, has yet to be built for large-scale adoption. But, Jhunjhunwala said, India is “ready like any developing country, but I think the pace of preparation will increase like anything.”
Both Tata Motors and competitor Mahindra & Mahindra are already selling electric vehicles. The American electric vehicle giant, Tesla, is said to be preparing to open an electric car manufacturing plant in southern India.
Signaling for Tata Motors displayed at the company’s headquarters in Mumbai, India, on January 27, 2018.
Dhiraj Singh | Bloomberg | Getty Images
This month, diversified financial services firm Motilal Oswal told CNBC that enthusiasm for the Indian electric vehicle market comes from ancillary spaces such as battery manufacturing.
Among carmakers, the company said it prefers Maruti Suzuki – India’s largest carmaker – due to its strong distribution network, even though Maruti itself is not yet as optimistic about electric vehicles.
India is trying both to reduce its dependence on oil and to improve its air quality. This will probably stimulate electric vehicles.
Reuters reported last year that India has potential plans to provide $ 4.6 billion in incentives to companies setting up advanced battery facilities as part of its efforts to promote the use of electric vehicles. The country has previously approved a system to subsidize the sale of electric and hybrid vehicles.
In this month’s annual budget for the fiscal year beginning April 1, India has announced a voluntary vehicle scrapping policy to phase out old vehicles that contribute to poor air quality in the country.