Billionaire Indian investor Rakesh Jhunjhunwala is betting on automaker Tata Motors as one of the winners in India’s growing electric vehicle market.
“I think the biggest and best electric car player in India will be Tata Motors,” Jhunjhunwala told CNBC’s “Street Signs Asia” on Tuesday.
“I am a major shareholder in Tata Motors. I am interpreting the history of EV through Tata Motors,” said the investor.
He explained that the assessment will not ultimately decide who will win the race for electric vehicles. Instead, large companies with manufacturing and investment capacity, distribution channels, production experience and the ability to design good cars will eventually take the lead, according to Jhunjhunwala.
“I think it will be the Mercedes, the Volkswagens and the Tata Motors, who are the real winners in the electric race,” he said, adding that another factor needed to be successful in India is being able to customize the cars for Indian road conditions – for example, the ability to drive these cars on flooded roads.
India is also a cost-conscious market, where the use of electric vehicles probably depends on the type of incentives the government offers, explained the investor. Infrastructure, such as charging stations, has yet to be built for wide adoption. But, Jhunjhunwala said, India is “ready as any developing country, but I think the pace of readiness will increase like anything”.
Both Tata Motors and competitor Mahindra & Mahindra already sell electric vehicles. Electric vehicle giant Tesla is preparing to open an electric car manufacturing facility in southern India.
Tata Motors signage displayed at the company’s headquarters in Mumbai, India on January 27, 2018.
Dhiraj Singh | Bloomberg | Getty Images
Motilal Oswal, a diversified financial services company, told CNBC this month that much of the excitement in India’s electric vehicle market comes from ancillary spaces such as battery manufacturing.
Among automakers, the company said it prefers Maruti Suzuki – India’s largest automaker – because of its strong distribution network, although Maruti itself is not as optimistic about electric vehicles yet.
India is trying to reduce its dependence on oil and improve air quality. This is likely to boost electric vehicles.
Reuters reported last year that India has potential plans to offer $ 4.6 billion in incentives to companies creating advanced battery manufacturing facilities as part of its efforts to promote the use of electric vehicles. The country previously approved a scheme to subsidize the sale of electric and hybrid vehicles.
In this month’s annual budget for the fiscal year beginning April 1, India announced a voluntary vehicle dismantling policy to eliminate old vehicles that contribute to the country’s poor air quality.