Indian billionaire investor Rakesh Jhunjhunwala is betting on automaker Tata Motors as one of the winners of the growing Indian 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 of Tata Motors. I play the EV story through Tata Motors,” said the investor.
He explained that the valuation will ultimately not decide who will win the electric vehicle race. Instead, big companies with manufacturing and investment capabilities, distribution channels, manufacturing experience and the ability to design good cars will eventually emerge, Jhunjhunwala said.
“I think it will be the Mercedes, the Volkswagens and the Tata Motors that will be the real winners in the electric race,” he said, adding that another factor needed to succeed in India is being able to adapt it is. the cars for Indian roads – for example, the ability to drive those cars on flooded roads.
India is also a cost-conscious market where the use of electric vehicles is likely to depend on the kind of incentives provided by the government, the investor explained. Infrastructure, such as charging stations, has yet to be expanded for widespread adoption. But, Jhunjhunwala said, India is “ready as any developing country, but I think the pace of preparedness will pick up like anything.”
Both Tata Motors and competitor Mahindra & Mahindra already sell electric vehicles. The American giant Tesla is reportedly preparing to open an electric car production unit in South India.
Signage for Tata Motors at the company’s headquarters in Mumbai, India, on January 27, 2018.
Dhiraj Singh | Bloomberg | Getty Images
Diversified financial services provider Motilal Oswal told CNBC this month that much of the excitement in the Indian electric vehicle market is coming from support spaces like battery manufacturing.
Among the automakers, the company said it prefers Maruti Suzuki – India’s largest auto maker – for its strong distribution network, although Maruti itself is not yet as optimistic about electric vehicles.
India is trying to both reduce its dependence on oil and improve air quality. That will likely boost electric vehicles.
Reuters reported last year that India has potential plans to provide $ 4.6 billion in incentives to companies setting up 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 scrapping policy to phase out old vehicles that contribute to the country’s poor air quality.