TATA– the Company was founded in 1868 by Jamsedji Tata as a trading company. He started the firm with only 21,000rs or 281 US dollars, though the amount had more value than it has today. Six years later the company establishes a textile mill. Since then the company started moving upwards. During the ’90s the company started entering different segments. Today TATA group is one of the largest companies in the world with a maximum number of subsidiaries. The group has successfully achieved the market of the automobile, textile, IT-services, power, communications, steel (Tata steel is the 8th largest steel company around the globe as per the data of steel technology), and even the group has started capturing the e-commerce market as well. There are more segments where the company serves, in this article I’ll try to simplify how the group can win the electric vehicle market as well.
Before we go into Tata’s possibility of conquering the electric vehicle ecosystem, let’s look at some technicality of how the system works.
Why EVs are growing rapidly?
There are a few key points that are helping the segments-
- Electric Vehicles are delivering high performances.
- Battery technologies are more cost-efficient.
- Rising prices of Petrol Diesel (Overall crude).
- Government Incentives– Govt. is boosting the market more, recently Indian Govt. announced a scheme – If you take an electric vehicle in a loan you’ll get a small reduction in interest rate.
- Environmental Impact– We know the pollution that causes by petrol and diesel cars, where electric vehicles have no to minimal effect on the environment.
In short, it’s the future.
I’m not an automobile engineer, so I won’t go into details, I’ll just try to talk about a few basics which will help us to understand the concept of how the company can play a big role. One thing I can do m I’ll attach a link where you can learn about electric vehicles.
Understanding the Electric Vehicle Ecosystem-
Types of companies that will be playing the game-
a) Products manufacturer, – Car manufactures, lithium miner,
b) Infrastructure providers or services, – smart grid,
c) Battery technology supplier or relationship management.
The main hurdles that we are seeing right now are,- Firstly, electric vehicles aren’t affordable for most people, the cost of EVs is comparatively higher. Secondly, I feel we are still missing a lack of efficient engines. Still, consumers are facing battery-related issues. Lack of charging infrastructure, though companies are started planning about it, recently BPCL has announced that they are planning to set up 1,000 EV charging stations.
Let’s look at the ways how electricity is used to power the vehicles–
Hybrid Electric Vehicles or HEVs, this system has ICE (Internal Combustion Engine) and electric power. That means batteries can be charged by regenerating braking (when you use the brakes the batteries start getting charged) and of course also by connecting the generator with ICE.
Plugin Hybrid Electric Vehicles PHEV, this system works with OBC or On-Board-charger that allows the battery to get a charge from an external power source.
Lastly, Battery Electric Vehicles BEV, here the batteries get a charge from an external source also it has regenerative braking.
How TATA can win the game-
As we have seen before there are different kinds of products that need to be manufactured and taken care of in order to achieve the EV ecosystem. Now the question is, does TATA have players in every segment of electric vehicles?
Raw materials and battery manufacturing- TATA Chemicals
Different parts and system supply-Automcomp System
Vehicle Sales & servicing- TATA Motors
Vehicle Financing- TATA Finance motors/ TATA capitals
Energy supply and also for charging infrastructure- TATA power
Recycling- TATA chemicals
Tech part- TCS, Elxsi (IoT).
Where TATA is standing right now?
When we talk about the core providers like parts, engines, and even the context like financing, tech, servicing TATA is already there. TATA power has already announced they are going to build 2500 charging points by FY22, it has already crossed the number 550. They are also supporting home charger installation. TATA components are already producing the battery pack assembly for Nexon EV and Tigor EV (Electric Vehicles by TATA). Another subsidiary, Tata Chemicals is playing a major role in the battery segment, from manufacturing to recycling.
TATA EVs are one of the first companies in India that sell EVs in the market. Although there are a few others like Morris Garage, Hyundai, M&M. But the total number of units of selling by TATA is higher than other companies as of now. In last year TATA sold nearly 2700 being first, whereas MG sold around 1240 being second.
TATA Motors is also planning to create a new Electric Vehicle unit. And they are trying to raise $1billion from TPG Rise Climate along with its co-investor ADQ for approximately 11% to 15%. Read the TheHindu article to know more about it.
TATA Power is already working on renewable energy growth. The company has installed its first vehicle charging facility in Mumbai. They are planning big for charging stations.
TATA Chemicals working big for batteries. The company has set a Lithium-ion cell manufacturing project in Gujarat. These lithium-ion batteries are used for portable electronic and electric vehicles.
TATA coffee– To understand the benefits of Tata coffee or beverages, we need to look at more developed countries. Look at the USA or UK you will see a coffee shop or MACD, or KFC near to every charging station. Charging the battery of your car is going to take a minimum time where you will most likely love a cup of coffee or snacks for that matter. In India, you can see Starbucks near charging stations. Those of you who don’t know Starbucks or TATA Starbucks Private Limited is a 50/50 joint venture company. It is a foreign company run by TATA in India.
Plans with Croma-
Croma is the retail subsidiary company of TATA group. This is basically a retail showroom for electronic appliances. Recently TATA has announced that consumers can see the new EV’s by TATA in the same retail showroom even they can book a test drive. Still, we need to see how they are going to do that, but in this way, they can get an extra advantage with customers.
Above all the information we saw, we understood one thing that Tata has an edge compared to other companies in the EV ecosystem. But still, the company has to look at the competitors, the types of cars they are producing how they are providing services, etc.
One More big threat can be Tesla. Recently the company announced along with Apple that they will shift their global manufacturing hub to India. Tesla Cars are the most lovable electric Vehicles by youth. The problem with Tesla is their product is a little costlier for Indian middle-class families. Nonetheless, all EVs are costly even Tata and MG as well. But think about it if Tesla starts building their cars in India they will not have to pay the import duties, which will decrease the selling price. Even Tesla can adopt Indian consumer behaviors and build according to that with affordable prices. Tata needs to be ready for this giant as well.
If you want to about electric vehicles in detail click the link below,