In this era of clean-energy focus the newswires have recently been buzzing about TATA Motors' major stake acquisition in a little known Norwegian EV manufacturer. The Indian conglomerate's European Technical Division, based in Warwickshire (near the Gaydon based Jaguar-Land Rover engineering site) has taken a 50.3% controlling slice of Miljo Grenland to gain access to EV engineering integration knowledge. Knowledge set to install the polymer L-ion battery technology sourced from Canada's Electrovaya into the TATA Indica V2 small passenger car.
That car though 10 years old now continues to be one of India's mainstay vehicles set for possibly pleasing sales over 2008/9 as the Indian economy slows in the global economic downturn. As with China's love affair with VW's older models, there may be newer, 'sexier' vehicles available but they cost more and are mechanically effectively unproven in a consumer environment that likes what it knows, and knows what it likes.
However, we don't suspect there'll be thousands of 'EV2s' swarming TATA's hometown of Mumbai anytime soon. TATA's board is renowned for its technical R&D (including compressed-air propelled municipal fleet vehicles), and this newly announced technical initiative with Norwegien-Canadian business partners should we believe be regarded as TATA needing to effectively 'stay in the game' amongst its global VM peer group that have signed battery development agreements with Electronics manufacturers across both ambitious L-ion and the more presently tenable Ni-MH.
Thus whilst there may be a limited number of EV2s running around Gaydon and Mumbai for evaluation, demonstration and publicity purposes, these cars will in effect be technology test-beds to gain a better understanding of the technical limitations and solutions to overcome those boundaries. And critically, the absorption of Electrovaya's knowledge into the heart of TATA, including TATA Power.
Given the Green political agenda of the 'developed' regions, led by proponents like Sir Nicholas Stern and Al Gore, Ratan Tata recognises the level of importance between the techno-political interplay, and understands the influence the eco ideology has on the innate nature, and multi-dimensional aspects of the TATA conglomerate. As such seniors such as JJ Irani, Director at TATA Sons, takes a lead role as Chairman of the Climate Change Steering committee, dedicated at cross-company initiatives, typified by efforts throughout the value-chain from TATA Power providing the conglomerate's and nation's power to the highly energy intensive manufacture of complex products such as cars, trucks and buses, which in turn utilise, en mass, massive amounts of hydro-carbon and so CO2 & variant particulate release.
Thus there is a natural feedback-loop from power generation to storage to usage to reclamation.
Thus given its broad span of effectively intertwined industrial and consumer activities, and its obvious regional economic and environmental importance, TATA is remarkably positioned as a major instigator and catalyst for ASEAN industrial advancement philosophy.
Of course, that political 'will' / 'pressure' comes from primarily the US and W. Europe and the G8 countries, though Russia as a major fossil-fuels provider and now with de-stabalised economy, is less vocal. But even with the odd logically reticent member, the G8 has since 2003 endeavoured to invite the quickly advancing, massively growing [and hence CO2 profligate] 'O5' (Outreach Five) nations to join the them at the table for Climate Change talks amongst other issues. [NB. The 'O5' being: India, China, Brazil, Mexico, South Africa]. In June this year the 'G8+5' members plus S.Korea and the EU en bloc met in Japan and established via the International Energy Agency (IEA) the 'International Partnership for Energy Efficiency Co-operation'.
That aligns to the “G8 Action Plan for Climate Change to Enhance the Engagement of Public & Private Financial Institutions” which importantly launched the “Climate Investment Funds” (CIFs) by the World Bank. CIFs are a conjoined effort by Multilateral Development Banks to create two financing streams:
a) Clean Technology Fund – CTF
Focused on making renewable energy as cost competitive as coal-fired energy as quickly as possible.
b) Strategic Climate Fund -
Focused on piloting new approaches for scaling up technology.
So, although by global-player standards, TATA has come late to the EV playing field, it has unsurprisingly come at a poignant time given the macro-context.
Thus, Ratan Tata, Ravi Kant and JJ Irani are effectively centre-stage and leading the way in translating the BRIC regions eco-rhetoric into real execution. A weighty task given global jitters at present. The considerable slow-down of these economies in recent months combined with the global frozen liquidity problem of recent weeks has spotlighted the role of Central Banks core importance and influence. And indeed their required alignment with World Bank and IMF policy now appears to indicate that the new low-cost liquidity made available from central banks, to the banking system itself and direct lending to corporations, is made available with implicit Climate Change understanding regards sector and company industrial policy initiatives.
And as TATA seniors well know, in a risk-averse period where large scale investors such as Institutionals, Private Equity and Hedge Funds have massively retracted their capital awaiting stabilised markets, it will be the large corporations that will have to, and be seen to, convey their Green ambitions to access short & mid-term national, regional & unified-world government liquidity.
In that light, Miljo Grenland's Kr12m costs were a small price to pay to add EVs to the conglomerate's impressively growing, inter-divisional R&D portfolio.
