Tata motors has signed a MoU with government of Maharashtra to deploy 1000 Electric vehicles across passenger and commercial vehicle segment. Further, its group company Tata Power will set up charging stations for the same.
Why is this important
Drawing inspiration from countries like the Norway, China, UK, and France, which are spearheading the much-needed shift from fossil fuel-driven economy to one that is sustainable and eco-friendly with a view to mitigate climate change, the Indian government, over the last few years, has been increasingly promoting alternative mobility solutions, chief among them electric vehicles (EVs).
The shift to electric vehicles could potentially help India save up to $300 Bn (INR 20 Lakh Cr) in oil imports and nearly one gigatonne of carbon dioxide emissions by 2030. Further, the Indian auto industry is watching the developments related to EV very closely as it will be a key game changer. Also Union Minsiter Nitin Gadkari had given a warning signal in Sept,2017 about the need of the industry to concentrate on EV’s.
Stock to be impacted
The news is positive for Tata Motors (CMP: Rs 287, M.cap: Rs 82924, 6.5x FY20E PE) although currently EV’s do not contribute substantially to domestic revenues for Tata Motors.