x Abu Dhabi, UAE Thursday 20 July 2017

Detroit: Say Tata to Indian group's ideas on electric vehicles

Unfortunately for Tata, its intended audience is seeing the Nano as simply cheap rather than value-packed. I suspect the company's concept EV will be more of the same.

Tata may be touting the benefits of its new eMO car but its Nano predecessor  set a bad precedent for the company, being deemed a cheap failure in India.
Tata may be touting the benefits of its new eMO car but its Nano predecessor set a bad precedent for the company, being deemed a cheap failure in India.

Once again, you're probably going to get swept up with the news that Tata (the Indian conglomerate that also owns Land Rover and Jaguar) is going to revolutionise the automotive world. This time, the hoopla will be about the new eMO electric car, a concept that the Indian industrial giant revealed to great effect. The details of the eMO's exact performance potential are unimportant. What will be shouted from the rooftops is that - and haven't we heard this before from Tata - that it could have an amazingly low (for an EV) estimated price tag of US$20,000 (Dh73,500). "See, it can be done" will be the crux of the headlines as the true believers proclaim that sceptics' worry that all EVs are expensive is completely wrong. Or is it?

You might remember a similar hullabaloo in late 2009 when Tata revealed the original Nano. A paradigm shift for the automobile industry was the refrain then as the media hyped its sub-US$2,000 price tag. The question of the day was how traditional car makers could possibly survive when some little upstart of a company could sell people a car so cheaply. Surely, we - save perhaps the truly monied - would also soon be running around in little Indian runabouts. After all, who could resist the lure of a car that barely costs as much as a pair of bespoke shoes?

Well, the Indians for starters. The Nano is considered a failure in its own country, with current sales running at about one third of the projected 250,000 annual production (last September Tata sold only 1,200 Nanos, hardly what one expects from an econocar in a country of more than one billion). Why? The kinder of critics point to the lack of a diesel powertrain, others report spontaneous fires. But what's killing the Nano is that it's too cheap. Visiting motoring journalists may have been amazed. Unfortunately for Tata, its intended audience is seeing it as simply cheap rather than value-packed. I suspect the company's concept EV will be more of the same; much ado about the possibilities but precious little focus spent on the realities.

Which pretty much sums up the entire alternative powerplant movement these days. Walk the halls of the Detroit show and you'd swear there's some huge, pent-up demand for electrified vehicles of any nature. Automobile manufacturers are typically the most market-driven of capitalists and this level of dedication would normally indicate a huge consumer demand as yet unfilled.

But the reality of the "green" market says otherwise. There is still precious little indication that mainstream consumers are buying into the green revolution. Hybrids, for instance, have been the darling of the air waves for more than a decade now yet have a toehold in the car market - sales are barely at two per cent of all light vehicles sold in North America. Other than Toyota's success with its now-extensive lineup of Priuses, there's been little financial achievement in the hybrid segment.

It's not for the lack of a sophisticated product. Even upstarts such as Hyundai can boast an excellent combination of electric and petrol motors, but the truth is that the company will sell about 20 times more conventionally powered Sonatas than hybrids. BMW introduced a new ActiveHybrid 5 version of its luxurious 5 Series saloon in Detroit. It may well be a marvel of technical innovation and seamless comportment. But if the success of the company's ActiveHybrid X6 (it was pulled from BMW USA's lineup) is any indication, precious few will pony up the extra cash to save but a few litres of fuel every 100km.

And what of electric vehicles themselves? Well, both Chevrolet's Volt and the Nissan Leaf have been on the market for a year. Both are amazingly sophisticated machines. Both offer substantial emissions reduction. And both enjoy lavish government subsidies. Yet, for all their hype, they combined for just over 25,000 sales worldwide, their emissions-reducing frugality barely offsetting the 21,500 extra Porsches - mostly gas-guzzling Cayennes - that Porsche sold in 2011 compared with 2010.

Despite all the alternatives revealed here in Detroit, despite all the hype surrounding the electrification of the automobile and despite the incentives governments the world over are tossing around, there is no great groundswell of consumers willing to pay large handfuls of cash to reduce emissions. Electrified vehicles are just not selling in sufficient numbers to make an impact in either emissions-reduction or fuel conservation. What consumers are willing to pay for are conventional automobiles with significant fuel economy increases so they can best weather pump price hikes.