Sunday, July 27, 2008

An update on India's Tata Nano

It has been a few months since I checked in on the buzz surrounding the imminent production of the world's cheapest car: Tata Motors Nano--a four-person mini- with a two-cylinder engine and a base price around $2,500.

Several items of note:

1) Rising prices are also pushing at Tata Motors; while it will still be the cheapest car in the world, the Nano probably won't stay under $2,500 by the time production ramps up.

2) You won't find the Nano available in America any time soon, according to Auto Observer. The vehicle doesn't have air bags, doesn't meet US crash test requirements, and has an emissions profile equivalent to EU III, which places it about 2-3 years behind what it needs to have to be certified in the US. Tata Motors promises to it EU IV pretty soon, but it will need to get to EU V to be considered for US entry. (And the crash test hurdle may also be overcome soon, as well.)

3) Environmentalists are still up in arms about the Nano, because it will encourage several million more Indians to drive automobiles, and that's not seen as a good thing. According to an article at Truthout:

Many environmentalists believe the new vehicle, with a price tag half that of India's current cheapest car, will simply clog up already busy and broken roads and add pressure to an infrastructure that is badly buckling. They stress the need to develop efficient, modern and affordable public transport, especially in cities such as Delhi, which now has a new metro system but where the bus service is overloaded and often deadly.

"My first reaction when someone says they need to buy a car is to say don't buy it," said Soumya Brata Rahut, a spokesman for Greenpeace India. "But people are buying cars, I cannot stop them. The revolution in small cars means there will be more and more."

Asked yesterday whether he thought India had adequate infrastructure to handle the hundreds of thousands of new Nanos that Tata hopes to shift when it goes on sale in a few months, Mr Tata said: "I think there definitely needs to be more investment in public transport [and] I think that India does not invest in our infrastructure." But he said such things were not the responsibility of his company.

4) Indian infrastructure aside, Mr. Tata may well have the last laugh on his critics, as his company is known to be moving ahead with the world's first non-polluting, compressed-air automobile engine for a future version of the Nano. Here's the scoop from EcoFriend:

In addition to the 33hp (25kW) petrol version, Tata is expected to release an air-powered model running a compressed air engine from MDI Enterprises. The engine emits one-third the carbon dioxide of conventional motors of the same size. Cold air, compressed in tanks to 300 times atmospheric pressure, is heated and fed into the cylinders of a piston engine. No combustion takes place, so technically there is no pollution actually produced by the car. But the compression of gases might still do that.

Even then the new engine is an absolute boon to the planet and hopefully all those buying this car will buy one with this type of an engine to power it. A Nano featuring the air-powered engine would be able to travel up to 200km for just $3 worth of electricity. This will also please the environmentalists who have been worried about more pollution since the Nano hit production. Tata has no official word on this yet, but it is just a matter of time.

This raises an important point: while it can't solve everything, market innovation can produce unexpected (and positive) shifts in technological trends that upset the predictions of the high and the mighty. Climate change modelers have always had to deal with the difficulty that their models do not (cannot!) take into account technological changes. If, instead of hybrids and electric cars, another option like the compressed-air engine becomes viable, even if only in the massive markets of China and India, the change to carbon output would be massive. So while some environmentalists were castigating Tata Motors for trying to meet an obvious market need, the company's engineers have been conducting research on a technology with potentially world-changing implications.

And for profit, too.

Will wonders never cease.

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