Ali Hasan
There had been major speculations that Tesla could team up with Tata in order to manufacture EVs in India and also to expand their reach into various parts across the country. As soon as this news broke out, the shares of Tata were trading in high volumes and were 7% up on 20th January. The rally was due to massive volume-based buying.
According to Business Standard, a combined 199 million equity shares had changed hands on the counter on the NSE and BSE. The stock of the Tata Group commercial vehicles company was trading at its highest level since September 2018.
The stock has managed to hold investor interest despite denying reports that it’s planning to sell its stake in the domestic passenger vehicle (PV) business. In the past seven trading days, the stock has rallied 26% on report that Tesla may choose Tata Motors for its much-awaited India foray.
“Tata Motors has not taken any decision regarding a strategic partner for its PV business and categorically denies any and all rumours suggesting the same” Tata Motors said on January 12, in exchange filing.
The carmaker had to issue a statement after its EV wing Tata Motors Electric Mobility shared a now-deleted tweet hinting that rumours about the tie-up was not baseless. There have been a lot of talks on who Tesla could have been talking with for its India partnership. Most prominent among the names was Tata Motors. Last week, a spike in Tata Motors shares amid such talks only fanned the rumour mills.
A tweet from Tata Motors’ EV wing sparked the speculation further. Quoting a couple of lines from a famous Bollywood song, Tata Motors Electric Mobility had tweeted, “Aajkal tere mere pyaar ke charche hain akhbaar mein, Sab ko malum hai aur sabko khabar ho gayi!“, and tagged Tesla and its CEO Elon Musk with the hashtags WelcomeTesla and TeslaInIndia. However, the tweet was deleted later.
Meanwhile, so far in the month of January 2021, the stock of Tata Motors has rallied 51% after the company’s subsidiary Jaguar Land Rover (JLR) posted a second successive quarter-on-quarter recovery in sales, despite the continuing impact of Covid-19. In comparison, the S&P BSE Sensex gained 4.4% so far in the month.
For the calendar year 2020, JLR retail sales were down 23.6% on 2019, reflecting the industry impact of Covid-19 particularly in the first half of the year when plants were shut down for more than 2 months. However, the company has since seen sales increase Quarter-on-Quarter by over 53% in the quarter ended 30 September, followed by the 13.1% increase in the most recent quarter.
The US-based EV maker is still in talks with several state governments to set up its facility in India to produce electric vehicles. Tesla might need to look for a local partner initially to be able to start its business in India before it can set up its own facility in future.
Reports indicate that the American EV maker will launch its best-selling and most affordable Model 3 car in India. Tesla’s very first offering will go on sale by the end of the first quarter of FY 2021-22. Pre-bookings are also said to initiate soon.
