BHEL & ISRO sign MoU for EV Battery Production
Indian state-owned companies have failed miserably in an open market where they do not have monopolistic or semi-monopolistic control. Some of the other state-owned companies which have survived or thrived are due to ownership of such assets which cannot be easily be replicated by private players. All other PSUs which have had to compete in a free market with private companies have in general gone bankrupt. Our erstwhile BSNL / MTNL which were billion dollars companies at one point in time are a case in point. Though they are not bankrupt they are pretty much on the way there. In new age industries such as technology, state-owned companies stand almost zero chance. Red tape, outdated procurement rules, a lethargic workforce means that these companies have almost zero chance to succeed.
BHEL and ISRO are two state-owned companies which have signed an MOU to manufacture lithium battery for EV production. BHEL is a behemoth which has been in a free fall for many years now after the coal based power plant industry went into a downturn. The company has not been unable to replace this declining revenue stream and to me, it seems highly unlikely that it will ever do so. BHEL wants to make electric buses, cars etc. which seems to me a failed venture. It will simply be unable to compete with major automakers who possess much greater expertise and capabilities.
ISRO has been a successful agency in the area of space (thanks to its monopoly) and has also shown good execution. However, to think that the company can be successful in producing and selling lithium batteries in a market with large and competitive private companies, I don’t think it can make it. The earlier intention of ISRO to license its technology to other companies made a lot of sense provided that its technology could compete with other lithium technologies. However, BHEL may not be an ideal partner. The company really does not have much clue on what it is doing. Recent evidence is building a small 100 MW cell and panel factory which is not economic and viable. God only knows why they build a puny factory in a highly competitive solar manufacturing industry which is already oversupplied.Google+