Tata's Nano may put millions of new drivers on the roads. It also may herald a new source of pollution.
By Jason Overdorf and Fred Guterl
Newsweek Web Exclusive
Updated: 9:26 AM ET Jan 11, 2008
The unveiling of Tata Motors' People's Car—perhaps the most anticipated vehicle in a decade—had the frenzied atmosphere of a blockbuster movie opening. For four years Tata kept every detail of the car's development top secret, and now a hundred or more photographers jostled to get the first shot. When chairman Ratan Tata, citing the first flight by the Wright brothers and the invention of the computer, pulled back the curtain on the newly named Nano, it turned out to be a four-seater, a bit more than three meters long, with a 642cc engine and made of plastic and glue instead of welded steel.
Despite speculation to the contrary, the car will retail for 100,000 rupees, or $2,500. ("A promise is a promise," Tata said.) At less than half what Maruti Suzuki, the current market leader in India, charges for its cheapest model, the Nano is priced to get urban Indians off their motor scooters and motorcycles and into a car. It is expected to inspire other manufacturers to develop cheap cars and force Maruti Suzuki and others to slash prices, bringing millions more new cars onto Indian roads over the next five years. But the prospect of a flood of new drivers in a nation of 1 billion people has inspired a backlash against the Nano from environmentalists, who fear it's a major new source of pollution.
The concern is that a supercheap auto will encourage development on the American model—relying on the car rather than mass transit. More drivers will add to air pollution, already a critical problem in more than half of India's cities, and to the carbon in the atmosphere that causes global warming. "This car promises to be an environmental disaster of substantial proportions," says Daniel Esty, an environmental expert at Yale.
Tata has worked hard to get out in front of its critics, at least on air pollution. The first models to roll off the company's assembly line in Singur, West Bengal, will get about 20 kilometers per liter of gasoline (50 miles per gallon) and meet stringent European emissions standards that have yet to be adopted in India. Tata insists that the Nano will pollute less than the two-wheelers it is intended to replace and get roughly the same gas mileage as the Maruti models. The Nano's catalytic converter appears to reduce most pollutants by about 80 percent—not as much as the 99 percent Western models do, but still a big reduction. Environmentalists, though, say that it will probably fail after a few years on the road. The reason: Indians typically don't keep their autos in tip-top shape. When the catalytic converter fails, emissions of pollutants could shoot up fivefold.
The story gets worse when you consider greenhouse gases like CO2, which escape catalytic converters. The more gas burned, the more CO2 released. The Nano is likely to replace motor scooters and motorbikes, which get about 54 kilometers to the liter, more than twice what the Nano gets, according to Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis, who has studied the situation in Delhi. That means fuel consumption and carbon emissions will almost certainly rise. "Every new purchase of this vehicle is increasing fuel use [per passenger] by a factor of two to seven, depending on how many people are in the car," says Sperling. That doesn't even account for a decline in fuel efficiency if the cars are not maintained well.
Western environmentalists know they have little moral standing to criticize Indians for wanting cars, particularly one that meets the highest Western emissions standards. But they're rattled in part because they didn't see this coming, and will have to recalculate projections for the buildup of greenhouse gases based on a world of many more drivers. "In none of our reports did we assume there'd be a car like this," says Judy Greenwald, director of innovative solutions at the Pew Center on Global Climate Change. "This is a new category. It will affect everybody's projections."
Indian leaders must also now grapple with the prospect that their nation will become an auto-based society like the United States much faster than expected. Tata's chairman chafed at the suggestion that his firm should be held responsible for the state of pollution in India—or the planet. "Were we to succeed and sell 500,000 small cars every year, we would then, at the end of five years, constitute approximately 2.5 percent of all passenger vehicles in this country," Tata said. "We could hardly be considered a nightmare."