Reliance Strategic Business Ventures Limited (RSBVL), which is a wholly-owned subsidiary of Mukesh Ambani’s Reliance Industries acquired an additional 28.16 percent stake in National Aeronautical and Space Administration (NASA) incubated skyTran that develops pod car transport systems. RSBVL’s $26.76 million investment now puts its equity share at 54.6% in skyTran, documents submitted to Bombay Stock Exchange (BSE) says.
This investment has spiced up the Indian mobility and public transit sectors. While the battle lines are being drawn in a post-Covid world, where the mobility sector is expected to witness a sea change focusing on high-speed intra and inter-city connectivity. With Tesla already in the game with its Hyperloop program, experts in the field believe that Reliance is all set to join the fray, and the recent investments are precursors of the same.
“We are excited by skyTran’s potential to achieve an order of magnitude impact on high-speed intra and inter-city connectivity and its ability to provide a high speed, highly efficient, and economical ‘Transportation-As-A-Service’ platform for India and the rest of the world,” said Reliance chairman Mukesh Ambani about the investment.
Rapid growth, growing demand and need to control emissions
In a research done on Indian Urban Mobility by McKinsey sometime back highlighted the urbanization “opportunities” for India to seize by 2030. Globally technical giants are capitalizing on these factors as predicted by McKinsey, which says that 590 million people will live in cities as 70% of net new employment will be generated in 68 Indian cities, which will have a population of 1 million or more.
As a result of this boom, around 700-900 million square meters of residential and commercial space needs to be built, which is around the current size of the city of Chicago. To connect these spaces, 2.5 billion square meters of roads will have to be constructed, and 7,400 metros, subways will need to be developed – both equalling 20 times the capacity added in the past decade.
But to meet the increased demand , the country will need to focus its efforts on improving mass transit and this where the mobility game begins with a nascent market having immense potential. In addition to it, the newly posed transportation challenge post-Covid, coupled with stringent emission norms, has pushed the market into a tizzy looking for innovative mobility solutions based on futuristic needs.
Elon Musk and fellow investors in futuristic ventures have already set the ball rolling for innovative mobility solutions focusing on environment-friendly high-speed mass rapid transit systems and electric vehicles. Recently General Motors unveiled an electric car in a joint venture with a Chinese company when more and more Chinese companies are entering the electric car and long-range electric battery segment to tap the global market still in its infancy.
Reliance ups the ante in the global mobility market
Similarly, Ambanis appears to be looking beyond India’s future by focusing their investments into futuristic technology. The investment in skyTran is being seen as a paced-up effort to face Tesla, which currently dominates the sector. A neck-to-neck fight is expected in the future, both in India and other global markets between Tesla’s hyperloop project and other companies, including Reliance trying to come up with their own version of the same.
In his effort towards upping the ante in the game, the fresh investment by RSBVL is strategically held as skyTran is NASA incubated start-up. NASA uses Space Act agreements for partnering with the community, while start-ups such as skyTran benefit from such agreements as they get access to NASA’s resources, which help them develop original futuristic design and technology.