Reva Electric Vehicle Company
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History
2001- 2021
Malini Goyal, Nov 18, 2021: The Times of India
Talk about electric vehicles or EVs today and the only name that will come up is likely to be Elon Musk. But 20 years ago, two years before Tesla was founded and seven years before the first Tesla car was launched, India had EVs on the roads. In 2001, Chetan Maini, founder of Reva Electric Vehicle Company, launched what was then the world’s most affordable city electric car. It was a quirky-looking vehicle, but gained something like a cult following. Today, Tesla is in the $1-trillion club, Musk is a celebrity, every big carmaker wants an EV in their stable and Reva is all but forgotten.
Maini, however, hasn’t forgotten Reva or his dream of an electric future. Sitting in his Whitefield office in Bengaluru, Maini is in the process of building an EV ecosystem that will promote adoption of EVs in India; he’s talking of everything from battery-swapping technology and infrastructure to partnerships with original equipment manufacturers and corporate consumers. How is this second coming different, I ask him. “This time there is a sense of realism,” he says. He now has “a good understanding of the complexity, and how to build technology, team and the company. The Reva experience has been valuable.”
In 2010, Maini sold a controlling stake in Reva to the Mahindra group, which has since launched a few variants of the original. Mahindra has announced its plan to launch some 16 EV models in India by 2027. Maini, meanwhile, turned his attention to the entire EV ecosystem — moving away from just cars.
The journey from Reva
In 2016, Maini co-promoted Lithium Urban Technologies, now India’s largest EV fleet provider to companies. In 2017, he co-founded SUN Mobility, a company that is building an entire EV-focused ecosystem to accelerate mass usage of electric mobility in India.
What exactly is SUN Mobility about, I ask Maini. He begins by talking about the multiple problems with EVs today. There’s the issue of range anxiety, he says, talking about the fact that many people are afraid they’ll be stranded in the middle of nowhere There’s also the prohibitive cost of batteries for these vehicles. Ravi Bhatia of JATO Dynamics, a global supplier of automotive business intelligence, agrees that cost is a huge part of why EVs haven’t been selling well in India. “The demand for EVs in India is soaring but the volumes are still marginal. India is not yet on the global radar for EVs because it is still a market strongly dependent on cheap cars, leaving very little space for more expensive ones.” The numbers bear him out.
Maini agrees that India is way behind much of the world in EV adoption. “It depends from segment to segment,” he says. “But at a very macro level, India is 3-5 years behind.” He explains that in 2001, China had 40,000 electric scooters, today it has over 30 million. “In 2008, it began pushing electric in virtually every segment. And today, penetration there is very good,” he says. Today Shenzhen has 16,000-plus electric buses and 22,000-plus electric taxis, and there are hundreds of companies making cells and packs. “India has none.”
Late adoption and the race to catch up
Most countries have been pushing EVs for at least a decade now.
India, despite an early-mover advantage by Maini’s Reva, has begun actively promoting EVs only in the past couple of years. And that has already borne fruit. In the loader three-wheeler section, says Maini, EV penetration has gone up from 1% earlier this year to 10% now, thanks to the big push by e-commerce companies. In two-wheelers, the entry of newbie Ola Electric and others like Ather Energy and Ampere Vehicles is revving up the market, even as petrol-focused players like Honda Motors and Hero Motocorp make electric part of their strategy.
In four-wheelers, both Tata Motors and Mahindra are shifting gears, Maini sees a very slow shift. In a value conscious market like India where most cars sold are in the under Rs 10 lakh segment, Maini says high battery costs will constrain its adoption. That’s one of the reasons why there’s no Indian player among the top EV manufacturers.
However, Maini is optimistic. “In the next 36-48 months, we will begin to see some reasonable growth in India,” he says. Maini says that since about 85% of India moves on two-wheelers, three-wheelers, e-rickshaw and buses, any EV play must touch these segments. “We are solving all these problems by offering mobility as a service,” he says.
SUN Mobility is putting its battery swapping-business model at the heart of its EV strategy. In an electric vehicle, the battery cost is 50-60% of the total cost. SUN’s plan is to offer a ‘battery-as-a-service’ model to make EVs affordable. What that means is that a customer can buy a vehicle without the battery cost and then pay for the battery as a monthly subscription. For now, Maini says he is targeting two- and three-wheelers and e-rickshaws whose battery he says can be changed within 30 seconds at its swap stations. In 2020, SUN Mobility partnered with oil PSU IOCL to set up a battery-swapping facility. It also partnered with Bosch, offering the German multinational 26% of stake in SUN Mobility. This year, Maini has tied up with Tata Power-DDL to set up a network of battery-swap points, announced with last-mile delivery company Zyngo. It has also entered into an exclusive partnership with Piaggio for three-wheelers. “We want to offer electric mobility as a service and hope to have one million vehicles on our platform by 2025,” Maini says.
Need for support
While companies like SUN offer specific solutions, there is a need for consistent and long-term policy changes to promote the use of EVs. It’s not that the government has been idle. Maini says that government policies have played an important role in catalysing demand and pushing wider adoption of EVs through multiple nudges and incentives for setting up infrastructure from charging to battery manufacturing.
The government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme has been extended till 2024. The scheme, started in 2019 to promote the sale of EVs, was to end in 2022. Under this scheme, the government offers a Rs 40,000-60,000 subsidy on electric two-wheelers.
That’s not nearly enough, says Maini. “We don’t have a long-term consistent policy that can help companies make long-term decisions,” he says. There are many policy gaps. For example, while e-bikes get FAME subsidy, those with swappable batteries don’t get any. “The government has said you can sell vehicles without a battery, but its subsidy policy does not support it,” he says. Similarly, EVs attract 5% GST, but if a customer opts for ‘battery as a service’ the vehicle falls into the 18% GST slab. Besides, different states have very different policies (for example subsidies vary between states), complicating things for buyers and manufacturers.
Looking back, moving ahead
Would Reva have done better if Maini had received more government support 10 years ago? “So many pieces of the puzzle were missing,” says Maini, referring to the lack of an EV infrastructure. “I was very young, very naïve. But I was also ahead of the time.”
Given the benefit of hindsight, would he have done anything different? A couple of things, he says. One, he would have raised money a lot earlier. Back then, he bootstrapped the company and ran it on a shoestring budget for a long time. Had he allowed investors to participate, who knows how Reva would have done? The other thing he would have done differently, he says, is to have pushed a global strategy. Remember, Tesla’s cars were not in existence when the Reva was on the roads. Maini back then received a lot of global demand, but he did not have a robust global strategy in place.
His SUN Mobility strategy seems far more clear. He’s putting all the pieces in place from components to off-the-shelf EV technologies, regulatory framework to investor capital.
The other advantage for him is that consumers are looking seriously at EVs, thanks to high fuel costs. “In each area of technology, finance, consumer, investor and vendor ecosystem, things are falling in place. It has a game changing impact,” he says.
