Mumbai: Every innovation starts in a garage,” declares S.B. ‘Ravi’ Pandit, chairman and group chief executive officer of KPIT Cummins Infosystems Ltd. Garages are certainly involved in the development story of his company’s innovation, which also happens to be a departure from software, its main area of expertise.
Viable alternative: (from left) Anup Sable, head (automotive and engineering); Ravi Pandit, chairman and group chief executive; and Kishor Patil, chief executive and managing director of KPIT Cummins. Hemant Patil / Mint
When the idea of Revolo first occurred to young KPIT Cummins engineer Tejas Kshatriya, he was actually stuck in Mumbai traffic en route to Pune, where the firm is based. What started as a thought back in 2008 evolved through trial and error into a system that can be retrofitted to any vehicle at an average cost of Rs1 lakh.
The kit consists of a motor, batteries and a pulley that can be installed in a span of about six hours by mechanics who will be trained by a joint venture that KPIT Cummins has formed with auto parts maker Bharat Forge Ltd. Revolo is meant to work best in typical stop-and-go city traffic and allow cars to cruise at about 30 km an hour in third gear without straining the engine.
Revolo works on the same principles as other hybrids, capturing kinetic energy that would otherwise be wasted when the brakes are applied. The pulley that helps turn the crankshaft is situated in the underbelly of the car and is connected to a motor under the hood. Power is transferred to three lead acid batteries in the boot that store the energy for later use.
Conventional hybrids have had a mixed reception in India. Honda’s Civic hybrids didn’t have too many takers at double the regular price. (The company eventually liquidated the stock it had at half price.) Currently, Toyota offers the Prius hybrid at Rs33.7 lakh ex-Mumbai.
“Revolo will be for the masses and is the first wave towards cheaper hybridization,” says Pandit in his first-floor office at the KPIT Cummins campus in Pune. Revolo is now undergoing road tests at the Automotive Research Association of India (Arai) in Pune and the news thus far is encouraging, he says. Fuel efficiency improves by 60%, while emissions are reduced by 35%, according to Arai tests cited by Pandit.
The Revolo kit for a Maruti 800 or its equivalent will be available at Rs65,000-70,000, Pandit says. For a 3-litre vehicle such as the Tata 207 light truck, the kit will cost about Rs1.5 lakh.
Revolo’s development cost is under $2 million (around Rs9 crore today), Pandit says, less than the $1 billion average development cost of a new car. The kit pays for itself in two years, at an average daily run of 50km, he adds.
The company has so far filed for 11 patents, a majority of the applications authored by Kshatriya.
KPIT Cummins’ founders Pandit and Kishor Patil were both chartered accountants with Pune-based accountancy firm Kirtane Pandit and Associates before they ventured into information technology (IT). KPIT Cummins was built as a niche IT firm with expertise in the automobile sector and ERP (enterprise resource planning) solutions. One of its start-up investors was billionaire Rakesh Jhunjhunwala, who has since exited with a handsome return on his investment, but maintains ties with the two promoters, according to Patil.
While as excited by innovation as any entrepreneur, Pandit and Patil also bring a keen auditor’s eye to business. So, will Revolo make money?
Pandit expects the trials and regulatory approvals to be completed by the end of this fiscal year. “We expect revenues to be between Rs300-500 crore next year, which would translate into selling between 30,000 and 50,000 kits in the next year, assuming an average price of Rs1 lakh per kit,” he says.
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Commercial production of the Revolo kit is expected to start in the next six months at KPIT Cummins’ 50:50 joint venture with Bharat Forge near Pune. KPIT’s founders have known the Kalyanis of Bharat Forge for about three decades.
Revolo is being offered first in the so-called after-market, which comprises 90% of the car population, rather than being pitched directly to auto makers.
The key is to show customers they can save money, says Chetan Maini, Mahindra Reva’s chief of technology and strategy, who himself introduced disruptive technology in the Indian market. Maini’s Reva, which was taken over by Mahindra and Mahindra Ltd in May this year, began selling electric cars in India in 2001.
“The biggest challenge is to show the benefits of the technology to the value-conscious consumers from Day 1,” Maini says. “The capital expenditure costs need to be kept low and the benefits need to be shown to the people early. A lot depends on how successfully the company can do this right at the start.”
So how has KPIT Cummins been able to keep costs low? A Revolo car doesn’t use batteries to start the engine. It also uses traditional lead acid batteries, which are cheaper than the lithium ion cells that other hybrids use.
In most other hybrids, “when the car starts, it runs only on batteries. That’s why they have larger bonnets as they need powerful batteries”, Pandit says. “Lithium ion makes it very expensive. In our case, the engine runs at all times and the battery power comes in selectively.”
The device has battery management software devised by KPIT Cummins and employs the kind of cells used in home inverters, he says. “Our solution is more electronically driven, so our costs are lower,” Pandit says.
Is Revolo’s technology comparable with that of other hybrid vehicles?
“I do not know the technical details of this product, but every company has its own hybrid technology,” Maini says. “Mahindra has its own hybrid vehicles. So, since every company has its own way to go, we see different products.”
Not everyone is sold on the innovation. Amit Kalyani, executive director at Bharat Forge, says his fellow board members from Germany were incredulous, especially at the low cost.
Among those who’re convinced about the product and have signed up to get their cars kitted out with Revolo are Bharat Forge’s independent directors S.D. Kulkarni, former chief executive of Larsen and Toubro Ltd, and Lalita Gupte, former joint managing director of ICICI Bank Ltd, Kalyani says.
Kshatriya, the engineer behind the concept, is being kept under wraps by the company, which rebuffed requests for meetings and photographs. When he got the go-ahead for the project two years ago, Kshatriya used his own Maruti Alto to develop the idea.
A team of four engineers was sanctioned for the project, which was kept separate from Crest, the research and development team set up by KPIT Cummins for projects such as a warning system that detects lane changes, and a vehicle tracking system. (Crest has a budget equivalent to 4-5% of annual profit.)
After several false starts, including the inability of the system to withstand the sudden surge in power when the brakes were applied, things began to fall in place.
If Revolo succeeds, Kalyani says Bharat Forge could enter the area of electrical components, perhaps become a battery manufacturer. Kalyani, a self-confessed “car nut” like father Baba Kalyani, says he will fit Revolo kits in Bharat Forge’s car fleet.
Meanwhile, KPIT Cummins’ frugal engineering methods have got the auto world’s attention and the company has been fielding calls for sharing the Revolo technology.
KPIT Cummins and Bharat Forge expect the government to chip in with some incentives, but Kalyani points out that no business proposition should be set up on the basis of government subsidies. “If it comes, it will be a bonus,” he says.
Maini believes hybrid and electric cars are the future for a country such as India, which imports most of its fuel. “The two biggest challenges for us are fuel shortage and climate change,” he says.
Given the poor efficiency levels of conventional engines, such alternative technologies will become more mainstream, Maini adds.