Home >companies >start-ups >Mahindra banks on start-ups to drive electric vehicle sales

Mumbai: Mahindra Reva Electric Vehicles Pvt. Ltd, the maker of E2O, a two-door small electric car, is set to get a boost from a clutch of start-ups that see untapped potential in the commercial application of electric vehicles in a country which is grappling to provide a sustainable urban transport solution to curb air pollution in over-congested cities. “We are working with a bunch of start-ups," said Arvind Mathew, chief executive, Mahindra Reva in an interview last week. Mathew did not identify all the firms or the order expected from each.

Cumulatively, these start-ups are set to order close to 1,250 cars from Mahindra Reva over the next 12 months as they seek to build on their green credentials and offer a cost-effective transport solution to their clientele, said officials at the aforementioned firms. The start-ups include Bangalore-based Lithium Urban Technologies Pvt. Ltd, a technology-based electric vehicle fleet company; Myles, the self drive company of Carzonrent India Pvt. Ltd; and Dreamz Mynewcar India Pvt. Ltd which runs online car sales portal mynewcar.in.

The order size, though small when compared to sales of regular car models, are a step forward for India’s only electric car company that has found little appeal in the personal transport space over the last several years. It sold 1,000 units in fiscal 2015-16. Mahindra entered the segment in 2010 with the acquisition of Chetan Maini-owned Reva Electric Car Co. It launched the E2O, the revamped Reva in March 2013. The sales however, have been less as an initial high cost of acquisition, high maintenance costs, lack of charging infrastructure and a limited battery range, among other factors, have deterred buyers from purchasing the car.

The E2O can seat four people and offers a range of up to 80 kilometres in a single charge of five hours. It plans to commence export of the model to the UK from June. Mahindra is set to launch the electric version of the Verito sedan later this month. It is also developing a complete portfolio of electric drive trains which can be strapped to Mahindra’s regular model line-up which run on conventional internal combustion engine. It also plans to commence export of the E2O to the United Kingdom from June this year.

Mahindra’s Mathew points out that electric vehicles being a niche category in India call for a completely different approach when it comes to marketing and selling it, and start-ups offer that scope. Therefore, a tie-up with a start up-like Lithium Urban helps. The two-year-old firm operates in the niche employee transportation space and uses all the parameters related to the vehicle, including rides, network, service, and maintenance on a cloud network.

The telematics in the E2O helps the owner communicate with the car from remote location via a smartphone. Lithium presently offers services to Tesco, Unisys and Total Environment and is in talks with others, said Ashwin Mahesh, co-founder Lithium Urban Technologies.

From the current 120 Mahindra E2Os, Lithium plans to augment the fleet to 250 by September as it signs up with more corporates and expands to Pune and the National Capital Region. Mahesh believes in India electric vehicles will find a greater merit in commercial application as compared to personal as a higher running and predictability of route gives the user more confidence. Lithium has set up charging infrastructure in the office premises of companies it caters to and at its own office to charge the vehicles.

Mathew said higher running of vehicles—150-plus kilometres a day—in the commercial segment lowers the operational costs making it more viable. Therefore, going forward, fleet application will become a large part of Mahindra Reva’s business. “The hub and spoke (a system of distribution where the car pool is managed out of a central location) models of offering services takes care of the anxiety related to range associated with electric vehicles," said Mathew.

Myles, a self drive car company, an arm of Carzonrent India, is looking to set up a dedicated vertical of green cars in its self drive fleet and plans to add close to 500 electric cars, the e-Verito and E2O from Mahindra Reva, said Rajiv Vij, managing director and chief executive at Carzonrent. The company already has 15 Mahindra E2Os in its fleet. “When you pay for only what you use, it helps you lower the overall cost of mobility," said Vij, adding that there’s too much being made about “the lack of infrastructure" for electric vehicles. It is not such a big issue as on an average one doesn’t travel for more than 60-80 kilometres in a day. “One can travel that distance in one single charge of Mahindra E2O," he said.

Last month, Dreamz Mynewcar that runs the multi-brand online showroom for cars, tied up with Gurgaon-based Lynx Green Ventures and Gurgaon Green Miles. As part of the deal, Dreamz will be delivering close to 500 Mahindra E2Os to the two firms, which plan to launch electric cab fleet services by May end, said Ankit Momaya, head marketing at Mynewcar. The company has also been selling the model to other institutional buyers through its portal.

To be sure, sensing a growing opportunity for electric vehicles, Mahindra is working on developing a complete portfolio of electric drive train that can be used in the company’s other model line-up which are powered by the conventional gasoline and petrol engines, said Mathew. This would include models in its light commercial vehicle line-up.

The government’s National Electric Mobility Mission Plan (NEMMP) intends to put seven million electric and hybrid vehicles on the road by 2020. Sales of electric two-wheelers and cars have been rising at a rapid pace after the government rolled out a subsidy scheme—FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles) in April 2015—as part of the NEMMP. As part of the subsidy scheme, depending on the speed and efficiency of the vehicles, buyers of electric and hybrid vehicles have been getting an upfront discount equal to one-third of the difference between the price of that particular vehicle and a comparable petrol model.

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