Lithium Urban Technologies is part of a small but growing tribe of e-vehicle brands that are trying to wrest the initiative from traditional ride-hailing services, riding on government sops and consumer desire to reduce his carbon footprint. It claims to offer a customer a 40 per cent cheaper ride.
Gurugram-based Blu Smart is another. It is looking to reinvent mobility by bringing together a whole range of services — ride sharing, car sharing and shared charging — under a single platform. “It is time to simplify smart mobility. Blu Smart’s innovative CarSharing platform will be the Netflix of car sharing, a subscription model for premium electric cars, different than the Ola and Uber models,” says Punit Goyal, co-founder, Blu Smart Mobility. Cheaper tariff and a more modern car ride are the two vital promises on which it hopes to build its business.
Five prerequisites to drive scale
Product availability: Greater availability of EVs either through more production in India or easier imports
Universal charging points: That can be used by cars with different charging protocol
Optimum utilisation of charging infrastructure: This can be done through shared charging stations
Power trading: Flexibility in power sale and purchase which could come through open access
Creating awareness: There are 5000+ electric cars already on road so this can be used to enhance awareness
Lithium’s Krishnan says while the upfront costs of owning an electric vehicle is higher than that of internal combustion cars that run on conventional fuels, the operating costs are much less, slashing the transportation cost. Diesel and petrol cars cost around Rs 5 a km in comparison to electric that costs Re 1. “In order to ensure the benefits of lower operating cost, Lithium uses it proprietary routing and scheduling algorithm and efficient operations to increase productivity per vehicle. On an average, Lithium electric cars
run 250-300 km per day. We pass this on to our customers,” he adds.
Post-BS VI implementation in April 2020, diesel vehicle prices will increase by at least a lakh rupees and so will the fuel cost, estimate experts. “Electric vehicle prices will, however, come down as battery prices come down and volumes ramp up. This will further increase the profitability gap between current diesel/CNG users and electric vehicle users,” says Krishnan.
No surprise then that he is hoping for a rapid switchover by customers thereafter.
For Blu Smart, the competitive and strategic edge over Ola and Uber will come from its service bouquet since it deploys, manages, operates and controls the fleet. The company defines the routes of operation and ensures that drivers cannot reject and cancel the rides while customer can choose to cancel the ride. “Besides, we do not have any surge pricing and offer competitive pricing backed by lower operational and lower fuel costs,” says Goyal. While Blu Smart is both into direct taxi service and tie-ups with corporate clients, Lithium is into corporate employee transportation.
Crucial for scaling up this business will be the greater availability of EVs, either through more production in India or imports. This, according to Lithium, would give flexibility in operations and deployment for multiple usages.
Important for optimisation of fleet is adequate charging of cars which comes from ownership and sharing of infrastructure. Availability of power through open access and resale by fleet operators could bring in flexibility, too.
Krishnan says easier financing by declaring EV as priority sector could help access finance for the purchase of vehicles and setting up charging stations. Though several states have come up with their EV policy, there are challenges in getting subsidy. Lithium, for example, has not received subsidy from the Maharashtra government although the state announced the policy a year back.
Operators, says Blu Smart’s Goyal, need to focus on providing flexibility, sustainability and unconditional availability. For this, data will be key. “The smartphone will be the anchor point to control these services. Intelligent and connected all-electric mobility will solve urban mobility challenges,” says Goyal.
The evolution of successful business models in electric mobility, as electric vehicles
gain ground and BS VI norms for internal combustion vehicles come into place, will separate the men from the boys in the sector.