Bitten by the electric bug: Start-ups charge up for e-vehicle push

Photo: Shutterstock
Tarun Mehta, the 28-year-old co-founder of Ather Energy, is set to commercially launch his electric scooter by the first half of next year. For Mehta and his 270-odd product development team, it has, of course, been a gruelling experience to build a vehicle from the ground up, including the battery, with hardly any mature vendors available for support.

But armed with over 30 applications for patents, Ather Energy is putting together a plan to take the next big step — to manufacture the product at Bengaluru. Says Mehta: “We are working with around 120-130 vendors and are setting up a manufacturing plant with a capacity to produce 30,000 scooters per annum.”

Mehta will sell his scooters in a non-traditional way — there will be no distributors, but customers can pre-book online. And, to provide comfort to its customers, the company is planning to invest in putting up its own charging stations, at least 4 km from each other in the cities it sells its vehicles.  

Ather Energy could already be the envy of many start-ups looking for funding. It has already raised Rs 275 crore from a diverse group of investors, which include Tiger Global, Flipkart founders Sachin and Binny Bansal, Mehta’s alma mater IIT Madras, and automobile giant Hero MotoCorp.

Ather Energy is not alone. A bevy of Indian start-up entrepreneurs are developing products and solutions —from scooters and motorcycles, lithium-ion batteries to running a fleet of cars — for the coming electric vehicle revolution. And they are being backed by private equity funds, automobile and auto component players, high net worth individuals and even cab aggregators.

For Kapil Shelke, founder of the Pune-based Tork Motorcycles, his tryst with electric vehicles started as a project in college. Combined with his love for racing — he participated and won in a global electric bike racing championship in the Isle of Man — the electric bug took him to work in Zongshen, a major bike player in China, where he designed drive trains for their electric motorcycles.

His next port of call was to leverage his learnings for India and build a product to suit its needs. Of course, he was able to raise undisclosed funds from some angel investors as well as Ola founder Bhavish Aggarwal to start the venture. And he will be looking to raise more money to assemble the product. Says Shelke: “We have a first-mover advantage as everyone is looking at electric scooters to begin with, while we are building an electric bike.”

To attract customers, Tork Motorcycles wants to push three key features of the bike. The company has built an in-house battery that has a life of 100,000 km, which is enough for a five-six year run. Shelke says the USP is that customers will not need to change the battery during the lifetime of the bike. Second, as motorcycle riders like speed, he is offering a top speed of 100 km an hour, which is also the capacity of the battery on a single charge. Third, Shelke says one reason for customers not shifting from scooters to motorcycles is that they have to deal with manual gears. His bike will have automated gears.

Not everyone is looking at vehicle manufacturing, however. Pune-based ION Energy founded by 25-year-old commerce graduate Akhil Aryan is building lithium-ion batteries and plans to partner with OEMs. After all, batteries constitute 40-50 per cent of an electric vehicle’s cost. Aryan has already raised angel funding from Nippo Batteries, Sushil Jiwarajka, chairman of OMC Power, and founders of Haptik, a free personal assistant application in which he was part of the initial team. He is now in the process of raising another $3-5 million of funding very soon as they they go in production. 

He says that through R&D his company has been able to reduce the cost of the battery by a sixth in the last 18 months. The batteries can be used for different applications,  in a vehicle and also in an inverter for power backup.

In Bengaluru, Sanjay Krishnan, founder of Lithium Urban Technologies, plunged into setting up a fleet of electric vehicles in 2014, and currently has the largest such fleet outside China. He has already raised around Rs 15-18 crore from angel investors. Says Krishnan: “We looked at a sector where the business would be commercially viable and realised there was a market in catering to corporates. In Bengaluru, for instance, there are 60,000 cars in use to take care of the needs of IT sector travel alone, which is bigger than Ola and Uber put together.”

Lithium runs a fleet of 400 electric cars powered by Mahindra Mobility vehicles in Bengaluru and Delhi for nearly a dozen-odd clients and the target is to add 500-1,000 more cars in the next 12 months. Krishnan, an engineering graduate who has worked in Honeywell as well as helped in setting up Comfort India, the country’s first private urban public transportation venture, points out that corporates save 15-30 per cent in terms of their travel bills, so it is an attractive proposition. And while the cost of acquiring the car is three times more than that of a gasoline car, the running cost per km is a fifth of that of a petrol-driven car. As these cars run about 250 km a day, you save money from the third to the fifth year compared to a gasoline vehicle.

Lithium is, of course, creating its own charging infrastructure to support vehicles. It is planning to set up 60 fast charging stations in Delhi, which will take 70 minutes for a battery to be charged. And it is also planning to move to other cities, which include Chennai, Pune and Hyderabad. To do so, it requires a fresh round of funding and it is looking at raising about $25 million as institutional funding for the next big push.

But will the new products meet the consumer test of price, ease of charging, new digital features and low maintenance costs? Parveen Kharb, founder of Gurgaon-based Twenty Two Motors, which has already raised over $1.6 million from an undisclosed auto component manufacturer, says his scooter will be priced in the range of an Activa. But the company has put in embedded artificial intelligence by which riders can use mobiles to receive warnings when the battery is low, information on the nearest charging station and diagnostic details so that maintenance can be undertaken. “The scooter will offer much more value than a gasoline scooter. And just like in a mobile phone, our scooters can be charged at home on a normal plug at night and you will not even bother with the price,” says Kharb.

But Ather Energy’s scooters are not going to be cheap, these will be priced closer to a Vespa at Rs 1-1.25 lakh a piece. Yet Mehta points out that the running costs will be much lower. Compared to around Rs 16,000 that an average rider spends annually on fuel in a gasoline scooter, a rider of an electric scooter has to fork out a mere Rs 2,000 on electricity. So the total cost of ownership will be at least Rs 40,000 lower over a three- to five-year period, compared to a gasoline alternative. Similarly, Tork Motorcycles also expects to sell about 5,000 bikes a year at a price of Rs 1.25 lakh, initially in Delhi, Pune and Bengaluru. But Shelke says that customers have to see it as buying a piece of technology rather than just a bike. “While the upfront cost looks higher, the overall cost of our bike will be the same as a 100cc bike, which includes its EMI, cost of running and maintenance. In the case of our bike, the cost of running and maintenance is negligible.”

Surely with technology becoming the key element in the making of electric vehicles, many of these start-ups could change the country’s automobile road map.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel