Simple Energy inks MoU with Tamil Nadu for Rs 2,500 crore e-scooter plant

by Nilesh Wadhwa 08 Dec 2021


Bangalore-based electric two-wheeler company Simple Energy has signed an MoU with the Tamil Nadu government for an investment of up to Rs 2,500 crore for constructing the largest electric two-wheeler manufacturing plant in Dharampuri.

As part of Phase 1, the first plant of 200,000 square feet is being constructed near Shoolagiri (Hosur) and has the capacity of upto a million production units per year and is slated to be operational by early 2022. In addition, it plans to make an initial investment of Rs 1,000 crore to build its second plant (as part of Phase 2) in 600 acres of land and intends to open the second factory by 2023.

By investing in the second plant, the company wants to establish its intent to build an EV ecosystem in the state, that would also have a R&D centre, testing facility and a vendor park.

Suhas Rajkumar, founder and CEO of Simple Energy, said “Tamil Nadu gave us the confidence in creating the EV ecosystem which can be sustainable in achieving our long-term goals. With the MoU, we commit to leading the Indian E2W market in India by setting up a resourceful ecosystem that will help the country’s vision to lower carbon footprints at a faster pace. Simple Energy will thus redefine electric mobility in India."

Raghunath Subramanian, Chairman of UiPath India and Investor in UK battery maker, Britishvolt and the board member of Simple Energy said, “Simple Energy has taken a big step in taking the Indian EV industry forward. With this step, we hope to amplify the country's efforts to promote the tech and auto industries to a global level and compete with global legacy players.”

Pooja Kulkarni IAS, MD and CEO, Guidance, Tamil Nadu said, "The electric vehicle industry is growing in popularity throughout the world. The MoU with Simple Energy is to create a facility that will broaden and deepen the E2W market. We hope that the partnership with Tamil Nadu will help them become a global player, benefiting the local ecosystem.

When queried about the source of funding, Rajkumar told Autocar Professional that the company has already got commitments from its existing investors and was also planning to raise “triple-digit million dollars by March 2022” in Series A funding.

Interesting to note is the fact that the start-up has raised around Rs 170 crore till date, including Rs 155 crore in pre-Series A funding last month.

In terms of manufacturing capacity, the company says it while it will be future-ready with a million-unit capacity per annum, “the idea is to start with 100,000 units per annum and depending on the market response it will adjust the output.”

On August 15, Simple Energy launched its flagship scooter the ‘Simple One’, while the deliveries have been delayed (originally scheduled for festive season October-November) it is expected to begin in ‘early 2022’. Rajkumar says the company will soon announce the revised schedule and aim to start deliveries soon. “We want to ensure that the customer can purchase the Simple One immediately after the test ride. We don’t want them to wait for months after trying out the e-scooter,” said Rajkumar.

E-scooter for B2B market coming soon
The e-scooter market is currently witnessing maximum sales momentum from low-speed e-scooters, mainly due to the e-commerce boom and demand for last-mile delivery. Simple Energy is eyeing this segment and plans to launch a low-speed e-scooter and a B2B e-scooter with detachable battery.

The Indian electric two-wheeler market lacks a common charging standard, which has been affecting the potential uptake of e-two-wheeler sales. Commenting on this aspect, Rajkumar says he “is in favour of the same and there could be an exciting announcement around it soon.”

With the announcement of this MoU, the company would want to invest in world-class production capabilities not just for the Indian market, but also for exports to eventually create more than 12,000 direct and indirect jobs. Simple Energy also aims at reducing dependence on imports and increase its focus on localisation of parts. s all know, that's the mantra for achieving cost competitiveness, which is so vital for success in a value-conscious market like India.