The Indian car market is expected to grow to four million units per year by 2015, thus increasing the car penetration per 1000 people substantially. This will translate into higher petrol and diesel demand coupled with scarcity and increase in price of these fuels. Another major concern would be the energy security of nations being threatened due to geopolitical reasons. These factors along with urban migration and increasing noise and air pollution levels make it imperative that we explore alternative mobility options like electric cars. We can no longer afford conventional fuel cars.
A study by Frost & Sullivan has estimated that by 2020 electric vehicles (EVs) will constitute 10 percent of passenger car sales. The activity in the EV industry has increased substantially to respond to this accelerating change in mobility. Every major automobile manufacturer today has announced an EV venture. Last year 42 EVs, including the new Reva NXG and NXR, were displayed at the Frankfurt Motor Show. EVs from Nissan and Mitsubishi are expected as early as this year end while Volkswagen, Hyundai and Toyota are expected to roll out theirs by 2012-2013.
Many countries are providing incentives to encourage the growth of the nascent EV industry. In the US, President Obama’s administration is giving ample emphasis on promoting EVs and $2.4 billion stimulus funds for batteries and EVs were announced last year. Britain has also announced plans to make the country ‘green’. In 2011, the British government will begin to grant loans up to £ 5,000 (Rs 4 lakh) to citizens who plan to buy electric cars.
The mayor of London has unveiled plans to turn London into the electric car capital of Europe by installing 25,000 charging ports in the city and creation of 400,000 jobs in ‘green industries’. And starting July 1, 2010, drivers who purchase plug-in hybrids or pure electric vehicles will qualify for between $4,000 and $10,000 in incentives in Ontario, Canada. In India, the Delhi government provides a 29.5 percent subsidy to customers who purchase an electric car.
These developments are very exciting for us since we started operations at a time when the EV concept was very new to most people. The first Reva rolled out in 2001 in India; today we are present in 24 countries, with over 3500 cars on road. We have cars operating in regions that touch -20deg C to places that heat up to 45deg C. Our customers are change leaders who believe in greener mobility and have formed communities worldwide to share their knowledge and evangelise change.
Our current model – the Reva-i – has found loyalists across the world, who have found it easy to drive and manoeuvre in congested city traffic while decreasing their carbon footprint. Our typical customer buys the Reva as a second car in the household in a city environ and is conscious of the environment.
Reva's business model
Reva Electric Car Company (RECC) is today an ‘Insights, Ideas and Technology’ company gearing up for the growth ahead. We have a four- quadrant business model (product development, technology licensing, franchised manufacturing and mobility solutions) approach to advance the growth of EVs.
We have worked on improving EV technologies and have 10 patents in the field. The computers on board Reva cars have helped us make these improvements by providing a wealth of information about performance and behaviour of batteries in various conditions.
Our cars also include unique user-friendly features developed through customer feedback. REVive – the remote emergency charge feature launched for the first time in the world – addresses range anxiety in EV users. If a customer runs out of charge, he/she can telephone or SMS the Reva customer support centre, which remotely activates a reserve that allows the user to continue driving. The advanced telematics feature assesses the car’s batteries remotely to determine the amount of reserve that can
be safely released without harming the battery life and the user can be alerted on parameters such as distance-to-empty and time-to-full charge. The user can also remotely pre-heat or pre-cool the car cabin, get monthly updates on driving behaviour and tips on how to save more energy while driving.
To promote wider use of its EV technologies, Reva is also exploring the technology licensing route to increase the reach of affordable EVs. The partnership with General Motors in India is an example of licensing EV technology. Today, the Reva-GM collaboration is setting a trend in the EV market to increase the scale of the industry.
This will enable the Indian market to see availability of EV choice to consumers with minimal time and lesser resource deployment from production to sales, denoting a win-win situation for all. In the long run, this new way of working will result in EVs being made more affordable to the end consumer along with increased product offerings from the Reva stable with non-conflicting partnerships.
Our vision to make EVs globally available has also resulted in franchised manufacturing shaping up as a business expansion model. With this, a local entrepreneur can build a manufacturing facility to assemble Reva cars, given that our cars are built on the running chassis model and therefore make business sense to import and put together. Reva will support the local partner in establishing the assembly plant, quality control, distribution and aftersales service. However, we believe that the local government’s support will be an important catalyst in the success of franchised manufacturing.
This model completely changes the industry paradigm from large capital-intensive centralised manufacturing plants to distributed, low-cost, localised manufacturing plants set up around the world. As a result, now even small countries can have their own electric car manufacturing tuned to their local needs, positively impacting job creation and upscale in the economy.
We are bullish in our approach to expand franchised manufacturing and believe the customer will have access to EVs in line with their environment commitments, regardless of where they are located globally.
We are also working closely on a fourth aspect of the business model – mobility solutions with local and international governments to develop ultra-low carbon technologies and projects from energy management systems, telematics and remote diagnostics to ideas for electrifying fleets. This will also include working with governments and/or private parties to provide an adequate charging and maintenance infrastructure. One such initiative is our recent tie-up with BSES Yamuna Power Ltd to set up 100 free charge ports for EV users in New Delhi.
As we move towards the mass market for electric cars, Reva will adhere to its principle of not producing a polluting car. The new NXR and the NXG will be produced in Reva’s new ultra-low carbon assembly plant in Bangalore that is being built to IGBC (India Green Building Council) guidelines. Among other things, the plant harvests rainwater, uses natural light and ventilation, and employs solar energy for electricity and heating. Since Reva cars are powered purely by electricity without a tailpipe, they produce zero harmful emissions. They can be charged using electricity off the grid and wherever possible from renewable sources, making them among the cleanest production cars available anywhere in the world echoing with our ‘Born Green’ philosophy.
The way forward
As all the key players – governments, suppliers, individuals and institutions – come together, a significant change in mobility towards green will be an obvious outcome.
We perceive that the rate of adoption of EVs will be beyond the estimates currently doing the rounds in the automotive sector. As the volumes increase and battery technologies advance, costs will come down in the next three to five years furthering a wider adoption.
New usage models such as battery leasing, pay per use and incentives from governments (allowing EVs in bus lanes and introduction of polluter pay policies) will all work towards making the coming decade in automobiles the decade of electric cars.