2018-10-26
From IKEA To Swiggy, How This Indian Startup Is Driving Electric Vehicle Adoption In India

If you want to sell electric vehicles (EVs), India looks like a great place to start. The country's billion-plus citizens live in 14 out of the 20 most polluted cities in the world, according to WHO, gasoline already costs more than $5 a gallon, and the price only seems to keep rising. India's EV market, meanwhile, is projected to grow at a compound annual growth rate of over 37% in the next five years, and 87% of drivers have indicated that they are ready to make the switch to EVs. Aiming to capitalize on the growth, brothers Rahul and Raja Gayam partnered with their friend Sri Harsha Bavirisetty in 2011 to launch EV maker Gayam Motor Works (GMW) in Hyderabad.

In the last three years, GMW, which staked out its position in the market with the world’s first electric auto-rickshaws and an innovative battery-swapping technology, has sold over 5,000 vehicles to more than 15 countries, including Bangladesh, Sri Lanka, the U.S., Singapore, Hong Kong, Japan and Philippines.

“India is the biggest producer and exporter of auto-rickshaws across the globe, and over 45 million rides are being taken daily by commuters in India on auto-rickshaws,” says Rahul, who was featured on this year’s Forbes 30 Under 30 Asia. “While large automobile companies are focusing on electric cars and bikes, we saw a huge opportunity in the electric three-wheeler space.”

Greening the transport system

The Gayam brothers launched GMW with a bold goal: To help end the auto industry’s reliance on oil. “The transport sector is a major consumer of oil, causing 50% of carbon pollution in the country,” says Rahul. “Switching to an electric fleet can help reduce 1 gigaton of carbon emissions and save India $330 billion by not purchasing 876 million metric tons of oil.”

Since 2015, the bootstrapped startup has invested nearly $5 million into the business, and is now looking to raise $15 million in Series A funding to build charging infrastructure, create a battery and dealership network, fund production automation and R&D. “We plan to enter the retail market by the end of year, and are already doing pilots with passenger vehicles and battery swapping in Hyderabad.”

Its three-wheelers, which are said to operate at about one-seventh of the cost of petrol vehicles, are already used by e-commerce businesses like Flipkart, Gati, BigBasket and Grofers for last mile deliveries, while southern states Andhra Pradesh and Telangana have employed them for waste pick-up and disposal. Its electric bikes are being used by Uber Eats in Singapore, Hong Kong and San Francisco. “In India, our bikes are being piloted by Swiggy, and public and private e-bike sharing programs,” says Bavirisetty.

Recently, IKEA, which is betting big on India’s emerging EV growth story, has been deploying GMW electric auto-rickshaws for home delivery in Hyderabad as part of its plan to deploy a wholly electric fleet by 2023. “IKEA is building charging infrastructure in their warehouses to promote EVs for delivery and employee commutes,” says Bavirisetty. “This is a huge boost for the EV ecosystem in India, an example for other corporates to adopt sustainable initiatives.”

Innovative solution to problems

What is exciting about GMW is its solution to the two big problems with electric vehicles: You can’t drive them very far on a single charge, and the costs of the batteries are relatively high.

The GMW solution is to literally separate the battery from the car. To make refueling convenient, it developed lithium-ion batteries that can be swapped with fully charged ones in less than a minute. “Right now, we are doing this manually, but we have plans to fully automate the service,” says Bavirisetty. By retaining ownership of the battery, GMW is able to reduce the sticker price of the three-wheeler, and upgrade the battery as the technology improves.

“Our three-wheelers are connected to mobile and cloud through IoT technology, and they are as easy to use as regular vehicles for urban mobility,” says Bavirisetty. “The vehicle’s running cost is as low as Rs 0.50 per kilometer ($0.0067), and offers a range of up to 110 km per charge.”

Tellingly, even as most legacy carmakers are chalking out their EV plans in India, GMW is taking the lead in creating an EV ecosystem in the country. By end of 2019, Rahul says, the company plans to sell 10,000 auto-rickshaws and set up 50 battery-swapping stations. “We will expand our reach to rest of India in a phased manner.”

“Our proprietary drivetrain system, over five years of R&D, and our real-time vehicle and battery monitoring system gives us the edge over others in the ecosystem,” adds Rahul, who considers Mahindra Electric, Kinetic, and Lohia Autos as the main competitors of GMW.

Challenges in EV industry

The EV industry in India is still at a nascent stage. Although India aims to have more than 30% of its vehicles running on electricity by 2030, speed bumps remain. The EV market in India was comprised of about 25,000 units at the end of 2016-17, according to the Society of Manufacturers of Electric Vehicles (SMEV), and a recent report from Bloomberg New Energy Finance suggests that electric vehicles will likely form 7% of the new car sales in India by 2030.

These are positive signs, says Rahul, but to replace the 230 million vehicles on roads is a mighty challenge. “India lacks charging infrastructure, technical engineers with expertise in batteries, motors, and power electronics, and regulations to create the EV ecosystem.”

Transitioning to electric transport in India will take time, but innovators, suppliers and regulators, Rahul says, must work together to evolve new business models for successful adoption. “This will help in bringing about a paradigm shift in how people in India perceive and use transportation.”

Source- Forbes