Less than a year ago, mired in mounting operational expenses, pathetic sales and cash flows, it was on the verge of closing down. Chetan Kumar Maini, deputy chairman and chief technology officer, Reva Electric Car Company (RECC), was prepared for the worst. His family-owned Maini Group, which had been keeping the Bangalore-based RECC afloat, could not possibly subsidise it forever.
This year, RECC plans to roll out more than one model — it already has five prototypes ready. “DFJ and GEF have provided us with a global perspective and strategic vision,” says Maini. DFJ, with $3.5 billion in capital commitments worldwide, has invested in electric sports car manufacturer Tesla, energy storage device manufacturer Deeya Energy and photovoltaic solar cells maker Konarka Technologies.
What went wrong in the past five years? In 1997-98, when Reva was in the final stages of conceptualisation, its makers factored in the prevailing government subsidy of Rs 1 lakh for electric cars. But, by the time it was introduced in 2001, it had been withdrawn. The price of the two-seater (Rs 2.5 lakh) was almost the same as that of a Maruti 800, India’s cheapest four-wheeler. The target customer segment — working women, professionals, college goers and the retired — was not impressed, even though the cost per km was as low as 40 paise. It had a top speed of about 60 km per hour and a range (distance it can travel on a single charge) of 80 km. Its staggered launch in Bangalore, Hyderabad, Pune, Delhi, and Ahmedabad went unnoticed. Currently, Reva is available only in Bangalore (RECC is the distributor) and in Ahmedabad (through another dealer).
In Europe, RECC test-marketed its product in 2003 and a UK-based company, Going Green, marketed Reva as G-Wiz in 2004. To date, it has sold more than 800 cars in London — the highest sales recorded by any electric car manufacturer in any city. Its price is competitive at euro 11,000 as against euro 15,000 of its competitor NICE’s Mega City developed by Aixam-Mega group of France. It also offers a better range — 75-80 km — than Mega City (see ‘Global Tally’).
RECC is currently test marketing in Greece, Spain, Japan, Australia, and Sri Lanka.
In India, it plans to unveil a new four-seater model by 2008 that will be comparable to an Alto or an Indica. At present, the cost of Reva is Rs 3.2 lakh on road and in the next five years, RECC expects to have a distribution network in place in the top 20 cities. Draper believes that Reva could become part of the big league electric car manufacturers that will include the likes of Toyota and Tesla. DFJ could also assist in facilitating technology transfer between Tesla and RECC.
Meanwhile, the Indian market appears to be showing an appetite for non-fossil cars. Toyota, which has so far sold 100,000 units of its gasoline-electric hybrid — Prius — globally, has already conducted a preliminary survey to study the viability of introducing it in India. As for RECC, the $20-million funding is going to serve as its bloodline. However, how far this re-engineering will change its fortunes depends on the success of its cars in Europe and, to a great extent, in India. It cannot afford to falter this time, else it will mean pulling the plug forever.
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