Pollution levels are rising across the globe with CO2 emissions at alarming levels. In fact, the December 2015 Paris Agreement also recognized the need to limit global average temperature increase below 2°C. And this objective can only be achieved by reducing greenhouse gas (GHG) emissions – a major reason for global surge in temperatures.
According to a report by the International Energy Agency on the global outlook for electric vehicles in 2016, the transport sector accounts for about a quarter (23%) of global energy-related GHG emissions. The agency further indicates that globally, the transportation sector must contribute about one-fifth of the total reduction of GHG emissions from energy use in 2050.
At a time like this, electric vehicles are being seen as a major contributor to reducing global temperatures. However, high costs and lack of range in electrical vehicles is causing them to fail in the early 20th century.
However, a sharp fall in Lithium-ion batteries has been driving growth of electric vehicles. According to a research by Technavio, a few years ago, the cost of Li-ion batteries was nearly six times more than that of lead acid batteries and nearly four times more than that of nickel-metal hydride (NiMH) batteries.
In the past decade or two, several automobile majors have begun making and selling electric cars, starting with Toyota Prius in 1997 and Tesla Motors in 2006.
In India, electric vehicles are growing with home-grown companies like Mahindra, too venturing into this segment. In fact, sales of electric vehicles in India grew by 37.5% to 22,000 units in FY17, of which only 2000 units were four-wheelers. The government, too has proposed the FAME-India (Faster Adoption and Manufacturing of (hybrid &) Electric vehicles in India) scheme, which is intended to support the market for hybrid/electric vehicles.
When Rahul Gayam returned from US after working in the clean energy space there, he wanted to also tap into the growing electric vehicles (EV) market. His brother Raja Gayam ran Gayam Motor Works in Hyderabad, an auto rickshaw manufacturing and export business since 2010 and the brothers saw a great business opportunity in this.
The combination was perfect - Raja’s experience in automobile sourcing and manufacturing coupled with Rahul’s experience in the clean energy space and his work on developing Ceramic Super-capacitors which have the potential to replace batteries in electric vehicles. They shifted to making electric vehicles.
Gayam Motor Works (GMW) was already making electric auto rickshaws running on lead-acid batteries since 2012. It also partnered with Terra Motors, Japan to export e-rickshaws to them. The concept of e-rickshaws wasn’t new to the Indian market. They are being used in Gurugram and a few other places. However, the lead-acid-battery run e-rickshaws have a maximum speed of only 22-25 kmph. The load capacity is also relatively low.
Several years of intense R&D efforts went into working on vehicles that can run on lithium-ion batteries, a quadra-drive system, a smart battery management system and an integrated cooling system.
Around late 2014 to early 2015, their prototype of a Tata Nano converted into a battery-powered vehicle was ready.
After testing this in controlled environments, in mid-2015, the duo launched their first electric vehicle built from scratch with lithium-ion batteries – the Smart Auto.
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The Lithium ion battery that goes into these rickshaws is similar to what goes into our mobile phones. These make the Smart Auto almost as powerful as the diesel rickshaws that run on the roads today. Unlike rickshaws with lead-acid batteries, the Smart Auto gives a maximum speed of 55 kmph and can run 100 km on a single charge.
As against diesel rickshaws which have a running cost of Rs 3.5/km, the Smart Auto has a running cost of only Rs 0.50/km.
However, once the Smart Auto was built, the duo faced two major challenges. First, to run e-rickshaws that are as powerful as theirs, a Government Order (GO) had to be obtained from the state governments. “There are many departments involved in passing such a GO. It exists in Gurugram and a few other states but not in AP, Telangana or Karnataka. We are putting in the required efforts to get a GO passed from various state governments,” says Harsha Bavirisetty, COO, Gayam Motor Works.
Another major challenge the brothers saw in launching a consumer vehicle in India, was the lack of proper charging infrastructure. Unlike countries like the US and China where there has been a lot of push even from private players, there is a long way before India can have a suitable charging infrastructure for an electric consumer vehicle like the Smart Auto.
Looking at these challenges, they realised that a cargo vehicle is more viable in the Indian market than a passenger vehicle. They launched a cargo version – the Taskman. The idea is to manufacture the cargo variant to be sold only to businesses like Ekart, Big Basket and government bodies.
The Taskman also runs 100 km per charge and has a load capacity of over 450 kilos. “The charging infrastructure is not very important here. It is enough if we are able to set up a charging infrastructure at the starting point. Every cargo vehicle eventually ends up coming back there. This is a good value proposition for cargo companies as well at a running cost of 50 paise per kilometer,” Bavirisetty says.
GMW has already received an order from Big Basket for its deliveries in Gurugram. The government of AP also has placed an order for its municipal departments. Deliveries will begin in less than two months. It is also doing trial runs with Ekart and Gati.
The Taskman, which has different variants based on the need of the customers, starts at Rs 2.6 lakh.
Expanding horizons
Towards the end of 2016, GMW also developed electric bikes called LIMITLESS e-bikes. What’s different about the bikes is that they come with different levels of pedal assistances to give you a push. When you start pedalling, the motor kicks in and supplies about 80% of the energy. And if you don’t want to pedal, there is also a throttle next to the right handle, which can take you from 0-25 kmph in five seconds.
This bike is also powered by a lithium-ion battery and runs 30-60 km on a single charge. The price varies between Rs 28,000 to Rs 45,000.
The idea behind Limitless is to potentially replace usage of mopeds, especially for shorter distances. And against a moped’s running cost of about Rs 1.5/km, Limitless has a running cost of only seven paise per km.
“When we were talking to delivery companies, we realised that a lot of deliveries are being done on bicycles as well, especially for last-mile delivery. So this is our value proposition for such a use,” says Bavirisetty.
In fact, the Limitless bikes are already a hit. GMW hit the jackpot with their very first customer – Uber. Uber uses GMW’s e-bikes for its food delivery unit UberEATS in Singapore, Hong Kong and San Francisco.
It will soon also be delivering bikes to the government of AP for sanitary supervisors. It is also running pilots with Swiggy, Food Panda, Gati and Big Basket. They have even customized their bikes with a storage option to make it convenient for food deliveries.
What works for GMW is that the infrastructure and technical expertise is all done in-house. Not only does this cut manufacturing costs for the company, it also gives them more quality control. Except the cells that are sourced from outside, everything else, including the battery management system is designed and built in-house.
However, in terms of its Smart Auto, it still has a long way to go to become a commercial success. The acceptance and awareness of electric vehicles, is at a very nascent stage in India.
But for now, in its first phase, GMW is focussed on growing its B2B segment and partnering with logistic companies, campuses and government organisations.
In the long term, GMW’s aim is to enter different segments of automobile manufacturing. It believes that while the market is still untapped in India, it is now beginning to see a shift in the right direction.
This article has been produced with inputs from T Hub as a part of a partner program.