The first Electric vehicle to be launched in the Indian
market was the Reva in 20011. The car was built by sourcing parts
both locally and globally. Curtis Instruments Inc. (USA) developed the motor
controller, Tudor India Limited supplied customized batteries and the charger
was developed by Modular Power Systems (USA). How well did this first
generation car do? The car was launched in India (2001) and in the UK (2003)
and sold a total of 4000 cars. Is this a good enough number? Definitely not
considering the price point of 9,500 Euro2. The price in India was
about Rs. 3,50,000 ($5,400).
Although the price is low, the product did not sell. Reva
was to sell its technology to GM but the merger with Mahindra India, led to GM
pulling out in 20103. GM
launched the Chevy Beat in India in January 2012 in the $5,500 - $ 7,000 price
range4. The Mahindra-Reva partnership has launched the new Mahindra
Reva e205.
How does the company propose to be profitable?
One school of thought says the Mahindra e20 will not work.6. The reason behind this assumption is that the
price point is wrong, as the total cost of ownership is high. The time to
recover the savings is 4 years and the battery (majority of the cost) needs to
be replaced in the fifth. Second, the bill approving the subsidy for EVs has
not been passed yet and considering changes in the economy seem like they won’t
pass. Finally, the lack of charging stations will prevent adoption.
Mahindra on the other hand anticipates a demand of 400-500
EVs per month in India7. That amounts to just 6,000 vehicles. The
size of the passenger vehicle market in India is ~3.5 million. Mahindra has
invested in production capacities of 30,000 per year. Also, automakers such as
Hyndai Motors, Tata Motors and BMW have expressed interest in EVs. Mahindra has
announced that they are investing in EVs in India to gain the first mover
advantage.
Given the price sensitive nature of Indians and no export of
EVs to the UK anymore all raise questions about their investment. On the other
hand, Mahindra’s plans to export the e20 to neighboring countries and Europe
(not just the UK), along with the anticipation of ecofriendly lifestyles is
promising.
How will Mahindra manage if the e20 fails? How will the
production facilities that it has created be used considering the electric
facility cannot be used to manufacture non-electric vehicles?
Source:
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.