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Summary:

The almost two decade old electric car company Reva hasn’t given up on the electric car market in India, despite super slow sales of its original car. Now backed by Mahindra, Reva plans to launch a new electric hatchback called the E20.

Reva E20

Despite selling less than 5,000 models over a decade, India’s little electric car company that could, Reva, is now doubling down on its hopes that a market for electric cars in India will emerge. According to the New York Times, Reva — which is now partially-owned by Indian giant Mahindra — plans to launch an electric hatchback that seats four called the E20, and is also building out a charging network. The intended launch date is reportedly March 18 in India.

Reva E20Mahindra Reva plans to assemble the E20 and build the charging technology in its new 32,000 square foot factory in Bangalore. That factory is supposed to be able to build 30,000 cars per year. Unlike the company’s poor selling, and micro-sized REVAi, the E20 will be roomier, has a 62 mile range, and has a plastic, light-weight body.

Part of the reason Mahindra Reva is now launching this new car is that the Indian government has announced it will offer support for electric cars. Last year the Indian government announced a $4.13 billion plan to boost the production of electric and hybrid vehicles, with an eye-widening goal to have 6 Reva E20million green vehicles on its roads by 2020. Reuters reported back then that 4 to 5 million of these vehicles are expected to be electric and hybrid two-wheelers (scooters, commuter cars, electric bikes).

Reva founder Chetan Maini tells the New York Times that the company is expecting the government to provide a rebate of at least 150,000 rupees ($2,790) to each E20 buyer. The E20 is supposed to be at least 10 to 20 percent more expensive than a comparable sized gas-powered car.

There’s a lot of reasons to be skeptical of the electric car market in India. Low cost two-wheelers dominate the roads, and customers that are willing to spend a premium on vehicles want higher end luxury cars that are a symbol of status. That’s why the low cost Tata Nano never took off.

Still, the massive population and its rapid economic growth, combined with government support, could some day be a game changer for electric cars. The question is, will it be Reva and the E20 that will change the game?

This article was updated at 12:39PM PST on March 5, with the latest intended launch date of the E20.

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  1. I am surprised the article did not talk about the severe shortage of electricity, frequent power cuts and heavy reliance on single unit generators. If status symbol is indeed an issue, lower to middle income families might be the target demographic. And in that case, the electricity problem is more of an issue as this class is more affected by frequent power cuts and scheduled outages with a lack of generator.

    I am not sure that having charging stations will be enough to overcome the issues at hand here.

    Rahul Sood

    1. If you look at grid data in India (and pretty much anywhere), power cuts generally occur during the day, when demand exceeds supply. At night, there’s always surplus production– and that’s when EVs are charged (the vast majority of EV owners charge — and will charge — at home overnight; public (fast) charging is more of an occasional convenience / backup option). This actually improves overall grid efficiency, and rather than being a burden on the grid, EVs can actually be a solution to power cuts.

      In India, people often have inverters (with a big stack of lead-acid batteries) at home (diesel generators are usually much larger, for business use). EVs generally have larger battery packs than standalone inverters that people use, and with the ability to output power, they can actually serve the same function as home inverters. Nissan’s done this in Japan, and Mahindra Reva has as well with their new car- they call the feature “Car2Home” (http://forbesindia.com/blog/technology/electric-vehicles-back-to-the-future/).

      Scaled up, these solutions are the “smart grid”– a bunch of EVs plugged into the grid can actually provide backup for grid-level supply issues at peak times (and EV owners could profit while their parked car does energy arbitrage for them), or be used to stabilize production sources like solar or wind (where you have a supply/demand time mismatch).

  2. Ashish Bakshi Tuesday, March 5, 2013

    A small point of clarification– two-wheelers do dominate the Indian market, but the reason the Tata Nano hasn’t met expectations is not that its target customers bought “higher end luxury cars.” You can’t buy any other car (let alone a luxury car) for the price of a Nano, nor is there much of a used car market in India (unlike the U.S., for instance, where people will often buy a used, mid-range car instead of a new, entry-level model).

    The target buyers didn’t make the 2-wheeler-to-Nano jump because of 1) marketing/branding: the Nano is an incredible deal- for $3K you get a car that’s better than any other car in India up till about $5K. But the whole image was one of a “cheap car”– and given that the 2- to 4-wheel jump is partially about status, a “cheap car” wouldn’t help on that front. 2) financing- Tata didn’t have sufficient financing tie-ups at launch, which is a fatal problem for the buyer segment they were targeting (who are unlikely to have that much cash sitting in the bank).

    Now Tata’s fixed the financing issues and turned around the marketing (it’s being promoted as a fun car for young people- a better image than “world’s cheapest car”). Obviously won’t live up to original expectations, but doing better than it was at launch.

    More relevant to the article, I don’t think people at the entry level of the Indian car market will be buying EVs at this point, as there is an up-front cost premium (even with subsidies). You do make up for that with much lower operating costs, but still not something a scooter buyer will look at (yet). Instead, it’s more for the middle of the car market (and also the very top end, i.e. eco-conscious buyers) — people who realize they don’t need to drive their diesel SUV to work every way. A city EV will eliminate the fuel, maintenance, etc. headaches (then you can have, or rent, an SUV or van for longer trips).

  3. Katie Fehrenbacher Tuesday, March 5, 2013

    @Rahul Sool, @Ashish Bakshi Good points, thanks for the comments.

  4. Actually, we want Tesla to come to India. If anyone from Tesla is reading this: There is absolutely NO competition NOW. The market is yours to take, COME!!! :)

    Mahindra will do better if they release the car without waiting for the Govt. subsidies. If any subsidies are announced, they can provide it to cars selling from that point. By releasing it now, they will know how the vehicle performs and get customer feedback right now. Is there any point in waiting till Tata or Maruti start launching electric cars aggressively???

    Also, Mahindra Reva might want to bundle that solar charging stations with every car they sell. They should at least license the technology that allows house-hold appliances to be charged from electric car batteries. Do all this and you will have a winner.

  5. What if EV cars did not need hardly any outside charging ?
    What if they had consistent trickle charging always going on ? What if they had:

    1) PV built into the body providing consistent trickle charge anytime any light is present (i.e., thin film coated like with Aleo Solar (which works off all light, direct or indirect via infrared) or the new one that uses ALL incoming light and has a +90% efficiency),2) permanent magnet DC high efficiency generators in the wheels so trickle charge also occurs every time the wheels move, 3) Ultra capacitors used in order to cut down on battery drawdowns during high power demand times such as initial acceleration (these can extend a battery charge up to 15 times when used with portable power tools), 4) low efficiency magnetic field inducing generators used in regenerative braking for recapture of some energy (or maybe try some flywheel technology, which I haven’t seen used yet, the other items however are all ready to go), 5) Altairnano Nanosafe nano coated titanium dioxide batteries do not heat up, test up to 20,000 recharges, operate well in extreme temperatures, charge in 10 minutes and can be stacked to provide extended ranges and: 6) High efficiency motors by UQM or Dyson. Such a car would rarely need to be “plugged in” to the grid because the high efficiency coupled with the constant trickle charging would greatly extend the life of each battery charge. It would sell very well throughout the world, put more money back into the hands of the people because they would not have to be buying unneeded outside produced polluting energy, erasing much carbon presently being produced alleviating some of the climate change, change the geopolitical, financial and military structures throughout the world, i.e., middle east, Iran, Venezuela, ETC., help alleviate the need for spending such great sums of money and precious resources on drilling and transporting oil, cut down on pollution and the attendant health problems and costs incurred by such, no more oil drilling in ecologically precious areas. Yeah, I guess it makes too much sense

    1. Great ideas Jonathan. There are issues to deal with with regards to integration and durability of surface mounted EV/PV, but nothing that can’t be solved, especially with a transition of subsidies from carbon energy sources…! :-)

  6. Kamlesh Mallick Thursday, March 7, 2013

    Agree with Rajesh K.

    Tesla should really look at India, China to get the first movers advantage.
    They could also manufacture here and save costs and thus make cheaper cars for domestic as well as export.

    We just had our Union budget for 2013 by the government and there were no subsidies announced for electric car consumers.
    That’s a bummer.

    Without the subsidies of Rs 1,50,000 (which is huge), Mahindra will push that cost to the consumer and in a price conscious society that is going to be a challenge for Mahindra.

    Am 32 years old and in my 12 odd years of my work life so far, i have never bought a gas motor bike or a gas car, even though i could afford one,

    I have used public transport all my life. But looking at people, who dont care and buy SUVs, sometimes i think whatz the point?

    How am i making a difference? And how am i benefitting? The government does not provide any tax benefit for me, for not using a gas guzzling vehicle.

    I walk through the polluted Indian cities and breathe in the polluted air to catch a bus, while i see colleagues zoom in their cars.

    But something has always kept me going, the deep intuition that the way we are screwing up the environment and air is bad and we need to set an example. I often wondered if there will be a change.

    And then i see Tesla, Mahindra trying to make a difference. And now is the time.
    Guys – lets support these amazing enterprises and make a difference.

  7. Rahul Mukerjee Monday, March 11, 2013

    All platic body panels – do it with thick sheet thermforming or CRT requiring no paint.. then add solar horizontal roof panels for trickle charge… and get somebody to do a real stylish car design to appeal to the neo-rich who can afford the 10-20% premium …. unlike the Nano. .. that is the future.

  8. In India, we barely get electricity in rural areas. From past 20 years, there is consistent power shortage (Almost 12 hours a day). In such circumstances, electric cars are like dream. However, during Budget 2011-2012, finance Minister Pranab Mukherjee announced in his budget speech about the cars that run on CNG, LPG and other hybrid and alternative fuels will be encouraged in the country. He also announced the plan to set up ‘National Mission for Hybrid and Electric Vehicles’. There is very less information available on status of this mission and its achievements. I believe, in the country like India, where power shortages are growing, we need to concentrate on alternative technologies like renewable energy to charge electric vehicles, etc.

    Please read energy shortages graphs in different states of India here http://greencleanguide.com/category/energy/

    Read more on National Mission for Hybrid and Electric Vehicles here http://greencleanguide.com/2011/03/12/national-mission-on-hybrid-and-electric-vehicles/

  9. murtaza kandil Tuesday, March 19, 2013

    For any product to be sucessful it has to be sucussfully drilled in the.conciuous mind of the customer. Purchasing power is not a problem , what is importance is the acceptance. The big question in the mind of consumers that is WHAT IF ? Educating target consumer on pros andcons of buying an EV could help to decide it for themselve. If you leave it at that consumer are smart enough to evaluate ? No they are not. A join effort with government and enterprises could really help. Because I as a average middle class person getting me rid of going to fuel station is a dream come true. The only obstacle in my mind is WHAT IF ?

  10. Well, I certainly hope inroads are made by Reva. India is a massive growing population center that desperately needs responsible development across many sectors.

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