It was in 2011 when a 44 year old Amitabh Saran while playing golf with his friends in Delhi, whined about the high price of hybrid cars in India. Only a few months ago, Japanese auto giant Toyota had launched its global hybrid bestseller Prius in India but it was priced at a steep INR 26.55-27.86 lakh. Fed up with his constant moaning, one of Saran’s golf buddies challenged the technophile in him to stop cribbing and do something about it.
That in a nutshell led to the birth of Altigreen–which grabbed headlines recently after securing a funding of INR 300 crore backed by investors such as Reliance New Energy, Sixth Sense Ventures, Xponentia Capital, Accurant International and Momentum Venture Capital.
Like so many startups in the industry, Altigreen wants to cash in on the reluctance of legacy automakers to electrify their portfolio. The biggest in the business–Bajaj Auto, is yet to launch an electric offering in the market. But unlike others, Altigreen does not want to spread itself thin and is focussed firmly on last mile transportation. Its first product, the three wheeler NEEV, is the result of a 9 year grind–a rarity in a market where companies aim to launch products in a matter of months.
“That is the undoing of our industry. This great rush to the market by companies that have not researched enough,” Saran told ETAuto. “Investors have now become cautious and this is welcome. It was unfair for us to be clubbed with other companies that have mushroomed in the market and it is good that serious questions are now being asked. It doesnt bother us because we have our answers.”
After that round of golf in 2011, Saran set out to become an electric powertrain supplier thinking he would help established players graduate to electric vehicles. Most manufacturers offered them business but never launched the vehicles in the market. That led to a different kind of frustration leading up to Altigreen decliding to make and launch vehicles themselves.
“It was a period of much exploitation and exploration. Exploitation for us and exploration for them (OEMs). The established players have all the technology but they are not launching their products as they do not want sales of their bread and butter diesel and CNG models to suffer. We however, have no such baggage. We have always been a pure play EV company,” he said.
The firm’s sole product–the three wheeler NEEV, has a class leading 11 KWh battery pack with a certified ARAI approved range of 181 kilometers. With full load, the company claims it can travel at least 120 kilometers, which should be more than adequate for most three wheeled applications in the country.
It also claims to have the best acceleration and higher load carrying capacity of 177 cubic feet compared to the industry average of around 118-154 cu feet. Even the four wheeled Tata ACE electric with a larger 21.3 KWh battery pack has a range of 154 kilometers and a load carrying capacity of 208 cu feet.
The big differentiator according to Saran though, is the R&D that has gone in to develop the vehicle and the software that runs it. As somebody with a core background in software–Saran has a Phd in computer science and in his near three decade career worked in companies like HP, NASA, TCS and Philips, he feels it is software that will be the differentiator for EVs and not motor, electronics or battery packs.
“It has taken us 9 years to develop the product. That is the grind required to make a product for India and there are no shortcuts,” he added. “Global EVs are being made for best case scenario. India needs vehicles for worst case scenario. We have waterlogging, potholed roads, overloading, slow traffic and extreme heat and dust.”
“The vehicles must endure all of that. There is no use case here but only abuse case. Hats off to the diesel vehicles as they have done a fabulous job of managing these. EVs need to do the same.”
The NEEV does not come cheap. Even after the central government’s FAME subsidy, it is priced at around INR 4 lakh. State government subsidies bring the price down to about INR 3.7 lakh. The comparable diesel or CNG offering in the market is priced at INR 3.15 lakh. The increase in battery prices in the last few months notwithstanding, the firm is confident it prices will continue to fall in the medium term and a parity with combustion engine vehicles would be achieved in 3 years. For now, it is banking on lower cost of ownership of EVs to offset the higher price tag.
“The economics is heavily stacked in favour of EVs. The running cost of a diesel is INR 3.5-4 per kilometer, for CNG it is INR 2-2.5 but for an electric three wheeler it is just 92 paise (INR 0.92) per kilometer. Customers end up saving INR 7,500 every month which means in less than a year they can recover the extra cost paid for the EV,” said Debashish Mitra, Director, Sales service and marketing at Altigreen.
“For now, the subsidies are in force till March 2024. Normally, they should continue till the time lithium ion prices come down so parity is achieved automatically between ICE and EVs. I think that will happen in 3 years,” added Shalendra Gupta, the co-founder and CFO of the firm.
With the funding and the support of a discerning group of investors spread across continents, the company has set its sights at capturing the last mile connectivity industry. The three wheeler segment is a start–5 lakh tonnes of cargo and 15 million passengers are ferried daily by three wheelers in the country.
At its peak in the pre pandemic era in fiscal 2019, around 7 lakh three wheelers were sold in the country. The numbers have shrunk to just 2.61 lakh units in fiscal 2022 but the company expects sales to bounce back to around 4 lakh units in the current fiscal. Around 20 percent of that would be electric presenting a market worth INR 4,500 crore.
“Our expansion starts now. Currently we produce 6,000 units every year but it will go up to 40,000 units this year. We will also transform from a B2B to B2C business and will be present in 40 cities across 12 states in the country,” said Mitra.
The scope of the company’s ambitions includes the export market beginning with neighboring countries this year to a bigger international play including countries in East Asia, Africa and Latin America next year. Also on the anvil are light commercial vehicles as the company hopes to straddle the cargo movers between 0.5-2.5 tonnes and vehicles that can ferry between 3 and 5 passengers. It would mean more innovation, expansion, investment and fund raising.
“You will hear from us very often in the future,” Saran promised.
Watch this space.
