Three year old EV startup Bounce which created a flutter in the market on Thursday by launching its first electric scooter at just Rs 45,000 (without battery) and Rs 69,000 (with battery and charger), is aiming to go big in the next one year with an investment corpus of $ 100 million (Rs 750 crore).
The size of the ambition pits Bounce–a company that was till sometime back focussed merely on two wheeler rentals, against the likes of Ola Electric and Ather Energy that have emerged as the early frontrunners in this nascent segment. For context, Ather is investing Rs 650 crore over the next 5 years and recently announced a second factory which will take its overall capacity to 400,000 units from the existing 120,000 units.
Ola has even bigger plans worth Rs 2400 crore and a 10 million unit per annum factory but is grappling with production ramp up issues and supply chain shortages that have already seen it miss delivery deadlines. The entry of Hero MotoCorp later this fiscal will ratchet up the competitive intensity in the market by a few more notches.
“We will do whatever it takes to build. The market is large–nearly 2 crore scooters are sold in the country which within 3-4 years will become 4 crore and the EV penetration is still very small,” says Vivekananda Hellekere, CEO and co-founder, Bounce. “I think millions of consumers will shift to electric scooters in the next few years and our product will do a lot of the talking for us. Over the next 5 years, I expect 90-95 percent of this 40 million scooter market to be electric.”
While the likes of Ola and Ather have grabbed headlines, the segment is already cluttered with dozens of startups mushrooming almost overnight. Flush with venture capital funding, these new age firms seek to disrupt the market, sensing the reluctance among established two wheeler majors that are straddled with investments in the combustion engine technologies. Yet, there is a sense of foreboding as well. No matter how big the market might be, it will not accommodate all.
“There’ll be more people who will come and time will tell who will be able to sustain,” Hellekere says. “Investments are required in this. The mobile phone and e-commerce industries also saw something similar–there were a lot of players but finally it converged between three or four players. Wherever there is any good opportunity a lot of interest comes in but investments are required to sustain and only the top group will survive. We will see how much each of us holds in this market.”
Bounce has identified specific areas where it wants to spend the $ 100 million corpus. To build a second factory that will increase its current production capacity from 180,000 to nearly 700,000 scooters per annum. For more products in various segments including motorcycles–its second scooter will be launched within three months. And crucially to expand the network of swapping stations across the country which is critical to the success of the brand.
That alone may not be enough and the company’s key USP is on battery swapping unlike Ather, Ola and the majority that are banking on fixed batteries. Swappable battery has the advantage that it helps negate range anxiety among consumers while offering the option of a scooter without battery thus lowering the price. The Rs 45,000 price tag on the Infinity E1 is substantially less than the current bestselling combustion engine scooter Activa (Rs 70,000) or Ola’s S1 andS1 pro (Rs 85,000-110,000) and Ather 450X (Rs 1.25 lakh). For it to work though, swapping centres in every nook and corner of the country is essential.
“The simple maths is we want a swapping station within one square kilometer of every consumer so a city like Bangalore needs 500 stations. We already have about 150,” Hellekere says. “We have partnered with several mom and pop stores, petrol pumps and are also inviting the general public to become battery swapping infrastructure providers. You can also have batteries and become an operator through us. Besides, we will also have on demand delivery of batteries so that there is enough density of batteries in a particular city or a market. Additionally, in certain cities, people can buy our scooter with the battery to begin with and then switch to swapping mode when the network is ready.”
The concept of removable batteries and swapping isnt new. Infact the two biggest players in the segment right now–Hero Electric and Okinawa, offer removable batteries. But they are aimed more at enabling consumers to carry the battery to their homes for charging and have not invested enough into swapping centres. Hellekere says Bounce will not only expand aggressively in this area but also lobby intensely with the government for standardization so that more companies can plug into their network.
“We have already integrated with a couple of OEMs and are working with the government on standardization–a draft is ready which should get released soon,” he adds. “Swapping offers an instant fix to a number of questions consumers have regarding EVs–range, charging infrastructure, or the life of a battery. And the cost is less by almost 50 percent of any typical electric scooter.”
A business case built around swapping also meant the company could use a smaller battery pack–2 Kilowatt hour that offers lower range of 85 kilometers as against Ola (2.98/3.97 KWh and 121/181 kilometers) and Ather (2.61 KWh and 85 kilometer) While an Infinity consumer has the option of swapping the battery on the go, somebody with a fixed battery scooter will have to look for a slow or fast charger and wait for sometime before taking off if the scooter runs out of juice. In the case of the latter, it becomes imperative to offer more range which means a bigger battery and in turn higher cost and price.
“Swapping is a faster way of promoting electrification and it also happens to be our core strength. You cannot succeed in this area if there isnt enough demand for the network and we will end up doing just that,” he says. “We understand our scooters really well and also our customers–those who want to go from point A to B and may not have their own parking space and hence the option to charge overnight everyday. That is the bulk of two wheeler consumers in the country.”
Just like the others, while it is spending on one side, Bounce has plans to raise fresh funds as well. Already backed by an enviable list of investors like Qualcomm Ventures, Sequoia Capital, Falcon Edge, Accel and B Capital Group, the company which at one point was wondering why investors weren’t making calls to them, claims to be hounded by them today.
“We are getting a lot of inquiries and will be in the market for another fundraiser…probably early next year,” he signs off. “Whatever we’re doing attracts a lot of investors who now understand our execution capabilities.”
The investors may be bullish but it is the customer who will decide if it can bounce ahead of the competition. If consumers warm up to swapping, Bounce could be the surprise package and add a twist to the narrative spun by Ather and Ola. That part of the story starts in March 2022.
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The scooter will also be offered with a ‘Battery as a service’ option and the price will be INR 45,099 (Delhi Ex-Showroom) plus subscription to Battery-as-a-Service, the company said.
This smart framework will be available at locations like residential societies, key parking spaces, malls, corporate offices, among others, for customers to find the nearest swapping station on their Bounce App or Park+ app, the company said.
