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Reva, the market leader in the electric personal transport segment, never looked to the stars for inspiration. Instead, it looked to the sun.

“When I was at the University of Michigan, I was a part of the GM Sun Race team between Florida and Michigan—and we stood first. We then had a chance to race in Australia in the World Solar Challenge in the 1990 race and came third, after Honda. This got me thinking about electric cars, the future of this technology and its huge implications in India and China,” says Reva Electric Car Company Deputy Chairman and CTO, Chetan Maini.

Lon Bell, a friend’s father and a successful entrepreneur and technologist, liked Maini’s idea of introducing electric cars onto Indian roads. He asked him to join his company, AEV LLC, in California to develop electric car technology. Maini subsequently took three years off to complete his Masters degree in hybrid electric cars from University of Stanford.

Upon completing his studies, Maini returned to Bell’s company in 1994 and discussed the possibility of developing cost effective vehicles. Soon, the idea of Reva was born. A few months later, when his father, the founding chairman of Maini Group, was visiting him, a MoU was signed between Maini’s and Bell’s companies to jointly develop electric cars.

“In 1995, when I was looking at the U.S. side of the project, I had a separate team looking after the India operations. Then in 1999, when we believed the technology, patterns and everything else had been worked out, we decided to move the entire operation to India. We tested the car for a year and over a million kilometers. Finally, it was launched in 2001 after seven years of research,” Maini says.

Reva is a battery-operated electric vehicle designed for low speed, congested, urban conditions and is classified as a quadricycle (category L7e) under U.K. and European law. It is a fully automatic (no clutch, no gears) two-door hatchback, and easily seats two adults and two children. A small turning radius of just 3.5 meters makes it easy to park and maneuver the car—perfect for the city.

The car runs on batteries and, unlike most other electric vehicles, has an onboard charger to facilitate easy charging; it can be plugged in to any 15 amp socket at home or work. A full battery charge (a little less than seven hours)—which consumes just about nine units of electricity—gives a range of about 80 km. In quick-charge mode (two and a half hours), 80 percent charge is attained, which is sufficient for 65 km.

With the right technology in his power, Maini was able to address both technological and energy management problems for the car with relative ease. Obtaining funds wasn’t much of a stumbling block, either. “For finances, I talked to ICICI and the Technology Development Board and managed to get [funding] at an early stage. Later on we saw equity finance from venture capitals. Raising finances were very challenging since it was a new business. There were also governmental hurdles. We had subsidies in place and few months before launch the subsidies vanished and taxes on electric cars doubled, but reduced for regular cars.”

Previously, there were no standards for testing electric cars in India. To create such standards, Maini had to work with statutory institutes and the Automotive Research Association of India (ARAI) for two years.

But things have changed since its inception. Now, governments are a lot more helpful and conscious about the benefits of electric vehicles. The Delhi government, for example, has announced a lot of incentives in this regard.

There is a learning curve involved, though—both in terms of developing the car and in getting a sense of how the business works. Over time, Maini developed different business models for different countries, keeping in mind the specific requirements of consumers in each region. “We have centered our service facilities around what consumers want. In London, for example, almost all the cars are sold online, but are serviced at your home or office.”

Currently, Reva sells in ten countries and is being test marketed in another ten. For the first few years, the rate of growth was high—but Maini is not satisfied with the current level of around 30 percent. The base model of the car is priced at around $6,387, which many may consider to be too costly for a small car. Maini, however, feels pricing is not a problem, as most of his cars are sold as a family’s second car. “About 400,000 cars were sold last year as a second car—a city car. With an 80 km drive per charge, it makes for a good cost structure. This translates to a saving of about $4,255 on fuel in a five-year period, [made more enticing when] coupled with its low cost of maintenance. The Reva is a very good value proposition for our target consumers.”

Maini expects prices to come down if volumes increase through backing by positive regulations from the government. “[The Reva] costs less in Delhi than it does in Bangalore because of subsidies. In the future, when we attain economies of scale, we will see prices come down.”

©Entrepreneur December 2009

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automotive, electric car electric vehicles, Energy Management System, industry, Reva, Reva Electric Car Company Private Ltd. (RECC), zero-emission fuels