Given the strong government focus to shift from fossil fuel to electric vehicles, upstart Eto Motors is developing a business of its own in the shared electric mobility space. The company plans to invest `400 crore to pursue its long-term plan of providing fully electric transportation across 100 Indian cities, Biju Mathews, CEO, ETO Motors tells Sunitha Natti in an interview. Excerpts:
What’s the market potential for shared electric mobility solutions?
Our current focus in passenger category are electric three-wheelers and in the cargo category electric three-wheelers and electric four-wheelers. In these categories, an estimated 60 lakh vehicles (both electric and fossil fuel) are currently operating in the country. As we know that electric mobility is gradually picking up, the market is rapidly growing.
With many states introducing policies and initiatives, 2019 saw total EV sales of more than 7.5 lakh including electric two-wheelers, three-wheelers and electric passenger vehicles, bringing down carbon emissions drastically. The shared electric mobility is in the nascent stage. However, there is immense potential in this segment as adoption is bound to increase in the coming years.
When did ETO start operations?
ETO was established in September 2018 and started operations from Q1 of FY19 with an aim to emerge as the largest electric mobility company in India that will develop and deploy a range of clean, sustainable mobility services. The name ETO came from the way people shout to hail an auto on the streets.
Hence, we thought ETO would be appropriate to hail an electric auto. We are one of the leading electric-transport-as-a-service providers focusing on large-scale deployment of the multi-brand electric fleet for cleaner cities. We offer clean, safe, noise-free and shared public transportation for first-mile, last-mile and intracity commuters.
How will the partnership with BYD augment your business growth?
We tied up with BYD for cargo segment in the four-wheeler category and have ordered T3 vehicles to be deployed on our fleet. They are a strategic and technology partner for us to manufacture and deploy electric cargo vehicles. BYD being the world’s largest EV manufacturer would bring in immense technological expertise to deploy a vehicle, which is at par with global standards. We will source state-of-the-art power trains and EV batteries from BYD.
What were the initial hiccups?
The ecosystem to operate is yet in its formative stages and EVs require a complete ecosystem to thrive and be sustainable. We are contributing to develop the ecosystem right from manufacturing, EV charging to EV deployment. It requires support in terms of government regulations, product and vendor development, user acceptance and deployment.
Are these products economical options for retailers and other customers?
Currently, EVs are expensive than Internal Combustion Engine (ICE) vehicles in the same segment. However, we cannot ignore the fact that EVs do come loaded with high capacity Li-Ion batteries. Also, the operating cost of EVs is almost one-third of the operating cost of existing ICE vehicles along with lower annual maintenance cost. Estimates peg the market to touch a tipping point in 2022 when the cost of ownership of a BEV is on par with its internal combustion engine counterparts.
A bit about expansion plans? Are you considering exploring other states and markets? Any new product offerings?
We are targeting five cities including Bengaluru, Kochi, Chennai, Mumbai and Delhi-NCR, provided permit and regulations are in place. However, our long-term plan is to provide fully electric transportation for 100 key cities in India. Under the ETO brand, we currently have four variants in passenger and cargo category. As we go forward, we will come up with new models to cater to varied market demands.
How much have you invested so far? Are you raising any fresh funds?
We have invested Rs 20 crore in ETO Motors as the initial capital requirement. Over the next year, we are expected to deploy 4,000 electric cargo vehicles across 10 cities to service the logistics need to online as well as brick-and-mortar retailers. Additionally, between 2,000 and 6,000 vehicles are planned in passenger category with ride-hailing apps to provide an environment-friendly option. We will be investing an additional capital of approximately Rs 400 crore including both debt and equity.