Please share with our readers about SmartE, your journey so far as CEO and factor(s) that propelled you to dive in the EV segment.
SmartE can be regarded as a pioneer in electric mobility space. It envisions providing a safe, reliable source of transport offering an end-to end last mile connectivity. The idea of SmartE began taking shape in 2014, around the time when Delhi was labelled as the world’s most polluted city. Also, the global automotive industry had begun warming up to the idea of electric mobility. We started off with 30 electric three-wheeled vehicle operation which grew to 100 vehicles in about 6-8 months, and then in one year, we grew that by nearly 10 times.
The entire first- and last-mile connectivity in India today is being delivered by an industry that has been unorganised for the last 50-60 years. And it is this unorganized industry that SmartE has set out to fundamentally transform by introducing electric mobility services for the first and last mile, that is zero emission, safe, reliable and highly economical. Today SmartE is operational in the three NCR cities of Gurgaon, Faridabad and New Delhi and will be expanding across the country in the near future.
Initially the company raised $5 million in series-A funding from the Singapore-based company- EcoTransit Investments International, how difficult was it to get the funding, given the lack of awareness about electric mobility?
Our early days were difficult and both me and my co-founder boot-strapped the company by ploughing in our personal savings and then roping in another of our close friends as an angel. This saw us through for the first 2.5 years before we got investor interest. But the good news was that as we boot-strapped we had put in place some solid foundations for the business, especially from a demand perspective as well as strong domain and execution expertise. But yes, the early days were extremely difficult. I still remember the times, when it took us more than 8 months of knocking the doors of nearly every single bank in the country to even get financing for first 50 vehicles.
SmartE’s three-wheelers operate from Metro stations in Gurugram, Faridabad, and Delhi; do you plan to provide the service in other states too? When and which states?
Apart from being the last-mile connectivity partner for the entire Delhi Metro Network, SmartE also has agreements with three other large states (two in North and one in South). The company has over 900 vehicles currently and plans to add another 10,000 vehicles in the next 18 months and targets a fleet size of 1,00,000 vehicles by 2022. At 100,000 vehicles, SmartE will help reduce close to a million tonnes carbon emissions, equivalent of planting 17 million trees per year. All this while delivering over 10 million rides a day.
How has the quality of EV and batteries changed over the years?
During 2014 to 2016-end, there were about 150 EV makers in this country. But the products were sub-standard. We struggled a lot to procure good-quality products. Similar was the case with batteries. There were barely couple of players who could offer reliable batteries. During initial years of our venture, the EV batteries available would just go dead in three-six months. Today we have many players in the field and the overall quality is improving. However, we are still very unsatisfied with the maturity of the overall EV supply chain in the country. There are lot of tier-1 players who appear serious about this space, but we still think we have a long way to go before we can see world-class products – both on EVs and batteries being commercially available in the Indian market. We continue to push our supply chain partners very hard to take long-term view on this space and introduce products that are not just long-lasting, but also designed and built for the Indian operating environment.
What kind of innovation or support is needed from battery manufacturers so that EVs can script their own success story on the Indian road?
Currently, the EV battery technology needs innovation to aid the boom. The industry needs to rapidly move towards Li-Ion or other similar advanced battery technologies to make this segment really succeed. Today over 30% of SmartE fleet is powered by Li-Ion batteries and we have seen clear benefits of the technology. Having said that as an industry, we can’t be over-reliant on a single chemistry type since the supply chain is highly concentrated around the world. Globally, there are innovations taking place, whether its in Graphene-based solutions, or super-capacitors or solid state batteries. As a country, we must be open to experimenting and adopting technologies that will be sustainable in the long run.
Secondly, interesting business models like battery swapping should be encouraged as it does promise a drastic reduction in the wait time before an EV gets fully fueled up.
Finally, for the industry to hit a tipping point, a massive roll-out of EV charging infrastructure needs to happen.
Charging infrastructure is said to be the biggest hurdle in EV adoption. How SmartE is handling or coping up with this issue? Did you partner with some companies to set up the charging infra?
When SmartE came into being four years ago, there were barely any charging infrastructure in the country. So instead of looking out for someone else, we built our own captive EV charging infra. Four years later, today we have India’s largest EV charging infrastructure which has a capacity to charge 800 vehicles concurrently. We are currently in the process of building the infra for 10,000 concurrent vehicle charging. We work with a number of leading partners who help us with different aspect of setting up of these charging infra.
When we label EVs as eco-friendly, do you think their charging stations also need to switch to renewables?
Definitely. EV charging hubs too need to switch to renewable source of power generation. Off-grid EV charging stations will be the real game changer and will speed up the pace of renewable energy adoption. As a company, SmartE is constantly looking at options to make its entire operations carbon-neutral and a renewable-based EV charging infra will certainly help us achieve that.
Do you see cab aggregators like Uber and Ola diving into three wheelers shared mobility segment soon?
Considering the immense potential in the sector, we won’t be surprised to see Ola and Uber enter the segment. Considering the last-mile, three-wheeler market today is worth $40 billion in India (in terms of passenger revenue) and by 2022 it will be a $70 billion market, we do expect few more players to enter into this space. Having said that the standard tech-based aggregation model alone won’t work in this space, at least in the near future. Any player who is going to be serious about this space, will need to be deeply invested and involved on different aspects of the supply chain and infrastructure as well.
Finally, what type of policy does the government needs to bring-in for mass adoption of EVs?
Beginning in 2012 when the National Electric Mobility Mission Plan (NEMMP) 2020 was established to promote hybrid and electric vehicles, the government has already undertaken a slew of reforms to accelerate the adoption of EVs in India. We feel very encouraged by the steps taken by both Central as well as many state governments. Should the governments do more? Absolutely yes. Greater clarity of FAME II would be a much-awaited move. Additionally, the government should work aggressively to enforce phasing out of diesel vehicles (esp more than 10 years old) and encourage their replacement by electric vehicles. That one strong move alone can bring about significant impact on the rising pollution levels.
(This Interview was published in December issue of Climate Samurai)