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April 27, 2008

Has the time for electric vehicles arrived?

Businessworld has a cover story on Bangalore-based electric car maker Reva which had recently raised $20 million from Draper Fisher Jurveston and the Global Environment Fund.
Although only 2,500 Revas have been sold since 2001, it is already the world’s largest selling EV. In a few months, this little-known company will begin the single most ambitious period of its existence. In FY 2008 alone, RECC plans to sell between 3,000 and 5,000 cars, and in 2009, 12,000. RECC also wants to expand sales to 10 and 25 cities by end-2008 and end-2009, respectively. Currently, it sells in six cities.

...Ironically, even as the world seeks fortunes in India, RECC has had to go abroad to find success. India accounts for just 33 per cent of RECC’s sales, while 21 countries such as the UK, Norway, Japan and Sri Lanka make up the rest. The UK is the largest of these markets. RECC sold its first Reva here in 2004. Since then, 1,000 G-wizs, as the Reva is called in Britain, have been bought. Part of the G-wiz’s success is due to many government-led incentives. Also, the car is sold through the website of RECC’s UK partner GoinGreen to keep marketing costs down. Online, customers can request a test drive, and even customise their order.

...With so many incentives being offered around the world, it’s no surprise that the EV industry is growing rapidly. Several large car makers, such as Japan’s Mitsubishi, have active programmes to develop EVs. There are also a few Indian companies, such as the Gujarat-based Fieldmarshal group, in the fray. Last October, Fieldmarshal joined hands with Australian firm Farnow Technologies to make up to 50,000 electric three-wheelers and cars each year. That’s a big bet because, today, Fieldmarshal only produces 450 auto-rickshaws per year.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.