Clean Motion India Aiming For Rs 1,000 Crore Topline By 2020
Clean Motion India is currently rolling out 2 vehicles a day and once it achieves localisation scale, it will be able to make 10 vehicles a day by the end of the year.
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Clean Motion India, the 100 percent subsidiary of Clean Motion AB, Sweden, is engaged in the development and manufacture of electric vehicles. The company has rolled out its three-wheeled electric “pods” called the Zbee, which has been certified in the L5 category by International Center for Automotive Technology (ICAT) and is gaining widespread acceptance.
L5 category is a three wheeled motor vehicle with maximum speed exceeding 25 kmph and engine capacity exceeding 25 cc if fitted with a thermic engine, or motor power exceeding 0.25 kW if fitted with electric motor.
In an exclusive interview with BW Businessworld, Anil Arora, Country Head, Clean Motion India stated that its revenues will skyrocket to Rs 1,000 crore in the next three years.
It is now more than three years that Clean Motion is present in India. What has been the response to your ‘Zbee’ e-vehicle?
We started making Zbee in 2009 (in Sweden) and had three generations of the product. The first generation was launched at its home market sometime during 2010-11. The one which we have commercially rolled out in India is the third generation. There have been huge improvements that have gone into its development.
We started out getting the products certified for Indian roads which took us about a year. Our commercial operations started in February – April, 2016 we have been commercially operating in DF Cyberhub (in Gurgaon). This financial year, we are running our products at Mall of India (Noida) and Ambience Mall (Gurgaon).
How many vehicles have you dispatched to these clusters and how many rides are you doing on a daily basis?
We have dispatched about 50 vehicles to these clusters with another 20 (units) on its way soon. On an average, we would be doing about 400 trips with a customer base of 600-700 on a daily basis. Going forward, we are looking at a countrywide rollout of about 250-300 vehicles. The number of rides and customers will proportionately go up. Basically, we earn a substantial amount of revenue operating the vehicle.
When do you intend to go for direct selling rather than tying up with clusters for running your vehicles?
Rather than going the whole hog and selling the product, we are selling the new concept around e-vehicle category. I don’t think going for sales in this category can actually help the product succeed initially. This is because there are issues around charging of vehicles as there is no infrastructure around.
In India, somebody needs to incubate this category operating in a controlled environment especially for first and last mile connectivity. We want to propagate the idea of zero-emission mobility which is far cheaper to operate vis-à-vis gasoline or diesel vehicles. Once this concept gains eminence, we will start selling our products.
How do you plan to expand your footprint? Also, do you have plans to export from India?
We already have a corporate tie-up with DLF and operate most of their premium formats. Now we are also operating with DLF Ambience of Gurgaon. We recently had discussions with Golden Temple Amritsar. Then we are looking at smart cities and are looking at Naya Raipur and had several discussions with the CEO to plug this (concept) in as a transport solution for the Smart City.
We would also like to be integrated as a connected electric vehicle for Greenfield smart cities. We will go for subscription-based models and are in talks with five-star hotel management in multiple cities to operate our vehicles. Yes, we do have such plans for South East Asian markets. We are starting our shipment to Nepal and Sri Lanka.
Do you think the current price tag of Rs 5 lakh would be sustainable in the long term? If no, will you go for mass production?
Yes, the cost of the vehicle is very high as currently the components are imported from Sweden. So with this skeletal rollout, we are trying to highly localize the product as we are running a rented manufacturing facility at Faridabad. There are 230 components for building this vehicle.
We will locally making the sheet metal and stamp components in the first phase of production. From 10 percent currently, we are aiming to go for a 70 percent indigenization which will enable us to bring down the price of the vehicle to Rs 3.1 lakh. The automotive ancillary industry even for e-vehicles is very good in India.
We have localized windscreen glass, wipers, seats, brake shoes, brake pads, etc. Having said that, entire drivetrain comprising the batteries, motors and controllers will continue to be imported from Sweden. Once that process is over, we will then come into the market with big investments and look at driving volumes.
What is your current plant capacity? And are you working on other avatars?
We are currently rolling out 2 vehicles a day and once we achieve localization scale, we should be able to make 10 vehicles a day by the end of the year. We will be launching its cargo version which will be priced at Rs 2.5 lakh.
Even though the drivetrain will be the same, the only difference will be in the loading bay instead of constructing seats. We will be typing up with e-commerce companies for first and last-mile deliveries. We are also looking at an e-quadricycle both in passenger and cargo avatars. We will also get into battery swaps
Lastly, how much have you invested in India and what kind of revenue projections have you set for India?
We have invested around US$ 2.5 million until now and would be quadrupling that amount in the next 12-18 months. A lot of that outlay will be deployed into capex, market research, pilot testing, and product rollout. We would like to organically go for a pan-India rollout and would like to associate with 6 operators from each city.
At present, we are doing about Rs 1 crore. We will be the company with a valuation of Rs 1,000 crore by 2020. The key growth drivers would be widespread expansion and mass acceptance of our products. In fact, India is expected to be the biggest market for us globally.