Our Competitors Are Partners In India’s Electric Mobility: Olectra Greentech
Talking to BW Businessworld exclusively, Naga Satyam., Executive Director -OGL reveals that the company has already launched its electric bus models in the Indian market and perceives its competitors as its partners in electric mobility in the country
Naga Satyam., Executive Director -OGL
Olectra Greentech Limited (OGL), previously known as Goldstone Greentech, ventured into manufacturing, assembly, sales and after-sales services of BYD electric buses in India in 2016. OGL has a strategic partnership with China-based BYD Auto Industry Company Limited, which is a leading manufacturer of electric vehicles, power battery, EV chargers and complete electrified public transportation solutions for more than 200 cities, in over 48 countries, 6 Continents, having production facilities globally. Talking to BW Businessworld exclusively, Naga Satyam., Executive Director -OGL reveals that the company has already launched its electric bus models in the Indian market and perceives its competitors as its partners in electric mobility in the country. Below are the edited excerpts:
What prompted you to ally with BYD for e-buses and what has been the journey so far?
Our association with BYD started in mid-2015. Initially, BYD was also exploring various options (for a local partnership) to enter the Indian market. We were also very curious about electric mobility. So initially we went for a marketing partnership and the agreement was for five southern states and Himachal (Pradesh). Slowly and steadily we gained confidence in the market. Then an opportunity came to participate in one of the tenders in Maharashtra i.e. there was a tender for six electric buses. BEST Mumbai was the first tender in the country for electric buses in the year 2016. When we had won the tender, the relationship between the partners also grew (as) there is a potential market (for e-buses). Then we went for a pan-India participation. Thereafter, we won another crucial contract in HP in the end of 2016. After garnering two contracts, we proposed BYD to assemble and manufacture these buses under the ‘Make-in-India’ programme in order to be cost competitive to which BYD had readily agreed. So far, we have supplied 31 electric buses, which are commercially running on (Indian) roads out of which six (has been delivered) to BEST Mumbai and 25 to HP. Now, all the buses sold here are locally-assembled. Then in 2017, there was a big electric push by the government of India when they included Electric Buses in the FAME scheme. The fastest way to go for electric mobility in the country is public transportation, wherein you don’t need to struggle to develop infrastructure (charging stations) because they are parked at bus depots.
What has been the response to your products? How much are you planning to deliver by the end of the year?
Within a short span of six months, we have delivered 31 buses. We have done more than 2 lakh kilometres of commercial runs. All State Transport Understandings (STUs) are extremely happy with the products. We offered a trial run to whoever ( undertaking) has asked for it. This is because we wanted that everybody should have a feel of this electric public transportation. We think electric mobility for public transportation should start (in India). That is why, we did the trial run in Delhi for three months and it was a phenomenal success. We are planning to do another trial run soon. And we did a trial run in Chandigarh and it was a phenomenal success (too). We also did a trial run in Rajkot, Bangalore, Hyderabad, Goa, and even in Kerala. Currently, we are doing commercial trial runs in two routes in Uttar Pradesh i.e., between Agra-Noida and Lucknow-Kanpur for the last two months. We are also doing a commercial trial run between Dehradun-Mussoorie in Uttarakhand. The reports in both states are extremely encouraging. By the end of the year, we are definitely seeing 200 units on the roads. The major contracts were from 3 key cities. Bangalore has asked for 150 electric buses and we have won that tender, 100 buses from Telangana State Transport Corporation for Hyderabad and we won that tender. And the third is Best Mumbai for 40 electric buses. Currently, deployments are under way.
How will you taking on other players in the market like Tata Motors, Ashok Leyland, Eicher Motors, JBM Auto, among others?
Firstly, electric vehicles are at a very nascent stage (in India). Secondly, we don’t call them competitors but “partners in electric mobility”. The reason is electric mobility has just come and we need more and more players. What happens is then there will be an awareness created by everybody. There is a space for 10-15 players to grow in electric mobility (in India).For us, it is not just selling. After-sales is a very key component actually in any industry. Selling is only 50%, but the rest 50% is your future business, company’s culture, people’s opinion in a company, etc., which entirely depends on how you respond to your service call. So we are focussing very majorly on after-sales service.
Will it be correct to say that you have disrupted the bus market with the next-generation technology?
Let me give you the analogy of smartphones. You know when Apple came out with their ‘iPhone’ in 2007, that was a real kind of smartphone in the market. I remember Nokia CEO saying “Yes I truly feel that there is something really beyond Nokia’s capabilities.” I mean to say it is not that the company (like Apple) comes out with a disruption. After that, Samsung came out with beautiful things ( high-end smartphones). And then when the (affordable) Android phones came, you could see the explosion of smartphones into the (global) market. So had Apple been the lone smartphone player, it could not have been a great success. So likewise, we might have brought the (EV) technology much ahead of others. But the whole lot of technologies change the market actually. So it is a disruption in the technologies. So even though we have disrupted the market, we will be like any other player in the next two years or so.
Please can you also tell me about your capex plans?
As per the recent data, there will be about 3 lakh buses are going to be about 15+ years old and have to replaced in the next 3-5 years. Most of the STUs we are talking to, would like to go for electric buses for health and environment concerns. In the long term, electric buses will have a positive impact on their (operating) margins. I understand most of the STUs want to procure electric buses. So even if they decide to go for half of them ( new fleet), 150,000 buses is the kind of market will be there (for e-buses). So even if they take 25% (of its new fleet), there will be (a demand for) around 100,000 electric buses. In ICE (vehicles), there are a lot of moving parts whereas in electric buses there are less moving parts so that takes care of maintenance and other issues actually. The prices of electric buses are bound to come down because the major component in an electric bus is the lithium-ion battery, which will see a cost correction. So by March 2021, we want to have a (per annum) capacity of 5,000 electric buses. We have already done Rs. 80 crore for the first phase of investment and (for) the second phase of (capacity creation of) 1,500 units we are spending roughly Rs. 500 crore. We will build future facilities as and when it is required. We are also trying to build an ecosystem and are talking to a lot of companies for that. As per FAME guidelines, we need to do 35% local sourcing and are fully compliant with that. What I have read is that the govt is looking for enhanced local content and we have to keep ourselves ready for those kind of requirements. We are even ready to share some of the key components’ manufacturing practises with those who can help us develop the ecosystem. They don’t need to be with us and could be company agnostic. Once this ecosystem develops, they can cater to a whole lot of market (other OEMs). What happens is with that we have a lot of benefits in terms of local employment, faster sourcing of components, cost reduction, etc. Infact, we are having very high hopes on ISRO, which has come out with an EOI to share its lithium-ion battery technology (with) those who want to manufacture it.
Can you tell us the number of jobs that will be generated directly and indirectly from both the plants?
Atleast 800 people will be employed at both the facilities. One thing you need to understand that once these buses are deployed at service stations, you will have direct and indirect employment where these service teams are based. Second thing is we are also trying to source a lot of material locally for charging infrastructure. Even that is (a generator) of an indirect employment.
Actually, we will try to go for competitive bidding in every city whichever comes out with electric mobility in public transportation. But we cannot be reckless in bidding. Any prices should be sustainable in the long run. You cannot bid just to win every bid. We cannot afford to underquote. That is not our policy. What I offer is a luxury city bus wherein we offer an experience (to the passengers). It is like a metro kind of experience on Road. So we want to give a real luxury experience. This is the only way to bring back people towards public transportation. So apart from being comfortable, there is no noise or air pollution in our buses. Since we don’t compromise on luxury, our prices will obviously remain higher. Will you be looking forward to export your products too?
We are aggressively working towards gaining a foothold in export markets such as all the SAARC nations from India’s manufacturing facilities only. We are looking at countries like Nepal, Bangladesh, Sri Lanka, etc. Even if 2-3% of the output is exported from India, it will be a great contribution (by BYD).
Will you be also interested to foray into inter-city and other bus segments?
At present, we have three products- a 12-metre AC low-floor bus, which is the largest selling one, a 9-metre standard floor and a 7-metre bus used for feeder connectivity. We see a lot of potential for feeder electric buses. We also look forward to cater to corporates and schools who use buses to ferry passengers. We are also thinking of foraying into inter-city electric buses. But we are yet to freeze the specifications for the same. We are working on those coaches which can ply between the routes like Delhi-Jaipur, etc.