Vikash Mishra, head of external relations at Lithium, told Quartz, “There is a lot of pressure from shareholders (at these companies) to go green and focus on sustainability.” The costs are also under pressure at the same time. In the end, the main reason to switch to sustainability is the cost.
Over the course of five years, Lithium has increased the number of its electric vehicles in Bengaluru, Pune, Hyderabad, the National Capital Region (NCR), Manipal, and now Jaipur and Mumbai as well. Mishra talked about his experience starting a fully electric taxi service in India with little support from the government and how players like Lithium can help car manufacturers encourage EV adoption in India in an interview with Quartz.
When it comes to B2C journeys, it’s hard to predict where riders will go and where they’ll book. As a result, you won’t be able to plan your trip or when the car will be charged. In B2B journeys, office locations are predetermined, and we also know in advance where employees will be dropped off. so we could plan when an electric vehicle can be charged and how many trips it can take in a day.
EVs are expensive, but they are cheap to run. You need to use it as much as possible over a 24-hour period to get the most out of low operating costs. We realized that we needed to target businesses where employees work multiple shifts throughout the day. In order to provide our services, we make seven to eight trips per day and employ two drivers per vehicle.
Lithium launched as a commercial taxi service that was entirely powered by electricity, in contrast to cab aggregators like Ola. How difficult is it to start from scratch with a commercial EV fleet?
High upfront cost, limited choice of models, and inadequate charging infrastructure were the challenges we faced.
Our obstacles included the high initial cost of EVs, the limited selection of models, range anxiety, and inadequate charging infrastructure.
We discovered that an EV’s operating costs were one-fourth to one-third of those of diesel or CNG vehicles. You will save enough money to cover the initial costs if you run an electric vehicle for 300 kilometers per day. As a result, we operated the vehicle throughout the day to reduce the client’s transportation costs by 10-15%. Each contract yielded a profit for us.
We likewise chose to manage with anything that EV models were accessible on the lookout. After purchasing the Mahindra e2o, we were able to complete trips of 30-40 kilometers. At the same time, we earned OEMs’ trust by promising to purchase their vehicles in bulk if they introduced additional models. More than 1,000 EVs have already been purchased by us from Mahindra. We currently also have orders from MG Motor and Tata Motors.
We also created a vehicle scheduler, fleet management system, and routing mechanism that let us know how much battery power is left in our cars. This helped us deal with range anxiety.
Lastly, we installed our own charging stations at client offices. We oversee approximately 1,500 charging stations, 300 of which are fast chargers.
How are you tackling the problem of charging your EV fleet?
There are three different charging stations for lithium. We have partnerships across India with commercial real estate developers like Brookfield Properties and RMZ to install charging stations on their properties in addition to those on client premises.
A “charging hub” is the third category of charging stations. Gurugram already houses the nation’s first charging hub. Totally fueled by sun powered energy is controlled by Lithium and Fourth Accomplice Energy, a 100 percent housetop sun oriented organization situated in Hyderabad, as a joint endeavor. Lithium ensures that our Gurugram fleet will be charged at the hub, and they are responsible for providing us with clean and inexpensive power. At the hub, there are between 25 and 30 charging stations where 30 cars can be charged simultaneously. We will also open a charging hub in Pune within the next few months, and we anticipate having 20 to 25 such hubs across the nation in the near future.
Advertisement In the coming years, it will be extremely difficult to encourage the use of electric vehicles in India. Is there a way to get around this obstacle by working with manufacturers like Mahindra?
Adoption becomes difficult when a product is on the market at twice the price of a comparable gasoline or diesel vehicle. There is also a lack of charging infrastructure. The ideal strategy for increasing EV deployment is a fleet operator like Lithium that is capable of managing the charging independently. There are currently 30,000 daily users of our vehicles. OEMs consider us to be a medium to convey more vehicles on the ground. Take the case of Mahindra: They have traveled approximately 170-180 million electric kilometers thus far, of which 100 million have been driven by us.
What is the business model of Lithium? What is the typical structure of a business contract?
There are some clients who pay per trip, despite our fixed monthly revenue per vehicle. The monthly distance a taxi can travel is always limited with traditional taxi services. However, customers can utilize our vehicles for any length of time and for any duration. We are also immune to changes in the price of crude oil. Companies can easily incorporate it into their budgets because we offer clients a fixed price for the entire three-year contract.
Unlike other shared-mobility services like Ola and Uber, Lithium claims to be profitable. How important is profitability for the expansion of an all-electric shared mobility service?
That is the upside of a B2B administration: The revenue per kilometer and trip is significantly higher than for B2C players. For every contract we sign, we keep profitability at the forefront of our business. However, the establishment of renewable charging hubs or pan-India partnerships with real estate developers necessitates a significant initial investment, and we will only eventually be able to recover our costs. In addition, in order to tackle the subsequent growth phase, we must first increase our workforce. The majority of the cash loss takes place there. As a result, we need to make money.
Government May Push Ola, Uber To Convert 40% Of Fleet Into Electric Vehicles
In order to achieve a 2.5% electrification rate by 2021, a meeting that took place in Delhi in May talked about the idea. Both Ola and Uber will need to start converting their fleets to electric vehicles next year. Government bodies also said that all new cars that will be sold for commercial use should only be electric from April 2026. The Indian government is reportedly going to tell cab aggregator platforms like Ola and Uber to convert 40% of their fleets to electric vehicles by April 2026. In a May 28 meeting, officials from the Niti Aayog, the ministries of road transportation, power, renewable energy, and steel, as well as the departments of heavy industries and trade, suggested that electric vehicles should be used.
An exclusive report by Reuters claims that the proposal was discussed at government meetings late last month regarding the new rules for emobility, citing sources from the central government. Ola and Uber, two of the largest cab-hailing companies, will need to begin converting their fleets to electric vehicles as soon as possible in order to achieve electrification rates of 2% by 2021, 5% by 2022, 10% by 2023, and 40% by April 2026.
Ola And Uber’s Electric Vehicles In India
Ola, which is based in Bengaluru, has been enthusiastic about its electric vehicle business. In 2017, it launched a fleet of electric cars as part of a pilot program in Nagpur with an initial investment of $8 million. However, Ola drivers’ discontent led to the project’s failure shortly after nine months.
Ola, on the other hand, continued to investigate the electric vehicle market despite the failure. In Spring, it set up the Ola Electric Versatility auxiliary. It raised $56 million from investors like Matrix India and Tiger Global in the same month. Following this, Hyundai Motors and Kia Motors, a subsidiary of Hyundai Motors in South Korea, invested $300 million. Additionally, Ratan Tata had contributed an undisclosed sum to Ola Electric’s Series A round of funding.
It also appointed Arun Sarin, the former CEO of Vodafone Group, to the Ola Electric board in order to maintain its lead in the field of electric vehicles.
Uber, a taxi-hailing giant based in the United States, is also looking to expand its electric mobility presence in India. It was recently reported that the company has partnered with the dockless bicycle sharing platform Yulu, which is based in Bengaluru, to provide EV two-wheeler services for short-distance journeys and last-mile commuting. However, the company has yet to launch its electric vehicle offering in India. Although the Yulu app will not be integrated into Uber, users will be redirected to the Yulu registration page to book electric bikes or bicycles through the Uber app.
According to previous reports, chief executive Amitabh Kant of the central government think tank NITI Aayog has proposed a gradual transition to electric two- and three-wheelers beginning on March 31, 2023. By March 2023, the proposal proposes banning the sale of all three-wheelers with internal combustion engines (ICEs) and two-wheelers with less than 150 cc by 2025.
The central government has increased its efforts to achieve 30% emobility by 2030 after the electric vehicle industry expressed concerns about the absence of a proper roadmap for the development of the EV space in India. As part of this, a draft policy to address the charging infrastructure gaps has to be created.
Additionally, the Department of Heavy Industries has asked state transportation departments to submit proposals for the implementation of 5K electric buses that would be supported by the Fame II program.
Several initiatives to promote emobility are also being taken by state governments. It was recently reported that the Delhi state government intends to encourage online consumer service companies like Amazon, Zomato, LensKart, and Grofers to deliver to customers in electric vehicles.