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Why Building EVs In India Is An Uphill Ride. Ebike Startup Ather Energy Drives The Point Home

Why Building EVs In India Is An Uphill Ride. Ebike Startup Ather Energy Drives The Point Home

• Ather Energy recently launched its flagship electric scooter Ather 450 along with the Ather 340
• The company has invested more than $15.6 Mn only on testing and validation of its ebikes
• It has a new industrial design in the pipeline that might come about in two years
• India aims to go 30% EV by 2030; out of which 80% are expected to be two-wheelers

The future is electric vehicles (EV). It has to be, if we want to curb the non-stop assault of pollution on our cities, crumbling under the carbon footprint of burgeoning populations and their rising traditional internal combustion engine (ICE) vehicles.

At a time when countries like Norway plan to go all electric by 2025 and are already selling over 50% of their new cars as EVs, India — one of the largest automobile manufacturers in the world — has revised its ambitious plan to go fully electric by 2030 and downgraded it to a target of 30% EVs by 2030. At present, India’s EV industry just constitutes 0.1% of the global market share.

Besides, the Centre’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) scheme, which continues to be implemented on an adhoc basis, and hence doesn’t help automobile manufacturers in chalking out a long-term EV strategy. The scheme was instituted to encourage buyers to buy EVs.

Also, with government undertaking Energy Efficiency Services Ltd (EESL) scrapping its order for 10,000 electric cars as government officials refused to use EVs, it doesn’t quite seem like India will follow the Norwegian road.

But even as the Centre continues its flip-flop on its EV policy, the Indian EV industry is driving its own growth, thanks to increasing awareness among people at large, technology advancement in the automobile industry and, most importantly, Indian startuppers’ zest to develop new ecofriendly, cutting-edge technology products that are at par with international technology standards.

While big, desi players such as Tata, Mahindra, and Hero Electricals have already chalked out their EV strategies, a host of startups such as Ather Energy, Emflux One, Tork Motorcycles, Okinawa Autotech have developed brand new EVs.

One of the prominent startups in the Indian EV space, Ather Energy, launched its flagship electric scooter — Ather 450 — in Bengaluru on June 5. It also launched another ebike — Ather 340 — an updated version of its previously unveiled variant S340 (2016). However, Ather’s ebikes are yet to roll out on the roads.

Ather, which started taking pre-orders last month, says “the response has been great”. While Tarun Mehta, co-founder and CEO of Ather Energy, doesn’t reveal the exact booking number, he says, “We have already booked for the 2018 inventory and are now taking pre-orders for 2019.”

The company was scheduled to start its production from July 15 onwards.

It has also launched Ather Grid, public and private EV charging solutions to bridge the infrastructural gap. The startup is backed by Hero Motor Corp, Flipkart founders, and Tiger Global.

Inc42 caught up with Mehta to understand the journey of one of the first Indian startups in the EV space, its challenges and opportunities, the technology it has developed, and also why many Indian companies, despite having presented prototypes and concept designs successfully, shy away from launching EVs on a commercial scale.

Are Ather 340 and 450 Premium eBikes?

While some electric scooter, such as the ones from Okinawa and Hero Electricals, are available for $726-$871 (INR 50-60K), the Ather electric scooter — Ather 340 and Ather 450 — have been priced at at $1,635 (INR 1,09,750) and $1,859 (INR 1,24,750) respectively, inclusive of the FAME subsidy, GST, road tax, and other charges.

So, are Ather electric scooter premium? Mehta explains,

“Most reviewers have called this (Ather 450) one of the most premium and advanced ebikes in India. However, I don’t understand the definition of premium. I do understand that it’s more expensive than a typical scooter.” He adds this is because the ebike has many new features that two-wheelers don’t, from a dashboard to mobile application tracking.

He adds, “Look at the vehicle — it has a very understated design. The design aesthetics are not loud. I am not sure about ‘premium’ but, yes, we are leveraging a great user experience.” For instance, the seat quality has been kept high. Both the front and back brakes are disc brakes, which many have called a premium feature. It has GPS, a GSM card, a capacitive 7 in screen. The bike also comes with a completely waterproof battery pack, waterproof charger, and waterproof dashboard.

Whether or not Ather’s ebikes are tagged as premium, the fact of the matter is that EVs in India are not steeply priced. Yet, they have so far failed to deliver the basics. Since 2001, when India’s first EV — Reva — was unveiled, there have been numerous EV product launches across the country. But unlike China, EVs never came into the mainstream here, and still seem a long way off from it.

The Indian EV Evolution That Never Became A Revolution

The big question then is: Why is the Indian EV industry is so slow on the uptake? Why is there no EV revolution here?

Well, unlike software, which “slows faster than the hardware gets faster,” hardware development — as we’ve seen in the case Tesla (Nikola) innovations and Ipads that were conceptualised before the Iphone, yet launched much later — takes its own time to develop.

The journey of EVs in India kickstarted with the foundation of the Reva Electric Car Company (RECC) in 1994 by Chetan Maini. A joint venture between the Maini Group of Bengaluru and Amerigon Electric Vehicle Technologies (AEVT Inc.) of the US, RECC’s sole aim was to develop and produce an affordable compact electric car. The company rolled out its very first electric car — Reva — back in 2001.

Reva, India’s first homegrown EV, attracted global attention, and the company even managed to export the car to more than 26 countries including the UK. The RECC later got acquired by Mahindra, and seemed to have lost its steam over the years.

Since then, a number of companies have jumped into the segment and we now see electric buses, cars, ebikes, and even ebicycles rolling out on Indian roads.

However, unlike China, which sells over 870K EVs per year, India is producing hardly 22K EVs annually. In fact, the neighbouring country holds 50% of the world EV market.

Courtesy: Mckinsey

The EV evolution that started with Reva could never turn into a revolution largely due to India’s lag in infrastructure, policy, and technology development. Unlike Norway, Sweden, the US, and Europe, India doesn’t have proper EV policy. The government is still in the process of building the policy, which will take at least another couple of years, owing to the general election next year.

Speaking of the EV technology, market and policy, Amit Gupta, President & CEO – Group Automotive Business, Hero Motors stated, ‘’It’s no rocket science that electric vehicles are the future. Modern advances in electric technology are making electric powered vehicles closer to mainstream reality than they ever were. If the progress continues at the current pace, the conventional internal combustion engine powered vehicles may soon go extinct. In terms of the Indian society, a push for the adoption of electric vehicles is the need of the hour. We, at Hero are prepared for the future and are working along with our partner Hewland, UK on e-transmission from design to cost for OEMs in EU.’’

And, having a dedicated policy is essential for the Indian EV industry, especially considering the fact that current EV technology is costly and dependent on foreign players. Here, it is worth noting that Indian automobile players have to import lithium-ion, essential for battery packs from countries such as China, Australia, Chile, Argentina, and Bolivia. This adds to the cost of their vehicles. Unlike many other countries, India hasn’t yet invested in lithium-ion and cobalt mining assets in these resource-rich destinations.

Mehta nods, “I think an electric vehicle policy takes its own time to develop. However, the government has been mindful enough not to change the subsidy being extended to the EVs. But, the policy itself has a lot of other details beyond subsidy. I would have loved to have a policy in place six months back.”

Why Aren’t Big Players Taking The Lead In Making EVs?

Unlike Europe, the US, and China where big automobile players have taken the lead in the EV segment, in India, major players such as Suzuki, Bajaj, and Hyundai are yet to introduce EVs in the Indian market. While Mahindra & Mahindra (M&M) and Tata launched EV versions of their existing models of Verito and Tigor respectively, but they fell flat in the market.

This can be further understood by the fact that the country’s top EV maker, M&M, despite registering a four-fold growth in EV sales — it sold 4,000 EVs last year — posted a record loss of INR 1.29 Bn for its electric mobility business during FY18.

Mehta says, “This is what happens if there is no EV policy in place; existing companies are having a hard time investing in EV product development. They already have a profitable product (petrol vehicles). It is difficult for these companies to invest the profit from this product in something as uncertain as electric vehicles, as they’re unlikely to make any profit (from EVs).”

“However, for startups like us, our entire bet is that EVs are going to be mainstream in the next 5-10 yrs. It’s a bit easier for us to say ‘it’s fine’ even if the policy is due only in a year or two. I strongly believe startups can pursue this EV mission better,” he adds.

The Making Of The Ather eBike Ecosystem

But even among EV startups, Ather is a first among equals. What’s so different at Ather is that unlike other EV startups, they learnt from the mistakes of other players and, instead of building just EVs, the Ather team has developed an entire ecosystem. This comprises the infrastructure essential for EVs — battery packs, a battery management system (BMS), private and public charging platforms, and, most importantly, the Ather One ‘service on the go’. Ather One is an all-in-one servicing solution that covers the cost of fuel (the electricity bill), maintenance, consumables, labour charge, and roadside assistance — all for a reasonable INR 700 per month.

It was back in 2012 that Mehta and his batchmate from IIT Madras (2012), Swapnil Jain (now cofounder of Ather Energy), while pursuing M Tech in engineering design, came up with the idea of developing battery packs for scooters.

“However, we couldn’t figure out who would buy just the battery packs. So, we got excited about electric vehicles. Finally, in 2013, we decided to build a full vehicle. And, for the last five years, we have been building this product,” says Mehta.

After exploring and rejecting many ideas, it was only in late 2014 that they started working on the ebike models that are coming out now in the market. By January 2015, the duo had started working on the S340 ebike. Along the way, the S340 became Ather 340.

“The 340 also enabled the birth of a new product — the Ather 450. Things have changed quite a lot since we we started work on the first electric scooter. However, we haven’t deviated from the fundamental idea that we need to build an electric vehicle that should not be costlier or less in specs than its petrol counterparts. The idea has not been diluted; in fact, we’ve been able to improve the specs further,” says Mehta.

What Went Into The Design Thinking Of Ather Energy?

“Our aim was to develop the industrial design first. In fact, we fixed the design even before we started hiring anyone for the company — this was in May 2013 while we started the company in October that year. By that time, we already had the aesthetics and the look of the vehicle in place,” says Mehta.

He adds that finalising the design took several months. They came up with more than 20 sketches before freezing on one. This design too went through several dozen iterations before the S340 was rolled out.

“The design kept evolving with the development. If you compare the final design from the sketches from 2014, you’ll find huge differences. Even if I show you the prototypes from 2017, these were different from what we have finally locked in for production,” says Mehta.

For instance, in 2017, they had a trapezoid-shaped dashboard, while in 2018 they have modified it into a bigger, rectangular dashboard. So, things have changed even until three months ago from the launch.

Then came the next most important thing — the battery pack. Ather developed not only its own battery packs, but also a battery management system (BMS). The BMS is like the brain of the battery pack — it helps monitor all the cells, voltage, current, load, and temperature. It helps track the performance of the battery pack on a daily basis, and it has inbuilt algorithms that learn continuously about the usage and performance of its battery packs. The algorithms of the BMS can then be modified to improve battery life and efficiency.

While Mehta does not like Ather to be compared with Apple, which took decades to reach where it is, Ather, like Apple, preferred to develop its own software and the entire hardware. The goal was to ensure efficiency of its products and develop an ecosystem in the process.

Except for the DC brushless motors, lithium-ion cells, and a few other parts, everything is “made in India,” claims Mehta.

“We import the (lithium-ion) cells but, right from day one, we were very clear that we would design and develop our own battery packs which will address the minute aspects of the battery management system,” he adds.

The Big Challenge: Testing, Validation, And Bug Hunting

For a software product, it’s easy to roll out the beta version and troubleshoot issues later. However, for hardware, this is not the way it works. You have no choice but to get it right at the first go.

The hardest part for Ather Energy was testing and validation of its ebikes. In the case of software, you learn and fix it in real time, allowing for fast upgrades. However, for hardware, the design has to be fixed one year ahead of the launch. Once it’s frozen, that’s when you start testing. And, if the testing throws up bugs, you may have to push the timeline, says Mehta.

“If you have a small number of bugs — say 100-200 — they can be fixed, but with a product like this you can get up to 3,000-4,000 bugs, which then get spread across vendor partners. Now, imagine the scale of the spread of the bugs considering we have 70-100 such vendors. For each bug, we have to loop in our vendor partners and ask them to change their equipment, which means new procurement and sourcing timelines, and then comes manufacturing of new equipment, which might have its own issues,” explains Mehta.

So, the design thinking remains in a closed loop. “Fix the bugs, then start the testing. Because, until you fix the bugs, you can’t even start testing because something might fail.”

“One always gets suggestions (from team members) such as ‘let’s launch something and see the customer reactions’,” says Mehta. However, the Ather founders have been extremely careful about launching their products only when they’re absolutely market-ready. Ather even halted the commercial launch of the S340, which was later replaced by another improved model — Ather 340.

This cautious approach was triggered by Ather’s learnings from observing the mistakes of bigger peers. The Ather Energy team was well aware of the Tata Nano fiasco. Ratan Tata’s dream car — Nano — which witnessed a historic launch, soon fell apart owing to the news that some Nanos had caught fire.

“Hardly six of the 10,000 Nanos sold caught fire. But, the news spread like wildfire,” says Mehta.

“People must realise that bugs happen,” he adds, in the context of the Nano incident.

However, unlike corporates, startups are not used to handling bugs on a large scale. This has been the hardest realisation for Ather Energy.

“We have worked very hard to fix the bugs by bringing in more and more testing teams. We have spent around over $14.5 Mn (INR 100 Cr) on just testing and validation. The amount is very high. It actually rivals the amount we have spent on infrastructure, plant and other things,” says Mehta.

The IoT: Remote Diagnostics in Ather Energy Electric Scooter

Ather has also leveraged IoT to create its own remote diagnostics technology and software upgrade capabilities. Ather’s algorithms learn from one’s driving style and battery usage and make necessary amendments in the BMS to improve battery pack performance.

Ather Energy has also developed a couple of apps to strengthen the company’s offerings and overall EV ecosystem. While one of the apps — Ather Grid — is open to all EV users and shows the location and availability of Ather’s public charging points, the other app — Ather Energy — is strictly for its own customers. The Ather app has features such as push navigation from the phone to the vehicle dashboard, remote monitoring of the vehicle health, charge monitoring, and raising of service requests.

According to Mehta, the IoT enables room for a lot of fleet learning, “We get to understand the behaviour of our battery packs — whether they work well within this range or a slightly bigger range. We can then rework the battery charging algorithms and settings of the BMS to improve upon the efficiency and battery life.”

The software also offers users upgrades or different user profiles with different driving modes. For instance, compared to most bikes, Ather’s electric scooters accelerate fast, which many users may find difficulty adjusting to. The algorithms learning from users’ driving styles and prompt the app to suggest the driver to change the acceleration mode profile to fine tune their driving.

The IoT-based remote diagnostics technology offers other features as well. For instance, if the lights of the ebike stop working or battery efficiency goes down, the Ather app will tell the user that the vehicle needs servicing and the user can raise a service request accordingly.

On the possibility of selling its software piecemeal to other EV makers, “We are a revenue consumer brand. Our only focus is on building our own products,” says Mehta.

Ather’s eBike Charging Infrastructure

Focusing on the Bengaluru market first, Ather Energy has already set up charging stations at around 25-26 locations across Bengaluru.

The company has also launched private charging systems that will be provided for free to consumers buying the Ather 450.

The private charging system takes about 2.5 hours to charge 80% of the battery pack, translating into 60 km of travel. Ather Energy also offers fast-charging AtherGrid, which incorporates charging points installed at public locations such as cafes and restaurants, where 80% charging can be done in only one hour. So, if you charge for 10 minutes, you can drive 10 km, claims the company.

The AtherGrid app not only tells EV users about the location of charging points but also the availability.The Grid allows anyone to charge their EVs — non-Ather EV customers as well. Ather Energy customers can use their charging cable to plug into any 5A socket anywhere and charge their ebikes instantly. The company has a separate Ather customer app, which too enables users to locate public charging points.

By the end of this year, Ather Energy plans to install a charging point every 3km — 100-150 charging points at 50-60 locations — across Bengaluru. The target is to bring down this to 1-2 km, which would mean about 100 locations with 300 charging points across the city.

When Will EVs Move From Evolving To Becoming A Revolution In India?

While all automobile stakeholders — the government, manufacturers, vendors, and users — concur on the fact that EVs are future, looking at the current growth of the industry in India, it’s difficult to preempt the turning point when the ongoing EV evolution will turn into to the much-awaited revolution. For this to happen one precondition must be fulfilled — all the stakeholders need to come together to build the EV ecosystem.

Apart from the lack of policy and infrastructure, one of the biggest reasons the Indian EV industry is stuck in a rut is the lag in EV technology advancement in India. As mentioned earlier, the EESL, which had ordered 10K vehicles from Tata and Mahindra, has now scrapped the project. Government officials refused to use EVs as the first 500 EVs sourced under the plan — 350 from Tata and 150 from Mahindra — were not up to standard. EESL officials claimed that the vehicles couldn’t even run 80 Km on a full charge.

India, having no access to lithium-ion resources, continues to be dependent on other brine-rich countries for the metal’s import. Although Ather Energy has entirely designed and developed its own battery packs and BMS, it has no option but to import lithium-ion cells from abroad. The battery packs are the most important part of EVs which accounts for almost 50% of the cost of an EV.  While Gallium Nitride will fast replace silicon used in chips, which will help EV makers refine their electronic parts, there is still no foreseeable technology that could replace lithium-ion in battery packs.

ISRO’s latest lithium-ion technology could prove to be a game-changer for electric vehicles in India. India’s premier space organisation recently agreed to transfer its space-grade lithium-ion technology at a marginal cost of INR 1 Cr on a non-exclusive basis for use in automobiles to enable manufacturers make a paradigm shift towards electric mobility. As per the latest news, almost 130 EV companies already shown interest in the technology.

However, like all things governmental, the implementation of this plan might take its own sweet time.

Existing technology challenges apart, Ather Energy claims it’s building viable alternatives to petrol-fueled vehicles, in terms of cost, specs, performance, and maintenance. With a top speed of 80 km/hr, gradeability of 18°, and a torque of 20.5 Nm, its flagship electric scooter Ather 450 is capable of attaining 0-40 Km/hr in 3.9 seconds. The ebike scores over usual ebike limitations and problems such as slow charging speeds, low-powered motors, and short battery life.

The company claims that the battery can fast charge to 80% at the rate of 1 km/minute. It comes with a 3.3kW BLDC (brushless DC) motor that can comfortably ride up 18° slopes, making steep parking lots, flyovers, and roads an easy climb. And, for the first time in the category, Ather 450 comes with parking assist, which allows riders to reverse into tight spots.

What’s Down The Road For Ather Energy?

The launch of Ather 450 and 340 done, the company is for now focusing on building EV infrastructure further. It has fixed its immediate priority as setting up a charging point every 1-2 km in Bengaluru along with further expansion to Chennai, Hyderabad, Pune, Delhi, and Mumbai markets.

However, a startup isn’t a startup if it sits still. The passion for building newer, bigger, better EVs remains intact in Ather’s genes and the team is already on track to develop the architecture for a new ebike. But we will have to wait for about two years for another ebike from the company.

But Ather’s larger aim is to play a leading role in India’s EV industry, especially given the Centre’s plan to go 30% electric by 2030. And, why not? “The 30% electric by 2030 plan includes 80% two-wheelers. The proposition is 80% ebikes, 10% three-wheelers, and some 5-10% cars. And I believe it is achievable,” concludes Mehta.