Rakesh Koneru, Founder, Electron EV, Energy News, ET EnergyWorld

New Delhi: Electron EV, based in Hyderabad, designs commercial electric vehicles for specific consumer needs. It works to develop a skateboard infrastructure that allows existing OEMs to scale quickly with higher profitability and low capital expenditure, founder Rakesh Koneru told ETEnergyworld in an interview. Edited excerpts…

What is the idea of ​​Electron EV and the vision that led to the creation of the company?

Electron EV was started by Vinay Jayachand and me. We’ve both been part of the US electric vehicle space for over 15 years. I have been part of the electrification industry in the United States since the early stages. I have experience in light, medium and heavy duty on-road and off-road applications. I was part of the team that deployed the very first electric trucks in the United States ten years ago with various companies, including the Department of Defense.

We were a solution provider, with the idea of ​​meeting different market specifications. Our experience in using our expertise in different vehicle applications has given us a lot of insight. Ten years ago, the technology was so nascent that many components were unavailable to the e-mobility space, especially in the case of high-voltage systems. There were only two ways to choose components – one was to choose industrial network components and make them work for the EV space and the other was to choose the most expensive components, usually used in aerospace and bringing them into the e-mobility space. Therefore, controlling the product design from the ground up, including the actual product supply chain, was the only way to be efficient, reliable and profitable.

Electron EV was primarily launched with the aim of providing mobility solutions through vertical integration in the light-to-medium and heavy-duty on-road and off-road segment. We started this business in California in 2018 and after much brainstorming, case studies and global market research, we decided to focus on the Indian and US markets as a first step. We registered the company in Hyderabad and started hiring a team here.

Where did Electron EV come in the process of bringing a product to market?

We have done some case studies for different market segments in USA and India. In India, the space between 6 tons and 15 tons is the biggest and in the United States there are different classes of vehicles: classes 4, 5 and 6. After choosing the vehicle classification, we went to work with a major dealer in India to acquire an Ashok Leyland bus. The same powertrain system can be applied to a wide tonnage of applications.

We are building a new design and assembly method for electric vehicles in India. The idea was to cover the space between the 7-12 ton platforms with the existing system we have. We are at a level where we have taken an OEM truck and fitted it with our powertrain system and vehicle software. The plan is to expand to repower to understand the market from a different consumer use case perspective. We want to be unique in this space.

We go by market segment and get to know their operational requirements, based on which we develop a system from the ground up, mainly software based. The long-term goal is to build an architecture on a skateboard platform that can be modular and scalable on the production line with software-driven systems. The only thing that will change is the size of the rear battery depending on the number of miles and the use case of that particular vehicle and that particular customer.

With the repower, we try to do the same thing. We are currently working with agriculture, ships and heavy industries. Repower will also help us set up pilot projects from different industries to collect as much data as possible and continuously improve our diagnostic tools.

What is Electron EV’s revenue model?

At present, we are still at the stage of our pilot project. We have a letter of intent (LOI) from an e-commerce platform. The thing is, we are working aggressively to go into production, so by the end of next year we are focusing on ARAI certifications and getting pilot productions of 102 vehicles by the end of 2023.

What are your current investment requirements?

We have set up a seed fund, mainly invested by the founders. We are currently focused on branding and scaling the team, setting up the infrastructure, and managing manufacturing at the pilot level. As a first step, we will be looking for contract manufacturers around our site to obtain the vehicles. We will mainly do vehicle commissioning, vehicle testing and vehicle software.

We call this activity a pre-series A, with the R&D phase of our skateboard architecture. In order to manage this without the capex to build the vehicles, as well as a fund on its own to maintain these activities, we envision an investment requirement of $8-8.5 million.

What does the future of Electron EV look like in terms of investment and manufacturing scale?

For the next 5 years, we have an aggressive investment plan to support our larger plans and a go-to-market strategy for the US, Indian, South Asian and Australian markets. The investment plan is set up in the direction of volumes, revenues, etc. At the manufacturing level, the objective is to use the fund of 8-8.5 million, to start the manufacturing process. We don’t want a mega-factory in a centralized location.

From a capex and geopolitical perspective and our USP to provide solutions based on market needs, it is important to be where the consumer is. We intend to grow with a micro-factory approach that will break down into 15-20 different clusters. We intend to put this in place where the customer is going to be. Each plant will produce 10 to 15,000 vehicles per year.

This gives us the flexibility to increase investment in local markets, reduce scrap, and reduce investment for each micro-factory, which is $40-50 million for us. Since it is also difficult to find a large pool of resources in one place, diversification will help us spread capital expenditures, tap into different talent pools, and benefit from the flexibility of distribution, sales and service departments. delivery.

What do you see as the main challenges for setting up electric vehicle manufacturing in India?

From a startup’s perspective, developing local technology requires an ecosystem that allows the company to grow to a point where it can meet initial government requirements and generate jobs. Apart from the lack of a proper supply chain and lack of raw materials, the ease of doing business needs to improve. For the service industry, the ecosystem is available, the infrastructure is in place to support but for the mobility space, there is no such thing.

There should be help in terms of taxation, fees, subsidies. Take any semiconductor, chips, hard electronics, controllers, motors, it’s very difficult for a startup to sustain those costs. We are basically trying to build the whole vehicle from the ground up with technology built in India for the local market. As it is still a relatively new industry, most people in the industry have experience in heavy industry or the service sector.

Electrification is a mixture of the two and more mainly, it is an industry that requires continuous improvement so that you can sustain it for longer with a greater purpose. It requires a different talent pool with different experience. Finding and retaining the right talent is a challenge.

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